Scotiabank Expects One-Off Hit to Earnings From Chile Tax Change

By Robb M. Stewart

Bank of Nova Scotia expects a slight hit to its earnings in the latest quarter from a change in Chile's corporate income tax rate, but a modest rise in the contribution is coming its way from its ownership stake in KeyCorp.

The Canadian lender said Wednesday that the Chilean government's approval of a reduction in the corporate income tax rate by 4% over the next three years to 23% will result in a one-time deferred tax asset write-down. That is forecast to reduce the bank and its international segment's fourth-quarter earnings and adjusted earnings by about 55 million Canadian dollars (US$39.1 million).

Scotiabank, one of the largest banks in North America by assets, said it expects its stake in KeyCorp will net an income contribution of about C$96 million for the three months through October. That compares with about C$82 million the quarter before.

Adjusting for the amortization of acquired intangible assets of roughly C$8 million, the bank's adjusted net income contribution from KeyCorp is expected to be about C$104 million.

Scotiabank in late 2024 finalized a US$2.8 billion investment in KeyCorp that gave it an almost 15% stake in the U.S. regional lender. At the end of July, the carrying value of that interest in KeyCorp was valued at almost C$4.4 billion.

The bank in the fiscal third quarter recorded net income of C$2.95 billion, up from C$2.53 billion a year earlier, as each of its business lines reported strong results. Its international banking arm generated earnings of C$766 million, up 8% year-over-year, driven by margin expansion and improved credit quality.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 21, 2026 08:47 ET (12:47 GMT)