Bank of Nova Scotia Q2 Earnings Fall on Higher Provisions & Expenses

The Bank of Nova Scotia's BNS second-quarter fiscal 2025 (ended April 30) adjusted net income was C$2.07 billion ($1.5 billion), which declined 1.6% year over year.

A rise in expenses and provisions for credit losses hurt the results. Lower loan balances also acted as a dampener. Nevertheless, results benefited from higher revenues and solid capital ratios.

After considering non-recurring items, net income was C$2.03 billion ($1.48 billion), down 2.9% from the prior-year quarter.

BNS’ Q2 Revenues Rise, Expenses Increase

Total revenues were C$9.08 billion ($6.59 billion), up 8.8% year over year.

Net interest income was C$5.27 billion ($3.83 billion), which increased 12.3%. Likewise, non-interest income grew 4.3% to C$3.81 billion ($2.77 billion).

Non-interest expenses were C$5.11 billion ($3.71 billion), up 8.5% on a year-over-year basis.

Provision for credit losses jumped 38.8% to C$1.4 billion ($1.02 billion). The rise reflects a deteriorating economic outlook.

BNS’ Balance Sheet Worsens

As of April 30, 2025, Bank of Nova Scotia’s total assets were C$1.42 trillion ($1.03 trillion), down 1.6% on a sequential basis. Deposits were C$945.8 billion ($686.9 billion), which declined 2.1% from the previous quarter.

Net loans were C$756.4 billion ($549.4 billion), down 1.3%.

Capital Ratios Solid, Profitability Ratios Decline

As of April 30, 2025, the Common Equity Tier 1 ratio was 13.2, which was stable with the prior-year quarter. Further, the total capital ratio was 17.1, which was stable with the prior-year figure.

Adjusted return on equity was 10.4%, down from 11.3% in the year-earlier quarter.

Our Take on BNS

A diversified product mix and strong capital position are expected to continue supporting Bank of Nova Scotia. However, concerns related to macroeconomic conditions and rising expenses make us apprehensive.

Bank of Nova Scotia (The) Price, Consensus and EPS Surprise

Bank of Nova Scotia (The) price-consensus-eps-surprise-chart | Bank of Nova Scotia (The) Quote

BNS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Earnings Release Schedule of Other Canadian Banks

Toronto-Dominion Bank TD reported second-quarter fiscal 2025 (ended April 30) adjusted net income of C$3.6 billion ($2.63 billion), which declined 4.3% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

TD’s results were affected by higher provisions for credit losses and expenses. Also, lower loan balances were another negative. Nonetheless, growth in NII and non-interest income was positive.

Royal Bank of Canada’s RY second-quarter fiscal 2025 (ended April 30) numbers are scheduled to be announced on May 29.

Over the past seven days, the Zacks Consensus Estimate for RY’s quarterly earnings has been revised marginally downward to $2.25 per share.

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