Three years can feel like forever in bank-stock land. One quarter, investors worry about credit losses. The next, they get excited about rate cuts, dividends, buybacks, and earnings growth. Then someone says “recession,” and everyone acts like the couch is on fire.
So where could Bank of Nova Scotia (TSX:BNS) stock be by 2029? After all, so much has gone on both globally and for the stock, three years could seem short for most, but extra long for an investor.
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What happened
First, let’s start with the economy through a bit of a look back in time. Bank stocks move with confidence, credit, and interest rates. When Canadians borrow, spend, invest, and pay their loans on time, banks tend to do well. When unemployment rises or borrowers fall behind, banks set aside more money for bad loans, and profits can take a hit.
The Bank of Canada held its policy rate at 2.25% in June 2026, while noting weak economic activity, elevated trade uncertainty, and unemployment fluctuating around the 6.5% to 7% range. It also said growth should resume in the second quarter, though the economy was expected to remain in excess supply.
That middle period can create opportunity. If rates stabilize, credit losses peak, and the economy avoids a hard landing, investors may start rewarding banks that have already absorbed the bad news. Enter BNS.
Why it works
BNS is one of Canada’s Big Six banks, with operations across Canadian banking, international banking, wealth management, and global banking and markets. It also owns exposure to faster-growing markets outside Canada, which gives it more upside than some domestic peers, but also more moving parts.
The three-year case rests on execution. BNS wants to simplify parts of its international business, strengthen its North American footprint, and improve returns. The stock spent years carrying a bit of a “prove it” discount. Investors liked the dividend, but they wanted cleaner growth.
The latest earnings gave them something better to chew on. In the second quarter of 2026, BNS reported adjusted diluted earnings per share (EPS) of $2.02, up from $1.52 a year earlier. Adjusted return on equity (ROE) climbed to 13.2%, compared with 10.4% last year. That is the number investors should watch. ROE shows how effectively the bank turns shareholder capital into profits. If BNS stock can push that figure higher over the next few years, the stock should have room to re-rate.
The bank also reported a CET1 capital ratio of 13.3% at the end of the quarter, giving it a strong capital cushion. Scotiabank raised its quarterly dividend to $1.14 per share, continuing a dividend record that stretches back to 1833 and now yielding 3.7%. Payments have been made continuously since then, which is delightfully old-timey and still useful today.
Looking ahead
So where could BNS stock be in three years?
My view: higher, but not in a straight line. If earnings keep improving, credit losses ease, and management delivers better returns, BNS stock could shift from a “cheap dividend bank” into a stronger total-return story. The dividend should do a lot of the heavy lifting, with capital gains added if the market gains more confidence in the turnaround.
The valuation still looks reasonable for long-term investors trading at just 16.6 times earnings on a trailing basis. The risk is credit. If unemployment rises, housing stress worsens, or international markets stumble, BNS stock may need to keep provisions elevated. That would slow earnings growth and make a higher stock price harder to justify.
Bottom line
Still, three years gives a bank time to prove itself. BNS stock does not need perfection. It needs steady earnings growth, cleaner execution, and a little less investor skepticism. If those pieces fall into place, BNS stock could look much stronger by 2029, with shareholders paid along the way for sticking around.
