Shares of Bank of Nova Scotia (TSX: BNS), or Scotiabank, jumped 5% in early trading on Tuesday after its latest earnings report came out, and investors had plenty to like in the numbers. The bank delivered a record quarter, with stronger results across all major business lines, improving margins, and return on equity moving above its medium-term target.
While BNS stock has already enjoyed a solid run over the last year, this broad-based strength across the business in the latest quarter gives those gains stronger earnings support.
In this article, I’ll break down Scotiabank’s third-quarter results and what they mean for investors.
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Why Scotiabank stock jumped after its third-quarter earnings release
As one of Canada’s largest banks, Scotiabank’s operations include Canadian banking, international banking, and global wealth management. After the recent rally, BNS stock now trades close to $126 per share, giving the bank a market cap of over $148 billion. Notably, it also offers an annualized dividend yield of roughly 3.7%.
Despite some recent market volatility, the stock jumped more than 50% in the last year, making it one of the top-performing bank stocks on the TSX.
The recent strength in BNS stock could be easily understood when you see how many parts of the bank are continuing to contribute to growth.
In the third quarter of its fiscal year 2026 (ended in July), Scotiabank’s revenue climbed 11.1% year-over-year (YoY) to $10.5 billion. Its adjusted net profit reached nearly $3 billion, up about 18% YoY and 12.5% from the second quarter. The bank’s adjusted diluted earnings rose 21% YoY in the latest quarter to $2.28 per share.
More importantly, Scotiabank’s profitability is continuing to move in the right direction. In the third quarter, its adjusted return on equity improved to 14.2% from 12.4% a year earlier, pushing it above the bank’s 14% medium-term target.
Similarly, its Canadian banking division’s earnings rose 12% YoY to about $1.1 billion, supported by record revenue, a fifth consecutive quarter of margin expansion, and strong fee income growth. Meanwhile, the bank’s global wealth management delivered a record quarter, with earnings climbing 23% from a year ago with the help of higher mutual fund fees, brokerage revenue, and net interest income.
What investors should watch now?
These strong earnings clearly make BNS stock more appealing, but investors should still watch Scotiabank’s credit trends before investing.
In the latest quarter, the bank’s provision for credit losses climbed to about $1.1 billion from roughly $1 billion a year ago. Still, that figure improved sequentially by $138 million from the second quarter.
Interestingly, Scotiabank returned $6.3 billion to shareholders through dividends and share buybacks in the first nine months of its fiscal 2026.
Overall, Scotiabank’s stronger profitability, broad earnings growth, improving margins, and continued capital returns make BNS stock attractive after this third-quarter report. Although the shares have already enjoyed a strong rally lately, these latest results give investors solid reasons to believe the bank’s earnings momentum still has support behind it.
