Bank of Nova Scotia BNS

Scotiabank's International Banking Return Profile Has Improved in the Past Two Years

Bank of Nova Scotia is the third-largest Canada-based bank by assets. It is Canada’s most international bank, as it derives a little over half of its revenue from Canada, over 40% from international operations (primarily Latin America), and a high-single-digit percentage from the US. Scotiabank’s Latin America exposure gives the bank the potential for higher growth and return opportunities compared with peers, but it also exposes the bank to more risks, as we saw during the pandemic. The bank has been reworking its Latin America footprint, reducing exposure that is less favorable and also aiming to achieve larger scale in some countries. We would like to see Scotiabank reach better risk-adjusted margins in these markets as credit costs often weigh on the bank’s total returns. International loan growth was still lackluster in the first half of 2026, but segment return on equity has improved by 240 basis points compared with two years ago.