Canada’s big banks don’t usually surprise. They are known for being steady, safe, and solid, especially in uncertain times. But Scotiabank (TSX:BNS) has become one to watch. With a new strategy in place and major changes underway, investors are starting to wonder: Where will Scotiabank be in three years?
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Recent performance
Let’s start with what’s happening right now. Scotiabank recently released its second-quarter earnings for 2025, and there were some mixed results. The bank reported revenue of $8.4 billion, just shy of expectations. Earnings per share (EPS) came in at $1.52, below the expected $1.56. A key reason for the miss was its loan loss provisions, which rose to $1.4 billion, up from $1 billion last year. Rising provisions often mean the bank expects some economic bumps ahead.
Its Canadian banking segment struggled. Net income there dropped 31% year over year, affected by slower lending, higher funding costs, and a more cautious consumer. There’s also been pressure from U.S. tariffs, which continue to affect Canadian businesses and their borrowing habits. All of this made for a tough quarter at home.
What to watch
But not all areas were weak. Its international business actually did better than expected, with adjusted earnings up 6%. Scotiabank has a large presence in Latin America, especially Mexico, Peru, Chile, and Colombia, and these markets helped offset weakness in Canada. On top of that, its global banking and markets division, which includes trading and investment banking, posted a 10% gain. That part of the business has been quietly gaining strength as volatility creates trading opportunities.
Now let’s talk about the future. In 2023, Scott Thomson became Scotiabank’s new CEO, and he’s wasted no time making bold changes. One of his first major moves was to cut exposure to smaller international markets. The bank sold operations in Colombia, Panama, and Costa Rica. This wasn’t just about trimming fat, it was a signal. Thomson wants Scotiabank to focus on what it calls the “North American corridor,” meaning banking and trade opportunities across Canada, the United States, and Mexico.
Eyeing 2028
So, where could Scotiabank be in 2028? If the strategy works, Scotiabank could become a more focused, more profitable institution. By narrowing its scope, the bank might reduce the drag from underperforming markets and free up capital for higher-growth opportunities. The North American trade corridor offers a lot of potential, especially as supply chains shift and businesses look for more regional partnerships.
There’s also its dividend to consider. Right now, Scotiabank offers a dividend yield of about 6%, making it one of the higher-yielding banks in Canada. In its most recent update, the dividend rose to $0.7996 per share. Even through difficult quarters, the bank has kept its dividend intact. For income investors, this is a strong signal of reliability. If the share price rises over the next few years while the dividend remains strong, total returns could be compelling.
Bottom line
In three years, Scotiabank could look very different. A leaner structure, more focused growth, and a continued commitment to dividends could make it a standout. But it’s not guaranteed. Execution will matter, and investors will need to stay patient. Still, for those looking for value, income, and a bit of turnaround potential, Scotiabank might be worth a second look.
