Canadian bank stocks have been a reliable anchor for long-term investors through recessions, interest rate swings, and global economic uncertainty. What makes them unique is the balance of reliable dividends and steady growth, creating a sense of security even in unpredictable economic times.
When you think about 2040, holding the right stocks in this sector could mean the difference between ordinary results and extraordinary wealth. In this article, I’ll spotlight two such Canadian banks that have all the right ingredients for long-term investors.
Scotiabank stock
Bank of Nova Scotia (TSX:BNS), or Scotiabank, could be a solid stock for long-term investors because of its great mix of Canadian stability and international expansion. Besides being one of Canada’s largest financial institutions, it also has a footprint across Latin America and the Caribbean.
After surging by 22% over the last year, BNS stock currently trades at $78.71 per share with a market cap of about $97.9 billion. And for income-focused investors, its annualized dividend yield of 5.6% is one of the most attractive among major banks.
In the quarter ended in April 2025, Scotiabank’s adjusted earnings fell 3.8% YoY (year over year) to $1.52 per share. The decline was linked to higher provisions for credit losses, especially in Canadian retail and commercial loans, as the bank braced for economic uncertainty. Nevertheless, the bank’s international banking segment delivered a 7% increase in earnings with the help of stronger portfolios and lower provisions abroad, while wealth management earnings jumped 17% YoY, driven by higher mutual fund and brokerage revenues.
Beyond current earnings, Scotiabank’s long-term appeal comes from its international diversification, especially in Latin America, where it continues to expand wealth and retail services. That mix of stable Canadian banking and high-growth international markets positions BNS as a top bank stock that could significantly boost your portfolio by 2040.
TD Bank stock
Another major banking sector player you can consider for the long term is Toronto-Dominion Bank (TSX:TD). It has a solid retail presence in both Canada and the United States.
After rallying by 26% over the last year, TD stock currently trades at $102.24 per share with a market cap of about $175.4 billion. Investors also benefit from a stable dividend yield of 4.1%, backed by decades of uninterrupted payouts.
TD reported just over a 1% YoY increase in its April quarter revenue to nearly $14 billion, but its adjusted earnings fell 3.4% to $1.97 per share due to higher expenses and credit provisions. On the brighter side, its Canadian personal and commercial banking continued to be a core profit driver, while its U.S. retail operations provide growth beyond domestic markets.
Even with the earnings dip in the latest quarter, TD stock continues to show resilience with strong capital ratios and healthy profitability. Moreover, its focus on expanding in the U.S., where it operates one of the largest retail banks, gives it an edge for growth that few Canadian peers can match. Combined with its track record of shareholder rewards, TD has the potential to help transform your portfolio all the way to 2040.
