Canada’s big six banks begin earnings season with two beating year-ago earnings by wide margins, with wealth management emerging as a common thread
Two of Canada's largest banks have reported second-quarter earnings that substantially exceeded year-ago levels, with both Scotiabank and BMO Financial Group pointing to wealth management and fee-based businesses as key drivers of growth.
Scotiabank's Global Wealth Management division posted a 19% earnings gain as assets under management swelled to $450 billion. The division generated net income of $476 million in the three months ended April 30, up from $399 million a year earlier, fueled by stronger mutual fund fees, brokerage commissions and net interest income across its Canadian wealth operations. AUM grew 18% year-over-year.
At BMO, the wealth story was equally compelling. The bank's Wealth Management segment earned $428 million, a 34% jump from the prior year, with adjusted net income reaching $444 million — up 39%. The gains reflected stronger global markets, net new sales, higher net interest income, and the inclusion of Burgundy Asset Management, which BMO acquired last year.
Capital markets businesses were strong contributors at both institutions. Scotiabank's Global Banking and Markets segment added $457 million, up 11%, while BMO's Capital Markets division posted earnings of $638 million (a 47% surge from a year ago) reflecting stronger performance in global markets and investment banking.
Scotiabank
Scotiabank's overall earnings were equally robust. The Toronto-based bank reported net income of $2.63 billion for the quarter, up sharply from $2.03 billion in Q2 2025. Diluted earnings per share came in at $2.00, compared with $1.48 twelve months prior. Adjusted diluted EPS reached $2.02, against $1.52 a year earlier.
"The Bank delivered another strong quarter as we continue to execute on our strategy, with strong revenue growth coupled with expanding margins and another quarter of positive operating leverage," said Scott Thomson, President and CEO of Scotiabank. "The Bank remains on track to achieve its financial objectives for fiscal 2026 and its 14%+ ROE objective in fiscal 2027. Our focus on evolving our business mix drove strong fee income and wealth management revenues, along with sequential Canadian commercial and small business loan growth."
Total revenue at Scotiabank for the quarter reached $9.84 billion, up from $9.08 billion a year ago, as non-interest income climbed to $4.32 billion from $3.81 billion. BMO reported total revenue of $9.57 billion, compared with $8.68 billion in Q2 2025.
Canadian Banking was Scotiabank's biggest earnings contributor at $935 million, more than 50% higher than the $613 million generated in Q2 2025. The domestic unit benefited from double-digit pre-tax, pre-provision earnings growth and a meaningful reduction in performing loan provisions, alongside deposit growth and positive operating leverage. BMO's Canadian personal and commercial segment earned $884 million, up 15% year-over-year, driven by a 5% rise in revenue and a lower provision for credit losses.
International Banking contributed $736 million for Scotiabank, a modest 3% gain year-over-year, with management crediting margin expansion and expense discipline. Return on equity in that segment held steady at 16%.
Adjusted return on equity at Scotiabank improved to 13.2% from 10.4% a year earlier. BMO's adjusted ROE came in at 13.5%, up from 9.8% in Q2 2025 — with both banks on trajectory toward or above the 14% threshold that has become something of a benchmark in Canadian banking.
Scotiabank's provisions for credit losses totaled $1.22 billion, down from $1.40 billion in Q2 2025, with the bank noting that prior-year levels were inflated by a large reserve build tied to tariff-related uncertainty.
BMO
BMO's headline numbers were similarly impressive. The bank reported net income of $2.63 billion for the quarter ended April 30, a 34% increase from $1.96 billion in the same period last year. Diluted EPS jumped 41% to $3.53. On an adjusted basis, BMO earned $2.73 billion, with EPS of $3.67.
BMO's U.S. Banking segment earned $790 million, up 32% from the prior year in Canadian dollar terms. In U.S. dollar terms, adjusted net income was $616 million, reflecting a 30% improvement driven by stronger revenue and lower credit loss provisions, with expenses largely flat.
BMO's credit loss provisions fell to $739 million from $1.05 billion in the prior year with performing loan provisions collapsing to just $5 million from $289 million, as macroeconomic fears eased.
BMO also announced it had struck a deal to sell its Transportation Finance and Vendor Finance businesses to alternative asset manager Stonepeak, retaining an approximate 19.9% equity stake in the new entity. The transaction, expected to close in the bank's fourth fiscal quarter, will trigger a charge of approximately $1.1 billion pre-tax — treated as an adjusting item — primarily related to goodwill.
“We once again strengthened ROE and delivered strong EPS growth, driven by robust fee revenue across Capital Markets, Wealth Management and Treasury and Payments,” said Darryl White, CEO of BMO Financial Group. “We delivered solid sequential commercial banking loan growth in both Canada and the United States, reflecting improving client activity and the strength of our bankers. These outcomes are driven by our focus on deepening client relationships, innovating to drive business value, and optimizing performance.”
White also flagged BMO's newly established BMO Institute for Applied Artificial Intelligence & Quantum, which he described as dedicated to the responsible application and governance of AI at scale, designed to support clients as they integrate the technology into their businesses.
