The Bank of Nova Scotia’s chief risk offer says it’s a mixed picture for consumer health in Canada, with younger clientele experiencing the brunt of the financial strain but “green shoots” emerging elsewhere.
“If you look at where we see some, from a demographic perspective, pockets of weakness, it’s really that 18-to-26-year-old population,” Phil Thomas told analysts on a conference call Tuesday to discuss the bank’s third-quarter results.
Looking at credit card data, discretionary spending has begun to improve for the first time since U.S. President Donald Trump announced an onslaught of tariffs against trading partners around the world this spring, Thomas added
“And so there’s some green shoots coming, but we’re still really cautiously optimistic about the outlook.”
Earlier Tuesday, Scotiabank reported a third-quarter profit of $2.53 billion, up from $1.91 billion a year earlier, for the three months ended July 31.
That amounted to $1.84 per diluted share, up from $1.41 per share in the prior-year quarter. On an adjusted basis, Scotiabank earned $1.88 per diluted share in its latest quarter compared with $1.63 a year earlier. That beat the average analyst estimate of $1.73 per share, according to LSEG Data & Analytics.
Revenue totalled $9.49 billion, up from $8.36 billion in the same 2024 period.
Scotiabank’s provision for credit losses for the quarter amounted to $1.04 billion, down from $1.05 billion a year earlier.
“We were really encouraged by how the impaired PCL showed up this quarter, but I think it’s too early to tell if the trends are sustainable,” Thomas said.
“There’s obviously a lot going on in the Canadian economy, particularly. We still have trade uncertainty that’s hitting us. The Canadian consumer is still showing some signs of stress.”
Scotiabank said its Canadian banking business earned net income attributable to equity holders of $958 million compared with $977 million a year ago as it saw higher non-interest expenses and provision for credit losses, partly offset by higher revenues.
The bank’s international banking earned net income attributable to equity holders of $670 million, up from $629 million a year earlier.
Scotiabank’s global wealth management business earned $417 million in net income attributable to equity holders, up from $367 million in the same quarter last year, while its global banking and markets business earned $473 million in net income attributable to equity holders, up from $368 million a year ago.
Thomas said the broader economic trends are encouraging.
“However, I don’t think the worst is necessarily past us and I think we still need to be very thoughtful about the macroeconomic dynamic,” he said.
“We’re still waiting for a Canada-U.S. trade agreement and so this uncertainty is still clouding some of the outlook.”
