Q4 2025 The Bank of Nova Scotia Earnings Call

Operator: Ladies and gentlemen, this conference is being recorded.

Operator: Ladies and gentlemen, this conference is being recorded.

Speaker #2: Good morning and welcome to Scotiabank's Q4 results presentation. My name is Meny Grauman, and I'm head of Investor Relations. Presenting to you this morning are Scott Thomson, Scotiabank's President and Chief Executive Officer; Rajagopal Viswanathan, our Chief Financial Officer; and Phil Thomas, our Chief Risk Officer.

Scott Thomson: Good morning and welcome to Scotiabank's Q4 results presentation.

Meny Grauman: Good morning and welcome to Scotiabank's Q4 results presentation.

Raj Viswanathan: My name is Meny Grauman and I'm.

My name is Meny Grauman and I'm Head of Investor Relations. Presenting to you this morning are Scott Thomson, Scotiabank's President and Chief Executive Officer, Raj Viswanathan, our Chief Financial Officer, and Phil Thomas, our Chief Risk Officer. Following our comments, we'll be glad to take your questions. Also present to take questions are the following Scotiabank executives, Aris Bogdaneris from Canadian Banking, Jacqui Allard from Global Wealth Management.

Scott Thomson: Head of Investor Relations. Presenting to you this morning are Scott Thomson, Scotiabank's President and Chief Executive Officer, Raj Viswanathan, our Chief Financial Officer, and Phil Thomas, our Chief Risk Officer. Following our comments, we'll be glad to take your questions. Also present to take questions are the following Scotiabank executives, Aris Bogdaneris from Canadian.

Speaker #2: Following our comments, we'll be glad to take your questions. Also present to take questions are the following Scotiabank executives: Aeris Bogdanaris from Canadian Banking; Jackie Allard from Global Wealth Management; Francisco Aristegüieta from International Banking; and Travis Matchin from Global Banking and Markets.

Raj Viswanathan: Banking, Jacqui Allard from Global Wealth Management.

Scott Thomson: Francisco Aristeguieta from International Banking and Travis Machen from Global Banking and Markets. Before we start and on behalf of.

Francisco Aristeguieta from International Banking and Travis Machen from Global Banking and Markets. Before we start and on behalf of those speaking today, I will refer you.

Speaker #2: Before we start, and on behalf of those speaking today, I refer you to slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements.

Raj Viswanathan: Those speaking today, I will refer you.

Scott Thomson: To slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements. All the remarks today will be on an adjusted basis. With that, I will now turn the.

To slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements. All the remarks today will be on an adjusted basis. With that, I will now turn the call over to Scott.

Speaker #2: All the remarks today will be on an adjusted basis. With that, I will now turn the call over to Scott.

Raj Viswanathan: Call over to Scott.

Scott Thomson: Thank you, Manny, and good morning, everyone. Our Q4 results cap off a year of strong and consistent financial performance, and we've entered into fiscal 2026 from a position of strength. 2025 was a year of execution. We did what we said we were going to do. Despite the emergence of unexpected trade-related economic challenges, we accomplished this by focusing on what we can control and delivering our strategic plan. Overall, EPS grew by 10% for the full year. We also ended Q4 with an ROE of 12.5%, up 190 basis points year over year, and an efficiency ratio of 54.3%, an improvement of 180 basis points versus the prior period. These results demonstrate clear and measurable progress against our medium-term financial targets. Recapping our strategic objectives, our focus on client primacy is yielding results as we drive strong cooperation across the bank.

Scott Thomson: Thank you, Meny, and good morning, everyone. Our Q4 results cap off a year of strong and consistent financial performance, and we've entered into fiscal 2026 from a position of strength. 2025 was a year of execution. We did what we said we were going to do. Despite the emergence of unexpected trade-related economic challenges, we accomplished this by focusing on what we can control and delivering our strategic plan. Overall, EPS grew by 10% for the full year. We also ended Q4 with an ROE of 12.5%, up 190 basis points year-over-year, and an efficiency ratio of 54.3%, an improvement of 180 basis points vs the prior period. These results demonstrate clear and measurable progress against our medium-term financial targets. Recapping our strategic objectives, our focus on client primacy is yielding results as we drive strong cooperation across the bank.

Speaker #3: Everyone, our Q4 results cap off a year of strong and consistent financial performance, and we've entered into fiscal 2026 from a position of strength. Thank you, Meny, and good morning.

Speaker #3: 2025 was a year of execution. We did what we said we were going to do, despite the emergence of unexpected trade-related economic challenges. We accomplished this by focusing on what we can control and delivering our strategic plan.

Speaker #3: Overall, EPS grew by 10% for the full year. We also ended Q4 with an ROE of 12.5%, up 190 basis points year over year, and an efficiency ratio of 54.3%, points versus the prior an improvement of 180 basis demonstrate clear and measurable progress against our medium-term financial period.

Speaker #3: targets. Recapping our strategic objectives, our focus on client primacy is yielding results as we drive strong cooperation across the bank. Closed referrals between Canadian retail, commercial, and wealth were $15 billion for the year, up 18% over last year.

Scott Thomson: Closed referrals between Canadian retail, commercial, and wealth were CAD 15 billion for the year, up 18% over last year. Our emphasis on deposit gathering is also paying off as we increased our mix of PNC deposits for the second year in a row. We've added 400,000 primary clients since we launched our new strategy. I am confident we will continue to accelerate client acquisition as we enhance our client experience and build out our data and personalization capabilities. We also remain disciplined in our approach to reallocating capital to key growth areas, continue to strengthen our balance sheet, and maintain a strong capital position. We reduced our wholesale funding ratio by 60 basis points this past year over year, while our loan-to-deposit ratio closed the year at 104% on capital.

Closed referrals between Canadian retail, commercial, and wealth were CAD 15 billion for the year, up 18% over last year. Our emphasis on deposit gathering is also paying off as we increased our mix of PNC deposits for the second year in a row. We've added 400,000 primary clients since we launched our new strategy. I am confident we will continue to accelerate client acquisition as we enhance our client experience and build out our data and personalization capabilities. We also remain disciplined in our approach to reallocating capital to key growth areas, continue to strengthen our balance sheet, and maintain a strong capital position. We reduced our wholesale funding ratio by 60 basis points this past year-over-year, while our loan-to-deposit ratio closed the year at 104% on capital.

Speaker #3: On deposit gathering, we are also paying these results, and our emphasis has shifted as we increased our mix of P&C deposits for the second year in a row.

Speaker #3: We've clients since we launched our new strategy, and added 400,000 primary I am confident we will continue to accelerate client acquisition as we enhance our client experience and build out our data and personalization capabilities.

Speaker #3: We also remain disciplined in our approach to areas and continue to strengthen our balance sheet and maintain a strong capital position, reallocating capital to key growth opportunities.

Speaker #3: We reduced our wholesale funding ratio by 60 basis points this past year, while our loan-to-deposit ratio closed the year at 104%. On capital, we ended the year with a ratio of 13.2% after repurchasing 10.8 million shares in fiscal 2025.

Scott Thomson: We ended the year with a CET1 ratio of 13.2% after repurchasing 10.8 million shares in fiscal 2025. Turning to our Q4 results, we delivered earnings of $2.6 billion, or $1.93 per share, up 23% year over year. Our quarterly results exclude a restructuring charge, with the majority related to actions taken to simplify our Canadian operations. While these types of decisions are always difficult, they are nevertheless necessary as we work to boost the value of the Canadian bank. The actions simplify and streamline our organizational setup, which will free up capacity to further invest in technology and revenue-generating sales staff to propel future revenue growth. We do not anticipate additional charges, but will remain focused on running our bank as efficiently as possible, including taking full advantage of emerging technologies.

We ended the year with a CET1 ratio of 13.2% after repurchasing 10.8 million shares in fiscal 2025. Turning to our Q4 results, we delivered earnings of CAD 2.6 billion, or CAD 1.93 per share, up 23% year-over-year. Our quarterly results exclude a restructuring charge, with the majority related to actions taken to simplify our Canadian operations. While these types of decisions are always difficult, they are nevertheless necessary as we work to boost the value of the Canadian Bank. The actions simplify and streamline our organizational setup, which will free up capacity to further invest in technology and revenue-generating sales staff to propel future revenue growth. We do not anticipate additional charges, but will remain focused on running our bank as efficiently as possible, including taking full advantage of emerging technologies.

Speaker #3: Turning to our Q4 results, we delivered earnings of 2.6 billion, or $1.93 per share, up 23% year over year. Our quarterly results exclude a restructuring charge with the majority related to actions taken to simplify our Canadian operations.

Speaker #3: While these types of decisions are always difficult, they are nevertheless necessary as we work to boost the value of the Canadian bank. The actions simplify and streamline our capacity to further invest in technology and organizational setup, which will free up revenue-generating sales staff to propel future revenue growth.

Speaker #3: We do not anticipate additional charges, but will remain focused on running our bank as efficiently as possible, including taking full advantage of emerging technologies.

Speaker #3: Our technology spend in 2026 will be concentrated in the following key areas: further building out our global transaction banking platform, enhancing our technology platforms including AI investments, balancing security and client experience with monitoring, and adding new product capabilities with a continued focus on fraud and transaction capabilities to drive client primacy.

Scott Thomson: Our technology spend in 2026 will be concentrated in the following: further building out our Global Transaction Banking platform, enhancing our technology platforms including AI investments, balancing security and client experience with a continued focus on fraud and transaction monitoring, and adding new product capabilities to drive client primacy. Moving to our operating segments, fiscal 2025 stands as a pivotal year for our Canadian banking unit as we laid the groundwork to drive stronger earnings growth in the years ahead. We did this by improving client primacy through growth in core deposits and increased in-branch sales of mutual funds, improving our channel mix with a focus on increasing our sales capacity, and improving efficiency. Performance in Canada has improved sequentially over the past two quarters, setting this business up for strong earnings growth in 2026.

Our technology spend in 2026 will be concentrated in the following: further building out our Global Transaction Banking platform, enhancing our technology platforms including AI investments, balancing security and client experience with a continued focus on fraud and transaction monitoring, and adding new product capabilities to drive client primacy. Moving to our operating segments, fiscal 2025 stands as a pivotal year for our Canadian Banking unit as we laid the groundwork to drive stronger earnings growth in the years ahead. We did this by improving client primacy through growth in core deposits and increased in-branch sales of mutual funds, improving our channel mix with a focus on increasing our sales capacity, and improving efficiency. Performance in Canada has improved sequentially over the past two quarters, setting this business up for strong earnings growth in 2026.

Speaker #3: Moving to our operating segments, fiscal 2025 stands as a pivotal year for our Canadian banking unit, as we laid the groundwork to drive stronger earnings growth in the years ahead.

Speaker #3: We did this by improving client primacy through growth in core deposits and increased in-branch sales of mutual funds. We focused on improving our channel mix by increasing our sales capacity and enhancing efficiency.

Speaker #3: Performance in Canada has improved sequentially over the past two quarters, setting this business up for strong earnings growth in 2026. Our mortgage-plus program remains a key contributor to the growth we are seeing in multi-product banking, all mortgage originations, including a product bundle, helping drive both deposits and card growth.

Scott Thomson: Our Mortgage+ program remains a key contributor to the growth we are seeing in multi-product banking relationships, with over 90% of all mortgage originations including a product bundle, helping drive both deposits and cards growth. We are capturing an increasing share of money in motion, especially in the retail bank, where day-to-day and savings deposits rose by 6% year over year, and closed referrals between retail banking and wealth management came in at CAD 8.1 billion, or up 20% from fiscal 2024. In commercial banking, full-year pre-tax pre-provision earnings were up 21% even as average loan balances declined by 1%, evidence that our focus on value over volume is delivering tangible results.

Our Mortgage+ Program remains a key contributor to the growth we are seeing in multi-product banking relationships, with over 90% of all mortgage originations including a product bundle, helping drive both deposits and cards growth. We are capturing an increasing share of money in motion, especially in the retail bank, where day-to-day and savings deposits rose by 6% year-over-year, and closed referrals between retail banking and wealth management came in at CAD 8.1 billion, or up 20% from fiscal 2024. In Commercial Banking, full-year pre-tax pre-provision earnings were up 21% even as average loan balances declined by 1%, evidence that our focus on value over volume is delivering tangible results.

Speaker #3: We are capturing and increasing share of money in relationships, with over 90% of motion, especially in retail banking, where day-to-day and savings deposits rose by 6% year over year. Closed referrals between retail banking and wealth management came in at $8.1 billion, or up 20% from fiscal 2024.

Speaker #3: In commercial banking, full-year pre-tax pre-provision earnings were up 21%, even as average loan balances declined by 1%. This evidence shows that our focus on value over volume is delivering tangible results.

Speaker #3: Our commercial bank is an important and growing source of referrals for our global wealth management unit, with closed referrals up 35% this year. It is also a growing source of revenue for our global banking and markets unit, especially in the FX business.

Scott Thomson: Our commercial bank is an important and growing source of referrals with our Global Wealth Management unit, with closed referrals up 35% this year and a growing source of revenue for our Global Banking and Markets unit, especially in the FX business. Global Wealth Management continued its positive momentum with record earnings across Global Asset Management, Canadian Wealth Management, Private Banking, and ScotiaMcLeod. Rising markets are helping drive assets under management higher, and we are also seeing strong underlying performance as full year net sales improved by CAD 11.5 billion versus fiscal 2024. In Canadian Wealth Management, we are seeing strong momentum in our differentiated private bank offering, including double-digit loan and deposit growth.

Our Commercial Bank is an important and growing source of referrals with our Global Wealth Management unit, with closed referrals up 35% this year and a growing source of revenue for our Global Banking and Markets unit, especially in the FX business. Global Wealth Management continued its positive momentum with record earnings across Global Asset Management, Canadian Wealth Management, Private Banking, and ScotiaMcLeod. Rising markets are helping drive assets under management higher, and we are also seeing strong underlying performance as full year net sales improved by CAD 11.5 billion vs fiscal 2024. In Canadian Wealth Management, we are seeing strong momentum in our differentiated Private Bank Offering, including double-digit loan and deposit growth.

Speaker #3: Global wealth management continued its positive momentum with record earnings Canadian wealth management, private banking, and Scotia McCloud. Rising markets are helping drive assets under management higher, and we are also across global asset management, seeing strong underlying performance as full-year net sales improved by 11.5 billion versus fiscal 2024.

Speaker #3: Management, we are seeing strong momentum in Canadian wealth. Our differentiated private bank offering includes double-digit loan and deposit growth. At the same time, we onboarded 5,000 households to our recently launched signature bank offering, and our full-service Scotia McLeod brokerage unit saw double-digit growth in fee-based assets, helped by net sales of approximately $6 billion in fiscal 2025.

Scott Thomson: At the same time, we onboarded 5,000 households to our recently launched Scotia Signature offering, and our full-service ScotiaMcLeod Brokerage Unit saw double-digit growth in fee-based assets, helped by net sales of approximately CAD 6 billion in fiscal 2025. In our global asset management business, retail net sales improved by almost CAD 7 billion in fiscal 2025, led by our own branch channel, and this past year we launched four new private asset funds delivering compelling private asset solutions tailored for our wealth and institutional investors. We continue to see strong growth within the liquid alternatives asset class and remain a market leader in this space, and in our international wealth business, earnings are up 14% for the year with 20% growth in Mexico.

Scott Thomson: At the same time, we onboarded 5,000 households to our recently launched Signature Bank Offering, and our full-service ScotiaMcLeod Brokerage Unit saw double-digit growth in fee-based assets, helped by net sales of approximately CAD 6 billion in fiscal 2025. In our Global Asset Management business, retail net sales improved by almost CAD 7 billion in fiscal 2025, led by our own branch channel, and this past year we launched four new private asset funds delivering compelling private asset solutions tailored for our wealth and institutional investors. We continue to see strong growth within the liquid alternatives asset class and remain a market leader in this space, and in our International Wealth business, earnings are up 14% for the year with 20% growth in Mexico.

Speaker #3: In our global asset management business, retail net sales improved by almost $7 billion in fiscal channel. This past year, 2025, led by our own branch, we launched four new private asset funds, delivering compelling value for our wealth and institutional investors.

Speaker #3: We continue to see asset solutions tailored for strong growth within the liquid alternatives asset class and remain a market leader in this space. In our international wealth business, earnings are up 14% for the year, with 20% growth in Mexico.

Speaker #3: We also delivered continued progress results in fiscal 2025 coming in our international banking segment with in ahead of what we committed to in our investor day.

Scott Thomson: We also delivered continued progress in our International Banking segment with results in fiscal 2025 coming in ahead of what we committed to at our investor day. This happened in what is still a challenging economic environment, as we demonstrated the benefits of our geographic diversification and executed to our plan. Performance in our International Banking segment continues to be driven by solid execution, including strong expense management and improved profitability metrics as we shift our business mix to deeper and more profitable client relationships. We recently launched our singular retail brand and value proposition across Mexico, Peru, and Chile, which highlights the work we are doing around both regionalization and client segmentation. For the year, expenses were flat, and ROE came in at almost 15%, up 110 basis points versus the prior year. We look to maximize shareholder value across all the markets we operate in.

We also delivered continued progress in our International Banking segment with results in fiscal 2025 coming in ahead of what we committed to at our Investor Day. This happened in what is still a challenging economic environment, as we demonstrated the benefits of our geographic diversification and executed to our plan. Performance in our International Banking segment continues to be driven by solid execution, including strong expense management and improved profitability metrics as we shift our business mix to deeper and more profitable client relationships. We recently launched our singular retail brand and value proposition across Mexico, Peru, and Chile, which highlights the work we are doing around both regionalization and client segmentation. For the year, expenses were flat, and ROE came in at almost 15%, up 110 basis points vs the prior year. We look to maximize shareholder value across all the markets we operate in.

Speaker #3: This happened in what is still a challenging economic environment as we demonstrated the benefits of our geographic diversification and executed to our plan. Performance in our international banking segment continues to be driven by solid execution, including strong expense management and improved profitability metrics as we shift our business mix relationships.

Speaker #3: We recently launched our singular retail brand and value proposition across Mexico, Peru, and Chile, which highlights the work we are doing around both deeper and more profitable client regionalization and client segmentation.

Speaker #3: For the year, expenses were flat, and ROE came in at almost 15%, up 110 basis points versus the prior year. We look to maximize shareholder value across all the markets in which we operate.

Scott Thomson: The Davivienda transaction that closed yesterday is a prime example of that. This deal creates additional scale in Colombia and is immediately accretive, with further upside from the benefits of scale and diversification, as well as from future collaboration. Finally, Global Banking and Markets delivered another strong quarter as we continue to benefit from constructive markets, but also from our organic investments in new capabilities, particularly in the US. Our prime services business, where we believe we have a competitive advantage relative to our Canadian bank peers, is a growing contributor to GBM's earnings, and we will continue to build on our relationships with top-tier US managers. Fiscal 2025 was the best year for underwriting advisory fees in our history, rising 35%.

The Davivienda transaction that closed yesterday is a prime example of that. This deal creates additional scale in Colombia and is immediately accretive, with further upside from the benefits of scale and diversification, as well as from future collaboration. Finally, Global Banking and Markets delivered another strong quarter as we continue to benefit from constructive markets, but also from our organic investments in new capabilities, particularly in the US. Our prime services business, where we believe we have a competitive advantage relative to our Canadian Bank peers, is a growing contributor to GBM's earnings, and we will continue to build on our relationships with top-tier US managers. Fiscal 2025 was the best year for underwriting advisory fees in our history, rising 35%.

Speaker #3: The debt by the end of the transaction that closed yesterday is a prime example of that. This deal creates additional scale in Colombia and is immediately accretive, with further upside from the benefits of scale and diversification, as well as from future collaboration.

Speaker #3: Finally, global banking and markets delivered another strong quarter as we continue to benefit from constructive markets, but also from our organic investments in new capabilities, particularly in the US.

Speaker #3: Our prime services advantage relative to our Canadian bank peers is a growing contributor to GBM's earnings, and we will continue to build on our relationships with top-tier U.S. managers where we believe we have a competitive advantage.

Speaker #3: Fiscal 2025 was advisory fees in our history, rising 35%. the best year for underwriting and execute in 2026, and the federal government's Grow Canada initiative with a focus on energy and mining is well-suited to our core The US contributed 50% of GBM earnings in fiscal capabilities.

Scott Thomson: Looking ahead, we have a strong pipeline to execute in 2026, and the federal government's Grow Canada initiative with a focus on energy and mining is well suited to our core capabilities. The US contributed 50% of GBM earnings in fiscal 2025, and we will continue to invest in our US capabilities in fiscal to increase this contribution over time. Part of that investment is going to the build out of our US cash management business. After a successful pilot, we officially launched this fall across all business lines. We increased the number of enterprise-wide cash management clients by 15,000 in fiscal 2025, exceeding our own internal targets. Success here will help us grow primary client relationships, further reduce our reliance on wholesale funding, and drive fee income.

Looking ahead, we have a strong pipeline to execute in 2026, and the federal government's Grow Canada initiative with a focus on energy and mining is well suited to our core capabilities. The US contributed 50% of GBM earnings in fiscal 2025, and we will continue to invest in our US capabilities in fiscal to increase this contribution over time. Part of that investment is going to the build out of our US cash management business. After a successful pilot, we officially launched this fall across all business lines. We increased the number of enterprise-wide cash management clients by 15,000 in fiscal 2025, exceeding our own internal targets. Success here will help us grow primary client relationships, further reduce our reliance on wholesale funding, and drive fee income.

Speaker #3: Our U.S. capabilities in fiscal 2026 will increase this contribution over 2025, and we will continue to invest in time. Part of that investment is going to the build-out of our U.S. cash management business.

Speaker #3: Successful pilot, we officially launched this fall. Across all business lines, we increased the number of enterprise-wide cash management clients by 15,000 in fiscal 2025, exceeding our own internal targets.

Speaker #3: Success here will help us grow primary client relationships, further reduce our reliance on wholesale funding, and drive the income. Our focus on accelerating the velocity of our balance sheet and growing fee income is delivering results.

Scott Thomson: Our focus on accelerating the velocity of our balance sheet and growing fee income is delivering results for the year as a whole. GBM loan balances were down 13%, but earnings in this division were up 30%, and ROE increased by 320 basis points. Looking ahead to our strategic priorities for fiscal 2026, we will continue to improve our business mix as we further deepen our client relationships. In Canada, mortgage growth is outpacing growth in commercial loans and cards, nevertheless we are making progress in deepening client relationships thanks to our success in growing core deposits and investments. Looking ahead, we aim to accelerate card growth by further tapping into our Scene+ loyalty program and building on the momentum of our Mortgage+ proposition.

Our focus on accelerating the velocity of our balance sheet and growing fee income is delivering results for the year as a whole. GBM loan balances were down 13%, but earnings in this division were up 30%, and ROE increased by 320 basis points. Looking ahead to our strategic priorities for fiscal 2026, we will continue to improve our business mix as we further deepen our client relationships. In Canada, mortgage growth is outpacing growth in commercial loans and cards, nevertheless we are making progress in deepening client relationships thanks to our success in growing core deposits and investments. Looking ahead, we aim to accelerate card growth by further tapping into our Scene+ Loyalty Program and building on the momentum of our Mortgage+ proposition.

Speaker #3: For the year as a whole, GBM loan balances were down 13%, but earnings in this division were up 30%, and ROE increased by 320 basis strategic priorities for fiscal 2026, we will continue points.

Speaker #3: Further deepen our client relationships. In Canada, mortgage growth is outpacing growth in commercial. Looking ahead to our making progress in deepening client relationships, thanks to our success in growing core deposits and investments.

Speaker #3: Looking ahead, we aim to grow loans and cards. Nevertheless, we are accelerating card growth by further tapping into our C+ loyalty program and building on the momentum of our Mortgage Plus proposition.

Speaker #3: And in commercial, the pipeline is growing as we target markets and regions that we've historically been less focused on, which should gradually improve loan growth in 2026.

Scott Thomson: In commercial, the pipeline is growing as we target markets and regions that we've historically been less focused on, which should gradually improve loan growth. In 2026, we will continue to build on the strengths of our business lines. In Canadian banking and international banking, this means building a more efficient, digitally forward bank that seamlessly integrates our branch network with mobile customer service capabilities, meeting our clients where it is most convenient for them. In global wealth management, we will continue to build on our strong sales momentum, as well as grow the number of relationship managers in both our private bank and ScotiaMcLeod. In global banking and markets, we will focus on accelerating our balance sheet velocity as we further optimize our use of capital.

In commercial, the pipeline is growing as we target markets and regions that we've historically been less focused on, which should gradually improve loan growth. In 2026, we will continue to build on the strengths of our business lines. In Canadian Banking and International Banking, this means building a more efficient, digitally forward bank that seamlessly integrates our branch network with mobile customer service capabilities, meeting our clients where it is most convenient for them. In Global Wealth Management, we will continue to build on our strong sales momentum, as well as grow the number of relationship managers in both our Private Bank and ScotiaMcLeod. In Global Banking and Markets, we will focus on accelerating our balance sheet velocity as we further optimize our use of capital.

Speaker #3: We will continue to build on the strengths of our business lines. In Canadian banking and international, an efficient, digitally forward bank that seamlessly integrates our branch network with mobile customer service capabilities means building a more effective approach, meeting our clients where it is most convenient for them.

Speaker #3: In global wealth management, we will continue to build on our strong sales momentum as well as grow the number of relationship managers in both our Private Bank and Scotia McCloud.

Speaker #3: And in global banking and markets, we will focus on accelerating our balance sheet velocity as we further optimize our use of capital. In the U.S., this includes pursuing a thoughtful organic growth strategy by expanding our product offering while avoiding areas where we do not have scale to compete.

Scott Thomson: In the US, this includes pursuing a thoughtful organic growth strategy by expanding our product offering while avoiding areas where we do not have scale to compete. Finally, we are focused on further improving connectivity across the North American corridor. We are pursuing deeper connectivity as we continue to build out our Global Transaction Banking business and optimize the value of our international footprint. In closing, we feel good about our earnings momentum heading into 2026, and the ability to continue to execute on our strategic priorities and deliver our medium-term financial objectives, including achieving an ROE of 14% plus. Improved revenue growth, coupled with positive operating leverage, should help us deliver double-digit annual EPS growth in fiscal 2026, despite what remains an uncertain operating environment.

In the US, this includes pursuing a thoughtful organic growth strategy by expanding our product offering while avoiding areas where we do not have scale to compete. Finally, we are focused on further improving connectivity across the North American corridor. We are pursuing deeper connectivity as we continue to build out our Global Transaction Banking business and optimize the value of our international footprint. In closing, we feel good about our earnings momentum heading into 2026, and the ability to continue to execute on our strategic priorities and deliver our medium-term financial objectives, including achieving an ROE of 14%+. Improved revenue growth, coupled with positive operating leverage, should help us deliver double-digit annual EPS growth in fiscal 2026, despite what remains an uncertain operating environment.

Speaker #3: Finally, we are focused on further improving connectivity across the North American corridor. We are pursuing deeper connectivity as we continue to build out our global transaction banking business and optimize the value of our international earnings momentum heading into footprint.

Speaker #3: 2026 and the ability to continue to and deliver our medium-term financial objectives, including achieving an ROE of 14% plus. In closing, we feel good about our Improved revenue growth coupled with execute on our strategic priorities positive operating leverage should help us deliver double-digit annual EPS growth in fiscal 2026, despite what remains an uncertain operating environment.

Raj Viswanathan: Canada's.

Canada's renewed focus on natural resource development will drive higher GDP growth and improve national prosperity. In the medium term, the recent Memorandum of Understanding on Energy between the Canadian Federal Government and the Province of Alberta is a very significant development in our view, and proof that Canada truly is on a new economic trajectory. This renewed focus also plays into our bank's strengths as a trusted provider of capital and advice to key sectors such as mining, energy, and critical infrastructure. We are well positioned to contribute to the ambitious plans of the Major Projects Office by helping our clients drive forward large-scale infrastructure projects. This includes pipelines that will enable Canadian oil and gas producers to access global markets, strengthen export opportunities, and support Canada's energy competitiveness. We will continue to advocate for those measures that will unlock greater economic prosperity within our markets.

Speaker #3: Canada's renewed drive for higher GDP growth and focus on natural resource development will improve national prosperity over the medium term. The recent memorandum of understanding on energy between the Canadian federal government and the province of Alberta is a very significant development in our view and proof that Canada truly is on a new economic trajectory.

Scott Thomson: Renewed focus on natural resource development will drive higher GDP growth and improve national prosperity. In the medium term, the recent Memorandum of Understanding on Energy between the Canadian Federal Government and the Province of Alberta is a very significant development in our view, and proof that Canada truly is on a new economic trajectory. This renewed focus also plays into our bank's strengths as a trusted provider of capital and advice to key sectors such as mining, energy, and critical infrastructure. We are well positioned to contribute to the ambitious plans of the Major Projects Office by helping our clients drive forward large-scale infrastructure projects. This includes pipelines that will enable Canadian oil and gas producers to access global markets, strengthen export opportunities, and support Canada's energy competitiveness. We will continue to advocate for those measures that will unlock greater economic prosperity within our markets.

Speaker #3: This renewed focus also plays into our bank's strengths as a trusted provider of capital and advice to key sectors such as infrastructure. We are well-positioned to contribute to the ambitious plans of the major projects office by helping our clients drive forward large-scale infrastructure projects.

Speaker #3: This includes pipelines that will enable Canadian oil and gas producers to access global markets, strengthen export opportunities, and support Canada's energy competitiveness. We will continue to advocate for those measures that will unlock greater economic prosperity within our markets.

Speaker #3: Our results this year have truly been an enterprise-wide team effort, and I would like to thank our entire Scotiabank team for their many contributions in 2025.

Scott Thomson: Our results this year have truly been an enterprise-wide team effort, and I would like to thank our entire Scotiabank team for their many contributions in 2025. Two years into our strategic journey, we head into 2026 with momentum and excitement about all that we will accomplish in the year ahead. I will now turn it to Raj for a more detailed financial review.

Our results this year have truly been an enterprise-wide team effort, and I would like to thank our entire Scotiabank team for their many contributions in 2025. Two years into our strategic journey, we head into 2026 with momentum and excitement about all that we will accomplish in the year ahead. I will now turn it to Raj for a more detailed financial review.

Speaker #3: We head into 2026, two years into our strategic journey, with momentum and excitement for all that we will accomplish in the year ahead.

Speaker #3: I will now turn it over to Raj for a more detailed financial overview.

Speaker #3: review. Thank

Raj Viswanathan: Thank you, Scott, and good morning, everyone. This quarter's net income was impacted by $299 million of adjusting items after tax and non-controlling interest, or $0.28 of earnings per share, and approximately 7 basis points on the Common Equity Tier 1 ratio. The adjusting items include a $268 million after-tax charge to simplify the Canadian Banking organization, right-size Global Banking and Markets operations in Asia, regionalized activities in International Banking in line with the bank strategy, legal provisions of $54 million, a $43 million credit related to the Colombia and Central America transaction, and our usual amortization of acquisition-related intangibles. All my comments that follow will be on an adjusted basis and on a constant dollar basis for the International Bank.

Raj Viswanathan: Thank you, Scott, and good morning, everyone. This quarter's net income was impacted by CAD 299 million of adjusting items after tax and non-controlling interest, or CAD 0.28 of earnings per share, and approximately 7 basis points on the Common Equity Tier 1 ratio. The adjusting items include a CAD 268 million after-tax charge to simplify the Canadian Banking organization, right-size Global Banking and Markets operations in Asia, regionalized activities in International Banking in line with the bank strategy, legal provisions of CAD 54 million, a CAD 43 million credit related to the Colombia and Central America transaction, and our usual amortization of acquisition-related intangibles. All my comments that follow will be on an adjusted basis and on a constant dollar basis for the International Bank.

Speaker #2: You, Scott, and good morning, everyone. This quarter's net income was impacted by $299 million of adjusting items after tax and non-controlling interest, or $0.28 of earnings per basis point on the common equity share, and approximately a 7% tier-one ratio.

Speaker #2: The adjusting items include a 268 million after-tax charge to simplify the Canadian banking organization right-sized global banking and market operations in Asia, and regionalized activities in international banking.

Speaker #2: In line with the bank strategy, legal provisions of $54 million, the Columbia and Central America transaction, and our usual amortization of acquisition-related intangibles. All my comments that follow will be on an adjusted basis and on a constant dollar basis for the international bank.

Speaker #2: Starting a 43 million dollar credit related to on slide seven for a review of the fiscal 2025 results, the bank ended the year with adjusted diluted earnings per share of 7 dollars and 9 cents, up 10% compared to the prior year, and a return on equity of 11.8%, top 50 basis points, and a return on tangible common equity of 14.3% that was points.

Raj Viswanathan: Starting on slide 7 for a review of the fiscal 2025 results, the bank ended the year with adjusted diluted earnings per share of $7.09, up 10% compared to the prior year, and a return on equity of 11.8%, up 50 basis points, and a return on tangible common equity of 14.3% that was up 60 basis points. Revenue was up 12% year over year, while expenses grew 9%, resulting in positive operating leverage of 3% for the year. The provision for credit losses were $4.7 billion, driven mainly by higher performing PCLs. Canadian banking earnings were $3.4 billion, down 9%, impacted by higher PCLs of approximately $600 million and lower margins due to rate cuts. Revenue grew 3%, driven by solid asset and deposit growth, while expenses were up 5%.

Starting on slide seven for a review of the fiscal 2025 results, the bank ended the year with adjusted diluted earnings per share of CAD 7.09, up 10% compared to the prior year, and a return on equity of 11.8%, up 50 basis points, and a return on tangible common equity of 14.3% that was up 60 basis points. Revenue was up 12% year-over-year, while expenses grew 9%, resulting in positive operating leverage of 3% for the year. The provision for credit losses were CAD 4.7 billion, driven mainly by higher performing PCLs. Canadian Banking earnings were CAD 3.4 billion, down 9%, impacted by higher PCLs of approximately CAD 600 million and lower margins due to rate cuts. Revenue grew 3%, driven by solid asset and deposit growth, while expenses were up 5%.

Speaker #2: Revenue was up 12% year over year, while expenses grew 9%, resulting in positive operating leverage of 3% for the year. The provision for credit losses was mainly driven by higher performing $4.7 billion PCLs.

Speaker #2: Canadian banking earnings were 3.4 billion dollars, down 9%, impacted by higher PCLs of approximately 600 million margins due to rate cuts. Revenue grew dollars, and lower 3%, driven by solid asset and deposit growth, while expenses were up 5%.

Speaker #2: Global wealth management earnings of $1.7 billion were up 17% year over year, benefiting from strong AUM growth of 16%. Revenues were up 15%, driven by higher fee revenue and net interest income across the Canadian and international businesses.

Raj Viswanathan: Global Wealth Management earnings of CAD 1.7 billion were up 17% year over year, benefiting from strong AUM growth of 16%. Revenues were up 15%, driven by higher fee revenue and net interest income across the Canadian and international businesses. Global Banking and Markets reported earnings of CAD 1.9 billion, up 30%, driven by higher trading-related revenues, fees and commissions, underwriting and advisory revenues, and higher net interest income. International Banking earnings were CAD 2.7 billion, up 1% year over year. Revenues were up 2%, while expenses were up 1% year over year, resulting in positive operating leverage.

Global Wealth Management earnings of CAD 1.7 billion were up 17% year-over-year, benefiting from strong AUM growth of 16%. Revenues were up 15%, driven by higher fee revenue and net interest income across the Canadian and international businesses. Global Banking and Markets reported earnings of CAD 1.9 billion, up 30%, driven by higher trading-related revenues, fees and commissions, underwriting and advisory revenues, and higher net interest income. International Banking earnings were CAD 2.7 billion, up 1% year-over-year. Revenues were up 2%, while expenses were up 1% year-over-year, resulting in positive operating leverage.

Speaker #2: Global banking and markets reported earnings of 1.9 billion, up 30%, driven by higher trading-related revenues, fees, and commissions, underwriting and advisory revenues, and higher net interest income.

Speaker #2: International banking earnings were $2.7 billion, up 1% year over year. Revenues were up 2%, while expenses were up 1% year over year, resulting in positive operating leverage.

Speaker #2: The other segment reported a loss of $347 million compared to a loss of $815 million in 2024, benefiting from significantly lower funding costs.

Raj Viswanathan: The other segment reported a loss of CAD 347 million compared to a loss of CAD 815 million in 2024, benefiting from significantly lower funding costs as disclosed on slide 25. Excluding the foregone income from the sale of Colombia, Central America, and CrediScotia in Peru, 2025 adjusted earnings were CAD 9.3 billion, up 9% year over year. Now, a few comments on the outlook for 2026. Our outlook commentary normalizes fiscal 2025 to exclude the contribution of the now divested operations. The bank expects to generate strong earnings growth in 2026, underpinned by growth in both net interest income and non-interest revenue. The earnings are also expected to benefit from lower provision for credit losses, mainly performing, partially offset by a higher tax rate that is expected to be around 25%. Net interest income is expected to grow from both loan and deposit growth and benefit from margin expansion.

The other segment reported a loss of CAD 347 million compared to a loss of CAD 815 million in 2024, benefiting from significantly lower funding costs as disclosed on slide 25. Excluding the foregone income from the sale of Colombia, Central America, and CrediScotia in Peru, 2025 adjusted earnings were CAD 9.3 billion, up 9% year-over-year. Now, a few comments on the outlook for 2026. Our outlook commentary normalizes fiscal 2025 to exclude the contribution of the now divested operations. The bank expects to generate strong earnings growth in 2026, underpinned by growth in both net interest income and non-interest revenue. The earnings are also expected to benefit from lower provision for credit losses, mainly performing, partially offset by a higher tax rate that is expected to be around 25%. Net interest income is expected to grow from both loan and deposit growth and benefit from margin expansion.

Speaker #2: As disclosed on slide 25, excluding the foregone income from the and Credit Scotia in Peru, 2025 adjusted earnings were 9.3 billion dollars, up 9% year over year.

Speaker #2: Now, a few comments on the outlook for sale of Columbia, Central America, 2026. Our outlook commentary normalizes fiscal 2025 to exclude the contribution of the now divested operations.

Speaker #2: The bank expects to generate strong earnings growth in 2026, underpinned by growth, in both net interest income and are also expected to benefit from lower mainly performing, provision from credit losses, partially offset by a higher tax rate that is expected to be around 25%.

Speaker #2: Net interest income is expected to grow from both loan and deposit growth and benefit from margin expansion. Non-interest revenue is segments. Expenses are expected to grow from increased technology spend to strengthen and strategically grow the bank.

Raj Viswanathan: Non-interest revenue is expected to grow across all business segments. Expenses are expected to grow from increased technology spend to strengthen and strategically grow the bank. The bank is expected to generate positive operating leverage in 2026. From a business line perspective, Canadian Banking is expected to generate double-digit earnings growth, driven by good revenue growth and moderating loan losses. The business will continue to maintain strong expense discipline, with a focus on generating positive full-year operating leverage. International Banking earnings are expected to be modestly higher, adjusting for the impact of divestitures. Good growth in pre-tax pre-provision earnings is expected to be offset by slightly elevated loan loss provisions and a higher tax rate. Global Wealth Management is expected to generate strong earnings growth in 2026. Global Banking and Markets earnings are expected to grow modestly after a very strong fiscal 2025.

Non-interest revenue is expected to grow across all business segments. Expenses are expected to grow from increased technology spend to strengthen and strategically grow the bank. The bank is expected to generate positive operating leverage in 2026. From a business line perspective, Canadian Banking is expected to generate double-digit earnings growth, driven by good revenue growth and moderating loan losses. The business will continue to maintain strong expense discipline, with a focus on generating positive full-year operating leverage. International Banking earnings are expected to be modestly higher, adjusting for the impact of divestitures. Good growth in pre-tax pre-provision earnings is expected to be offset by slightly elevated loan loss provisions and a higher tax rate. Global Wealth Management is expected to generate strong earnings growth in 2026. Global Banking and Markets earnings are expected to grow modestly after a very strong fiscal 2025.

Speaker #2: The business bank is expected to generate positive operating leverage in 2026. From a business line perspective, Canadian banking is expected to generate double-digit earnings growth, driven by good revenue growth and moderating loan maintain strong expense discipline with a focus on generating positive full-year operating leverage.

Speaker #2: International banking earnings are expected to be modestly higher, adjusting for the impact of divestitures. Good growth in pre-tax, pre-provision earnings is expected to be offset by slightly elevated loan loss provisions and a higher tax rate.

Speaker #2: Global wealth management is expected to generate strong earnings growth in 2026. Global banking and markets earnings are expected to grow modestly after a very strong fiscal 2025.

Speaker #2: Moving to slide eight for a review of the fourth quarter earnings of 2.6 billion results, the bank reported quarterly dollars, which is up 21%, and diluted earnings per share of 1 dollar and 93 cents, an increase of 36 cents compared to last year.

Raj Viswanathan: Moving to slide 8 for a review of the fourth quarter results. The bank reported quarterly earnings of CAD 2.6 billion, which is up 21%, and diluted earnings per share of $1.93, an increase of $0.36 compared to last year. Return on equity was 12.5%, up 190 basis points year over year, driven by strong pre-tax pre-provision growth of 19%. Net interest income grew 13% year over year from higher net interest margin and loan growth. The all-bank NIM expanded significantly, up 25 basis points year over year, mainly from lower funding costs quarter over quarter. NIM expanded four basis points from business line margin expansion. Non-interest income was CAD 4.2 billion, up 16% year over year from higher wealth management and underwriting, advisory fees, and the contribution from KeyCorp.

Moving to slide eight for a review of the Q4 results. The bank reported quarterly earnings of CAD 2.6 billion, which is up 21%, and diluted earnings per share of CAD 1.93, an increase of CAD 0.36 compared to last year. Return on equity was 12.5%, up 190 basis points year-over-year, driven by strong pre-tax pre-provision growth of 19%. Net interest income grew 13% year-over-year from higher net interest margin and loan growth. The all-bank NIM expanded significantly, up 25 basis points year-over-year, mainly from lower funding costs quarter-over-quarter. NIM expanded four basis points from business line margin expansion. Non-interest income was CAD 4.2 billion, up 16% year-over-year from higher wealth management and underwriting, advisory fees, and the contribution from KeyCorp.

Speaker #2: 12.5%, up 190 basis points. Return on equity was year over year, driven by strong pre-tax pre-provision growth of 19%. Net interest income grew 13% year over year, from higher net interest margin and loan growth.

Speaker #2: The all-bank NIM expanded significantly, up 25 basis points year over year, mainly from lower funding costs. Quarter over quarter, NIM expanded 4 basis points from business line margin expansion. Non-interest income was $4.2 billion, up 16% year over year, from higher wealth management and underwriting and advisory fees, and the contribution from the Key Corp investment.

Raj Viswanathan: Investment expenses grew 11% year over year and 4% quarter over quarter, driven by higher personnel costs, including performance-based compensation and technology costs. The PCLs were approximately $1.1 billion, mostly impaired, and the PCL ratio was 58 basis points. The bank's effective tax rate increased to 23.6% from 21.8% last year, due primarily to lower income in lower tax jurisdictions and the implementation of the global minimum tax. Moving to slide 9, which shows the evolution of the CET1 ratio and risk-weighted assets during the quarter, the bank's CET1 capital ratio was 13.2%, down approximately 10 basis points quarter over quarter. Internal capital generation was 9 basis points, while gains from higher fair values of OCI securities contributed 5 basis points. This was offset by the allocation of capital to share repurchases of approximately 12 basis points and 7 basis points.

Investment expenses grew 11% year-over-year and 4% quarter-over-quarter, driven by higher personnel costs, including performance-based compensation and technology costs. The PCLs were approximately CAD 1.1 billion, mostly impaired, and the PCL ratio was 58 basis points. The bank's effective tax rate increased to 23.6% from 21.8% last year, due primarily to lower income in lower tax jurisdictions and the implementation of the global minimum tax. Moving to slide nine, which shows the evolution of the CET1 ratio and risk-weighted assets during the quarter, the bank's CET1 capital ratio was 13.2%, down approximately 10 basis points quarter-over-quarter. Internal capital generation was 9 basis points, while gains from higher fair values of OCI securities contributed 5 basis points. This was offset by the allocation of capital to share repurchases of approximately 12 basis points and 7 basis points.

Speaker #2: Expenses grew 11% year over year, and 4% quarter over quarter driven by higher personal costs including performance-based compensation and technology costs. The PCLs were approximately 1.1 billion dollars, mostly impaired, and the PCL ratio was 58 basis points.

Speaker #2: The bank's effective tax rate increased to 23.6% from 21.8% last year, due primarily to lower income in lower tax jurisdictions and the implementation of the Global Minimum Tax.

Speaker #2: Moving to slide nine, which shows the evolution of the CET1 ratio and risk-weighted assets during the quarter. The bank's CET1 capital ratio was 13.2%, down approximately 10 basis points quarter over quarter.

Speaker #2: Internal capital generation was 9 basis points, while gains from higher fair values of OCI securities contributed 5 basis points. This was offset by the allocation of capital to share repurchases of approximately 12 basis points and 7 basis points from the impact of adjusting items.

Raj Viswanathan: From the impact of adjusting items, risk-weighted assets grew $6 billion excluding the impact of FX to $474 billion from book size and book quality changes of $4 billion, the impact of model updates, and higher operational risk, partly offset by lower market risk. The bank remains committed to maintaining strong capital and liquidity ratios in 2026. Turning now to the Business Line results beginning on slide 10, Canadian Banking reported earnings of $942 million, up 1% year over year as pre-tax pre-provision profit growth of 3% was mostly offset by a substantial increase in loan loss provisions. The average loans were up 2% year over year as mortgages grew 4% and credit cards 1%, partly offset by lower personal and commercial loans. Although deposits were down 1% year over year, retail savings deposits grew 7%, and the retail day-to-day balances grew 6%.

From the impact of adjusting items, risk-weighted assets grew CAD 6 billion excluding the impact of FX to CAD 474 billion from book size and book quality changes of CAD 4 billion, the impact of model updates, and higher operational risk, partly offset by lower market risk. The bank remains committed to maintaining strong capital and liquidity ratios in 2026. Turning now to the Business Line results beginning on slide 10, Canadian Banking reported earnings of CAD 942 million, up 1% year-over-year as pre-tax pre-provision profit growth of 3% was mostly offset by a substantial increase in loan loss provisions. The average loans were up 2% year-over-year as mortgages grew 4% and credit cards 1%, partly offset by lower personal and commercial loans. Although deposits were down 1% year-over-year, retail savings deposits grew 7%, and the retail day-to-day balances grew 6%.

Speaker #2: Risk-weighted assets grew 6 billion dollars, excluding the impact of FX, to 474 billion, from book size and book quality changes of 4 billion, the impact of model updates, and higher operational risk, partly offset by lower market risk.

Speaker #2: The bank remains committed to maintaining strong capital and liquidity ratios in Turning now to the business line results, beginning on slide 10, Canadian banking reported earnings of 942 million dollars, up 1% year over year, as pre-tax pre-provision profit growth of 3% was mostly offset by substantial increase in loan loss provisions.

Speaker #2: The average loans were up 2% year over year, as mortgages grew 4% and credit cards 1%, partly offset by lower personal and loans. Although deposits were down commercial 1% year over year, retail savings deposits grew 7%, and the retail day-to-day balances grew 6%.

Speaker #2: This was offset by an 8% reduction in retail term deposits and a 2% decline in non-personal deposits, that improved the deposit mix in line with our strategic objectives.

Raj Viswanathan: This was offset by an 8% reduction in retail term deposits and a 2% decline in non-personal deposits that improved the deposit mix in line with our strategic objectives. Net interest income grew 1% year over year due primarily to loan growth, while year over year net interest margin was down 2 basis points due to business mix changes. Quarter over quarter, net interest margin expanded 1 basis point from higher asset and deposit margins, partly offset by the impact of changes in business mix. Non-interest income was up 8% compared to the prior year due to elevated private equity gains, higher mutual fund distribution fees, and insurance income. The PCL ratio was 43 basis points. Expenses grew a modest 2% year over year and 1% quarter over quarter from higher investments in technology that support our strategic initiatives. The fiscal 2025 operating leverage was negative 1.6%.

This was offset by an 8% reduction in retail term deposits and a 2% decline in non-personal deposits that improved the deposit mix in line with our strategic objectives. Net interest income grew 1% year-over-year due primarily to loan growth, while year-over-year net interest margin was down 2 basis points due to business mix changes. Quarter-over-quarter, net interest margin expanded 1 basis point from higher asset and deposit margins, partly offset by the impact of changes in business mix. Non-interest income was up 8% compared to the prior year due to elevated private equity gains, higher mutual fund distribution fees, and insurance income. The PCL ratio was 43 basis points. Expenses grew a modest 2% year-over-year and 1% quarter-over-quarter from higher investments in technology that support our strategic initiatives. The fiscal 2025 operating leverage was negative 1.6%.

Speaker #2: Net interest income grew 1% year over year, due primarily to loan growth, while year over year net interest margin was down 2 basis points due to business mix changes.

Speaker #2: Quarter over quarter net interest margin expanded 1 basis point, from higher asset and deposit margins partly offset by the impact of changes in business mix.

Speaker #2: Non-interest income was up 8% compared to the prior year, due to elevated private equity gains and higher mutual fund distribution fees and insurance income.

Speaker #2: The PCL ratio was 43 basis points. Expenses grew a modest 2% year over year, and 1% quarter over quarter from higher investments in initiatives.

Speaker #2: The fiscal 1.6%. Technology that supports our strategic management on slide 2025. Operating leverage was negative 11. Earnings of $453 million were up 17%.

Raj Viswanathan: Turning now to Global Wealth Management on slide 11, earnings of CAD 453 million were up 17%. Canadian earnings grew 16% year over year to CAD 390 million, driven by higher brokerage revenues, net interest income from private banking, and strong mutual fund fee growth driven by assets under management growth of 15%. International wealth generated earnings of CAD 63 million, up 30% year over year, driven by higher net interest income and higher mutual fund fees as AUM grew 25% for the full year. Operating leverage was positive 1.6%. The spot AUM increased 16% year over year to CAD 430 billion, and AUA grew 13% year over year to almost CAD 800 billion, driven by market appreciation and higher net sales. Turning to slide 12, Global Banking and Markets delivered earnings of CAD 519 million, up 50% year over year.

Turning now to Global Wealth Management on slide 11, earnings of CAD 453 million were up 17%. Canadian earnings grew 16% year-over-year to CAD 390 million, driven by higher brokerage revenues, net interest income from Private Banking, and strong mutual fund fee growth driven by assets under management growth of 15%. International Wealth generated earnings of CAD 63 million, up 30% year-over-year, driven by higher net interest income and higher mutual fund fees as AUM grew 25% for the full year. Operating leverage was positive 1.6%. The spot AUM increased 16% year-over-year to CAD 430 billion, and AUA grew 13% year-over-year to almost CAD 800 billion, driven by market appreciation and higher net sales. Turning to slide 12, Global Banking and Markets delivered earnings of CAD 519 million, up 50% year-over-year.

Speaker #2: Canadian earnings grew 16% year over year to 390 million dollars, driven by higher brokerage revenues, net interest income from private banking, and strong mutual fund fee growth, driven by assets under management growth of 15%.

Speaker #2: International wealth generated earnings of 63 million dollars, up 30% year over year, driven by higher net interest income and higher mutual fund fees, as AUM grew 25%.

Speaker #2: The full year operating leverage was positive increased 16% year over year to 1.6%. The spot AUM 430 billion dollars, and AUA grew 13% year over year to almost 800 billion, driven by market appreciation and higher net sales.

Speaker #2: slide Turning to 12, global banking and markets delivered earnings of 519 million dollars, up 50% year over year. Revenue increased 24% year over year, as capital markets revenues were up 43%, driven by strong growth across both FICC and global equities.

Raj Viswanathan: Revenue increased 24% year over year as capital markets revenues were up 43%, driven by strong growth across both FICC and global equities. Quarter over quarter, revenues were up 3%, driven by higher business banking revenues year over year. Net interest income was up 29% from higher lending margins and deposit volumes quarter over quarter. Net interest income was up 4% from higher deposit margins and volume growth. Loan balances declined 8% year over year and were in line with last quarter. However, deposits were up 4% quarter over quarter and year over year. The non-interest income was up 23% year over year, driven by higher fee and commission revenues, and underwriting and advisory fees. Expenses were up 11% year over year, mainly due to higher personnel costs, including performance-based compensation, and higher technology costs. Operating leverage was a strong 7.7% in fiscal 2025.

Revenue increased 24% year-over-year as capital markets revenues were up 43%, driven by strong growth across both FICC and Global Equities. Quarter-over-quarter, revenues were up 3%, driven by higher business banking revenues year-over-year. Net interest income was up 29% from higher lending margins and deposit volumes quarter-over-quarter. Net interest income was up 4% from higher deposit margins and volume growth. Loan balances declined 8% year-over-year and were in line with last quarter. However, deposits were up 4% quarter-over-quarter and year-over-year. The non-interest income was up 23% year-over-year, driven by higher fee and commission revenues, and underwriting and advisory fees. Expenses were up 11% year-over-year, mainly due to higher personnel costs, including performance-based compensation, and higher technology costs. Operating leverage was a strong 7.7% in fiscal 2025.

Speaker #2: Quarter over quarter revenues were up 3%, driven by higher business banking revenues. Year over year, net interest income was up 29% from higher lending margins and deposit volumes.

Speaker #2: Quarter over quarter net interest income was up 4% from higher deposit margins and volume growth. Loan balances declined 8% year over year, and were in line with last quarter, however, deposits were up 4% quarter over quarter, and year over year.

Speaker #2: The non-interest income was up 23% year over year, driven by higher fee and commission revenues, and underwriting and advisory fees. Expenses were up 11% year over year, mainly due to higher personal costs including performance-based compensation, and higher technology costs.

Speaker #2: Operating leverage was a strong 7.7% in fiscal 2025. Moving to slide 13 for a review of international banking, the segment delivered earnings of $638 million, down 7% year over year, but up 3% quarter over quarter.

Raj Viswanathan: Moving to slide 13 for a review of International Banking, the segment delivered earnings of CAD 638 million, up 3% year over year, but down 7% quarter over quarter. Revenue was up 3% year over year as non-interest income grew 7% from higher capital markets revenues, while net interest income increased 2% year over year from margin expansion of 12 basis points, mainly from lower funding costs. Deposits were up 4% year over year, with personal deposits growing at 1% and non-personal up 5%. Loans were down 2% year over year as business loans declined 7%, while retail loans grew 4%. The provision for credit losses was 144 basis points, up 5 basis points quarter over quarter. Expenses were up a modest 2% compared to the prior year and prior quarter from continued disciplined expense management, resulting in full-year operating leverage of positive 1.6%.

Moving to slide 13 for a review of International Banking, the segment delivered earnings of CAD 638 million, up 3% year-over-year, but down 7% quarter-over-quarter. Revenue was up 3% year-over-year as non-interest income grew 7% from higher capital markets revenues, while net interest income increased 2% year-over-year from margin expansion of 12 basis points, mainly from lower funding costs. Deposits were up 4% year-over-year, with personal deposits growing at 1% and non-personal up 5%. Loans were down 2% year-over-year as business loans declined 7%, while retail loans grew 4%. The provision for credit losses was 144 basis points, up 5 basis points quarter-over-quarter. Expenses were up a modest 2% compared to the prior year and prior quarter from continued disciplined expense management, resulting in full-year operating leverage of positive 1.6%.

Speaker #2: Revenue was up 3% over year over year, as non-interest income grew 7% from higher capital markets revenues, while net interest income increased 2% year over year, from margin expansion of 12 basis points mainly from lower funding costs.

Speaker #2: Deposits were up 4% year over year, with personal deposits growing at 1% and non-personal up 5%. Loans were down 2% year over year, as business loans declined 7%, while retail loans grew 4%.

Speaker #2: The provision for credit losses was 144 basis points, up 5 basis points quarter over quarter. Expenses were up a modest 2% compared to the prior year, and prior quarter, from continued disciplined expense management, resulting in full year operating leverage of positive 1.6%.

Raj Viswanathan: The effective tax rate increased to 22.9% from 20.7% in the prior year due to global minimum tax implementation and earnings mix changes. The GBM business in International Banking generated earnings of CAD 295 million, up 19% year over year, or up 13% on a constant FX basis, driven by good performance in Brazil and Mexico. Turning to Slide 14, the Other segment reported an adjusted net loss of CAD 34 million, an improvement of CAD 22 million compared to the prior quarter. With that, I'll now turn the call over to Phil to discuss risk.

The effective tax rate increased to 22.9% from 20.7% in the prior year due to global minimum tax implementation and earnings mix changes. The GBM business in International Banking generated earnings of CAD 295 million, up 19% year-over-year, or up 13% on a constant FX basis, driven by good performance in Brazil and Mexico. Turning to Slide 14, the Other segment reported an adjusted net loss of CAD 34 million, an improvement of CAD 22 million compared to the prior quarter. With that, I'll now turn the call over to Phil to discuss risk.

Speaker #2: The effective tax rate increased to 22.9% from 20.7% in the prior year, due to global minimum tax implementation, and earnings mix changes. The GBM business in international banking generated earnings of 295 million up 19% year over by good performance in Brazil and year, or up 13% on a constant Mexico.

Speaker #2: The effective tax rate increased to 22.9% from 20.7% in the prior year, due to global minimum tax implementation, and earnings mix changes. The GBM business in international banking generated earnings of 295 million up 19% year over by good performance in Brazil and year, or up 13% on a constant FX basis, driven Turning to slide 14, the other segment reported an adjusted net loss of 34 million and improvement of 22 million compared to the prior quarter.

Speaker #2: With that, I'll now turn the call over to Phil to discuss risk. Thank you, Raj, and good morning, everyone. This quarter, we continue to operate in what remains a highly uncertain macroeconomic environment.

Phil Thomas: Thank you, Raj, and good morning, everyone. This quarter, we continue to operate in what remains a highly uncertain macroeconomic environment. Shifting tariff policy and an unclear path forward on trade negotiations are muting economic activity, even as some indicators are showing signs of resilience. Looking at this quarter's results, all bank PCLs were approximately CAD 1.1 billion, or 58 basis points, up CAD 72 million, or 3 basis points, quarter over quarter. Compared PCLs were approximately CAD 1 billion, or 54 basis points, up 3 basis points quarter over quarter, and in line with the outlook we provided in Q3. The increase in impaired was mainly driven by our retail portfolios across both Canadian and International Banking.

Phil Thomas: Thank you, Raj, and good morning, everyone. This quarter, we continue to operate in what remains a highly uncertain macroeconomic environment. Shifting tariff policy and an unclear path forward on trade negotiations are muting economic activity, even as some indicators are showing signs of resilience. Looking at this quarter's results, all bank PCLs were approximately CAD 1.1 billion, or 58 basis points, up CAD 72 million, or 3 basis points, quarter-over-quarter. Compared PCLs were approximately CAD 1 billion, or 54 basis points, up 3 basis points quarter-over-quarter, and in line with the outlook we provided in Q3. The increase in impaired was mainly driven by our retail portfolios across both Canadian and International Banking.

Speaker #2: Shifting tariff policy and an unclear path forward on trade negotiations are muting economic activity, even as some indicators are showing signs of resilience. Looking at this quarter's results, all bank TCLs were approximately $1.1 billion, or 58 basis points, up $72 million, or 3 basis points, quarter over quarter.

Speaker #2: PCLs were approximately $1 billion or 54 basis points for the quarter, and in line with the outlook we provided, up 3 basis points quarter over Q3.

Speaker #2: The increase in impaired was mainly driven by our retail portfolio's across both Canadian and international banking. Now turning to the business lines, in Canadian banking PCLs were 494 million dollars or 43 basis points, up 3 basis points quarter over quarter.

Phil Thomas: Now turning to the business lines, in Canadian banking, PCLs are CAD 494 million, 43 basis points, up 3 basis points quarter over quarter. In retail, PCLs were CAD 354 million, up CAD 34 million quarter over quarter. Performing retail PCLs were CAD 21 million, primarily driven by negative migration that was partially offset by improvements in prime auto releases as performing mortgage allowances migrated to impaired. Impaired retail PCLs were 36 basis points, up 2 basis points quarter over quarter, driven primarily by unsecured lines and Canadian mortgages. Although clients are showing some signs of stress, partially due to elevated unemployment, these remain isolated and not systemic. Overall, 94% of our Canadian retail exposure is secured with an average FICO score above 790. Ninety day plus mortgage delinquency ticked up 4 basis points quarter over quarter.

Now turning to the business lines, in Canadian Banking, PCLs are CAD 494 million, 43 basis points, up 3 basis points quarter-over-quarter. In retail, PCLs were CAD 354 million, up CAD 34 million quarter-over-quarter. Performing retail PCLs were CAD 21 million, primarily driven by negative migration that was partially offset by improvements in prime auto releases as performing mortgage allowances migrated to impaired. Impaired retail PCLs were 36 basis points, up 2 basis points quarter-over-quarter, driven primarily by unsecured lines and Canadian mortgages. Although clients are showing some signs of stress, partially due to elevated unemployment, these remain isolated and not systemic. Overall, 94% of our Canadian retail exposure is secured with an average FICO score above 790. 90 day+ mortgage delinquency ticked up 4 basis points quarter-over-quarter.

Speaker #2: In retail, PCLs were 354 million dollars or 34 million dollars, up 34 million dollars quarter over quarter. Performing retail PCLs were 21 million dollars primarily driven by negative migration that was partially offset by improvements in prime auto and releases as performing mortgage allowances migrated to impaired.

Speaker #2: PCLs were 36 basis Impaired retail points, up 2 basis points quarter over quarter, driven primarily by unsecured lines and Canadian mortgages. Although clients are showing some signs of stress, partially due to elevated unemployment, these remain isolated and not systemic.

Speaker #2: Overall, 94% of our Canadian retail exposure is secured, with an average FICO score above 790. 90-day-plus mortgage delinquency ticked up 4 basis points quarter over quarter.

Speaker #2: Increased delinquency was seen across both fixed-rate and variable-rate clients, driven primarily by weakness in Ontario and, more specifically, in the GTA. On unsecured loans, we continue to see some weakness, with delinquency driven mainly by non-primary and younger clients.

Phil Thomas: Increased delinquency was seen across both fixed rate and variable rate clients, driven primarily from weakness in Ontario and, more specifically, in the GTA. On unsecured, we continue to see some weakness, with delinquency driven mainly by non-primary and younger clients. In our Canadian commercial portfolio, PCLs totaled CAD 140 million, up CAD 4 million from Q3. Notably, new formations slowed quarter over quarter. Moving to International Banking, the PCL ratio was 144 basis points, up 5 basis points quarter over quarter, driven primarily by impaired PCLs. In International Retail, total PCLs were CAD 2,239 million, up CAD 21 million quarter over quarter, excluding FX. Performing retail PCLs were CAD 32 million, driven by portfolio growth and continued credit quality deterioration, primarily in Chile consumer finance. Impaired PCLs were CAD 468 million, up CAD 17 million excluding FX, driven by Chile consumer finance and increased net write-offs in Mexico.

Increased delinquency was seen across both fixed rate and variable rate clients, driven primarily from weakness in Ontario and, more specifically, in the GTA. On unsecured, we continue to see some weakness, with delinquency driven mainly by non-primary and younger clients. In our Canadian commercial portfolio, PCLs totaled CAD 140 million, up CAD 4 million from Q3. Notably, new formations quarter-over-quarter. Moving to International Banking, the PCL ratio was 144 basis points, up 5 basis points quarter-over-quarter, driven primarily by impaired PCLs. In International Retail, total PCLs were CAD 2,239 million, up CAD 21 million quarter-over-quarter, excluding FX. Performing retail PCLs were CAD 32 million, driven by portfolio growth and continued credit quality deterioration, primarily in Chile consumer finance. Impaired PCLs were CAD 468 million, up CAD 17 million excluding FX, driven by Chile consumer finance and increased net write-offs in Mexico.

Speaker #2: In our Canadian commercial portfolio, PCLs totaled 140 million dollars, up 4 million dollars from Q3, quarter over notably new formations slowed quarter. Moving international banking, the PCL ratio was 144 basis points, up 5 basis points quarter over quarter, driven primarily by impaired PCLs.

Speaker #2: In international retail, total PCLs were 239 basis points, up $21 million quarter over quarter, excluding FX. Performing retail PCLs were $32 million, driven by portfolio growth and continued credit quality deterioration, primarily in Chile's consumer finance.

Speaker #2: Impaired PCLs were $468 million, up $17 million, excluding FX, driven by Chile consumer finance and increased net write-offs in Mexico. On a full-year basis, our all-bank PCL ratio was 62 basis points, of which 54 were impaired.

Phil Thomas: On a full year basis, our all bank PCL ratio was 62 basis points, of which 54 was impaired. The significant performing build in Q2 contributed to an increase of performing allowances by $630 million in fiscal 2025. That helped increase the total ACL ratio by 10 basis points year over year to 98 basis points. Looking ahead to fiscal 2026, we expect the full year impaired ratio to be in the high 40s to mid-50s basis point range. The outlook reflects the expectation that we will continue to operate in an environment of elevated global macroeconomic uncertainty in fiscal 2026. In Canada, the absence of a trade deal with the US and elevated unemployment continue to weigh on sentiment.

On a full year basis, our all bank PCL ratio was 62 basis points, of which 54 was impaired. The significant performing build in Q2 contributed to an increase of performing allowances by CAD 630 million in fiscal 2025. That helped increase the total ACL ratio by 10 basis points year-over-year to 98 basis points. Looking ahead to fiscal 2026, we expect the full year impaired ratio to be in the high 40s to mid-50s basis point range. The outlook reflects the expectation that we will continue to operate in an environment of elevated global macroeconomic uncertainty in fiscal 2026. In Canada, the absence of a trade deal with the US and elevated unemployment continue to weigh on sentiment.

Speaker #2: The significant performing build in Q2 contributed to an increase of performing allowances by 630 million dollars in fiscal 2025, that helped increase the total ACL ratio by 10 basis points year over year to 98 basis points.

Speaker #2: Looking ahead to fiscal full year 2026, we expect the impaired ratio to be in the high 40s to mid 50s basis point range. The outlook reflects the expectation that we will continue to operate in an environment of elevated global macroeconomic uncertainty in fiscal 2026.

Speaker #2: In Canada, the absence of a trade deal with the U.S. and elevated unemployment continue to weigh on sentiment. However, we are cautiously optimistic that the federal budget will contribute to greater economic growth and improved consumer and business sentiment, which will benefit performance in the latter half of the year.

Phil Thomas: However, we are cautiously optimistic that the federal budget will contribute to greater economic growth and improved consumer and business sentiment that will benefit the performance in the latter half of the year. In International Banking, the outlook across the region remains mixed, characterized generally by subdued economic activity and evolving political dynamics in Peru and Chile. Looking across our markets in Mexico, trade negotiations continue to weigh on overall sentiment, but GDP forecasts are being revised upwards, suggesting some resilience amid ongoing uncertainty. Chile's forecast remains stable, supported by strong commodity prices. However, unemployment remains elevated, and as a result, we are seeing continued softness in our consumer finance portfolio. Peru's GDP outlook remains stable. However, the benefit of the pension fund withdrawals and client liquidity is tapering, and political uncertainty will linger until we get past next year's presidential and parliamentary elections.

However, we are cautiously optimistic that the federal budget will contribute to greater economic growth and improved consumer and business sentiment that will benefit the performance in the latter half of the year. In International Banking, the outlook across the region remains mixed, characterized generally by subdued economic activity and evolving political dynamics in Peru and Chile. Looking across our markets in Mexico, trade negotiations continue to weigh on overall sentiment, but GDP forecasts are being revised upwards, suggesting some resilience amid ongoing uncertainty. Chile's forecast remains stable, supported by strong commodity prices. However, unemployment remains elevated, and as a result, we are seeing continued softness in our consumer finance portfolio. Peru's GDP outlook remains stable. However, the benefit of the pension fund withdrawals and client liquidity is tapering, and political uncertainty will linger until we get past next year's presidential and parliamentary elections.

Speaker #2: In international banking, the outlook across the region remains mixed, characterized generally by subdued economic activity and evolving political dynamics, including improvement in Chile. Looking across our markets, in Mexico, trade negotiations continue to weigh on overall sentiment, but GDP forecasts are being revised upwards, suggesting some resilience amid ongoing uncertainty.

Speaker #2: Chile's forecast remains stable, supported by strong commodity prices; however, unemployment remains elevated, and as a result, we are seeing continued softness in our consumer finance portfolio.

Speaker #2: Bruised GDP outlook remains stable; however, the benefit of the pension fund withdrawals and client liquidity is tapering, and political uncertainty will linger until we get past next year's presidential and parliamentary elections.

Speaker #2: It is important to note that we are seeing the early signs of our primacy strategy in international banking driving improved credit outcomes across the region.

Phil Thomas: It is important to note that we are seeing the early signs of our primacy strategy in International Banking driving improved credit outcomes across the region. While these benefits are observable in the behavior of our newer vintages since 2023, overall credit performance is still being impacted by older vintages. In closing, the credit picture remains stable, but trade uncertainty continues to be a factor across our markets. We remain comfortable with the adequacy of our allowances and the overall quality of our portfolio. With that, I will pass it back to Manny for Q and A.

It is important to note that we are seeing the early signs of our primacy strategy in International Banking driving improved credit outcomes across the region. While these benefits are observable in the behavior of our newer vintages since 2023, overall credit performance is still being impacted by older vintages. In closing, the credit picture remains stable, but trade uncertainty continues to be a factor across our markets. We remain comfortable with the adequacy of our allowances and the overall quality of our portfolio. With that, I will pass it back to Meny for Q&A.

Speaker #2: All these benefits are observable in the behavior of our newer vintages since 2023. Overall credit performance is still being impacted by older vintages. In closing, the credit picture remains stable; trade and trade uncertainty continue to be factors across our markets.

Speaker #2: We remain comfortable with the adequacy of our allowances and the overall quality of our portfolio. With that, I will pass it back to Meny for.

Speaker #2: Q&A. Operator, can we have a

Scott Thomson: Operator, can we have our first question, please?

Meny Grauman: Operator, can we have our first question, please?

Speaker #1: first question, please?

Operator: If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, again press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. Your first question comes from the line of Ibrahim Poonawalla with Bank of America. Please go ahead.

Operator: If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, again press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. Your first question comes from the line of Ebrahim Poonawala with Bank of America. Please go ahead.

Speaker #3: Please press *1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw that, or if you would like to ask a question, again press *1.

Speaker #3: We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. And your first question comes from the line of Ibrahim Punawalla with Bank of America.

Speaker #3: Please go

Speaker #3: ahead. Hey, good morning.

[Analyst]: Good morning. I guess maybe Raj, I think you mentioned double-digit EPS growth in the Canadian banking segment. If you don't mind unpacking that for us. In terms of how much of that is like PCL normalization relative to the imped guidance you just put out, what should we expect in terms of the PTPP growth? Is it loan growth that's going to be driving it? Is it margin expansion? If you could just dig into that a little. Thanks.

Ebrahim Poonawala: Good morning. I guess maybe Raj, I think you mentioned double-digit EPS growth in the Canadian Banking segment. If you don't mind unpacking that for us. In terms of how much of that is like PCL normalization relative to the imped guidance you just put out, what should we expect in terms of the PTPP growth? Is it loan growth that's going to be driving it? Is it margin expansion? If you could just dig into that a little. Thanks.

Speaker #4: I guess double-digit EPS growth in the Canadian banking segment, maybe Raj, I think you mentioned. If you don't mind unpacking that for us in terms of how much of that is like PCL normalization relative to the impaired guidance you just put out, and then what should we expect in terms of the PTPP growth?

Speaker #4: Is it loan growth that's going to be driving it? Is it margin expansion? If you could just dig into that a little. Thanks.

Raj Viswanathan: Yeah, sure. Ibrahim, good morning. I think the growth will come from what I would call mid single digit PTPP growth, and there's going to be a combination. John, just from loan growth, Ibrahim, to be very clear, you've seen the deposit growth that we've been showing quarter after quarter in the Canadian bank, and more importantly, the right deposit growth. That's contributing to margin expansion, which even this quarter was one basis point up quarter over quarter. It's going to come from margin expansion driven both by, you know, the repricing of the loans. There's a lot of fixed rate mortgages that are coming up for repricing in 2026.

Raj Viswanathan: Yeah, sure. Ebrahim, good morning. I think the growth will come from what I would call mid single digit PTPP growth, and there's going to be a combination. John, just from loan growth, Ebrahim, to be very clear, you've seen the deposit growth that we've been showing quarter-after-quarter in the Canadian Bank, and more importantly, the right deposit growth. That's contributing to margin expansion, which even this quarter was one basis point up quarter-over-quarter. It's going to come from margin expansion driven both by, you know, the repricing of the loans. There's a lot of fixed rate mortgages that are coming up for repricing in 2026.

Speaker #1: Yeah, sure, Ibrahim. Good morning. I think the growth will come from what I would call mid-single-digit PTPP growth, and there's going to be a combination.

Speaker #1: Just from loan growth, Ibrahim, to be very clear, you've seen the deposit growth that we've been showing quarter after quarter in the Canadian bank, and more importantly, the right deposit growth.

Speaker #1: So that's contributing to margin expansion, which even this quarter was one basis point up quarter over quarter. So it's going to come from margin expansion driven both by the repricing of the loans.

Speaker #1: There's a lot of fixed-rate mortgages that are coming up for repricing in 2026. We anticipate improvement in our deposit margin as we continue to build out through primacy some of our very valuable deposits and reduce some of the term deposits, which naturally also move towards the wealth segment, as we know.

Raj Viswanathan: Improvement in our deposit margin as we continue to build out through primacy some of our, you know, very valuable deposits and take down some of the term deposits, which naturally also move towards the wealth segment, as we know. It's a combination of that. Of course, expense management is going to be more disciplined, including the benefits of some of the restructuring charge that they're expected to get. Not all of the restructuring charge benefits are likely to fall to the bottom line because we are going to invest in our product capabilities and our frontline people, so that we can continue to grow the business. That's kind of the composition of the PTPP growth. You're absolutely right. PCL is expected to normalize, is probably the way I would call it. Like this quarter was 43 basis points.

Improvement in our deposit margin as we continue to build out through primacy some of our, you know, very valuable deposits and take down some of the term deposits, which naturally also move towards the wealth segment, as we know. It's a combination of that. Of course, expense management is going to be more disciplined, including the benefits of some of the restructuring charge that they're expected to get. Not all of the restructuring charge benefits are likely to fall to the bottom line because we are going to invest in our product capabilities and our frontline people, so that we can continue to grow the business. That's kind of the composition of the PTPP growth. You're absolutely right. PCL is expected to normalize, is probably the way I would call it. Like this quarter was 43 basis points.

Speaker #1: So it's a combination of that, and of course expense management is going to be more disciplined, including the benefits of some of the restructuring charge that they're expected to get.

Speaker #1: Not all of the restructuring charge benefits are likely to fall to the bottom line because we are going to invest in our product capabilities and our frontline people, so that we can continue to grow the business.

Speaker #1: So that's kind of the composition of the PTPP growth. You're absolutely right. PCL is expected to normalize, is probably the way I would call it.

Speaker #1: Like this quarter was 43 basis points, we think that will be somewhere in the high 30s next quarter. I mean, you just heard next year, you just heard Phil talk a little bit about his outlook.

Raj Viswanathan: We think that will be somewhere in the high 30s next quarter. I mean, you just heard next year, you just heard Phil talk a little bit about his outlook, slightly elevated, impaired perhaps in the first couple of quarters, and then normalized down is our expectation at this time. PCL will be a meaningful contributor to the bottom line growth. I think Aris might have a couple of more comments.

We think that will be somewhere in the high 30s next quarter. I mean, you just heard next year, you just heard Phil talk a little bit about his outlook, slightly elevated, impaired perhaps in the first couple of quarters, and then normalized down is our expectation at this time. PCL will be a meaningful contributor to the bottom line growth. I think Aris might have a couple of more comments.

Speaker #1: Slightly elevated impaired, perhaps in the first couple of quarters, and then normalized down is our expectation at this time. So PCL will be a meaningful contributor to the bottom line growth.

Speaker #1: I think Harris might have a couple of more comments.

Aris Bogdaneris: Hi, Ibrahim Poonawalla here. I just wanted to add one thing to what Raj said. I think it's important also on the fee line, we're going to see very good fee growth, almost double digit next year across insurance, mutual fund fees as we grow, and also card fees. This is something we've been investing in and working on very hard, and we'll start to see that impact in F2026, which will also help us drive positive operating leverage.

Aris Bogdaneris: Hi, Ebrahim, Aris here. I just wanted to add one thing to what Raj said. I think it's important also on the fee line, we're going to see very good fee growth, almost double digit next year across insurance, mutual fund fees as we grow, and also card fees. This is something we've been investing in and working on very hard, and we'll start to see that impact in F2026, which will also help us drive positive operating leverage.

Speaker #5: Hi Ibrahim, Harris here. I just wanted to add one thing to what Raj said. I think it's important also on the fee line. We're going to see very good fee growth, almost double-digit next year, across insurance, mutual fund fees as we grow, and also card fees.

Speaker #5: And so this is something we've been investing in and working on very hard, and we'll start to see that impact in F26, which will also help us drive positive operating

Speaker #5: leverage.

[Analyst]: Got it. Thank you for that. I guess maybe one, Scott, for you. You made significant progress over the last two years. As we think about the ROE journey from here, two questions. One, structurally, like a lot of your peers, are targeting a 15%, 16% ROE structurally, are there any reasons why Scotia cannot attain a 16% ROE? Number one, and second, in terms of capital deployment, talk to us in terms of priorities. Could M&A, you've talked about us being obviously the second most important market, is there any tactical M&A that you would look to do over the course of the next year? Thanks.

Ebrahim Poonawala: Got it. Thank you for that. I guess maybe one, Scott, for you. You made significant progress over the last two years. As we think about the ROE journey from here, two questions. One, structurally, like a lot of your peers, are targeting a 15%, 16% ROE structurally, are there any reasons why Scotia cannot attain a 16% ROE? Number one, and second, in terms of capital deployment, talk to us in terms of priorities. Could M&A, you've talked about us being obviously the second most important market, is there any tactical M&A that you would look to do over the course of the next year? Thanks.

Speaker #4: Good, thank

Speaker #4: Squad for you, you for that. And I guess maybe one you made significant progress over the last two years as we think about the ROE journey from Year 2 questions.

Speaker #4: One, structurally, like a lot of your peers are targeting a 15%, 16% ROE. Structurally, are there any reasons why Scotia cannot attain a 16% ROE?

Speaker #4: Number one. And second, in terms of capital deployment, talk to us in terms of priorities. Could M&A, you've talked about US being obviously the second most important market, is there any tactical M&A that you would look to do over the course of the

Speaker #4: next year? Thanks.

Scott Thomson: Right, as we said when we rolled out the investor day two years ago, we said 14% plus and we thought 14% was a conservative estimate. We are tracking ahead of that plan to date, seeing good ROE expansion in our international bank, good ROE expansion in our GBM bank, continued growth in wealth, which we know is ROE accretive. Next year you're going to see significant earnings growth in our Canadian bank and significant ROE expansion in our Canadian bank. As we sit here next year at this time, I'm confident you're going to see another step in that ROE journey, which is going to get us a lot closer to that 14% probably a year earlier than we thought. Is 14% plus conservative? I continue to believe it's conservative.

Scott Thomson: Right, as we said when we rolled out the investor day two years ago, we said 14%+ and we thought 14% was a conservative estimate. We are tracking ahead of that plan to date, seeing good ROE expansion in our International Bank, good ROE expansion in our GBM bank, continued growth in wealth, which we know is ROE accretive. Next year you're going to see significant earnings growth in our Canadian Bank and significant ROE expansion in our Canadian Bank. As we sit here next year at this time, I'm confident you're going to see another step in that ROE journey, which is going to get us a lot closer to that 14% probably a year earlier than we thought. Is 14%+ conservative? I continue to believe it's conservative.

Speaker #1: the investor day two years ago, we said so as we said when we rolled out 14% plus, and we thought 14% was a conservative estimate.

Speaker #1: And we are tracking ahead of that plan to date. Seeing good ROE expansion in our international bank, good ROE expansion in our GBM bank, continued growth of wealth, which we know is ROE accretive.

Speaker #1: And next year you're going to see significant earnings growth in our Canadian bank and significant ROE expansion in our Canadian bank. And so as we sit here next year at this time, I'm confident you're going to see another step in that ROE journey which is going to get us a lot 14%.

Speaker #1: Probably a year earlier than we thought. And so is 14% plus conservative? I continue to believe it's conservative. But part of this journey is continuing to deliver day in and day out for our shareholders on a consistent basis and do what we say we're going to do.

Scott Thomson: Part of this journey is continuing to deliver day in and day out for our shareholders on a consistent basis and do what we say we're going to do. We're eight quarters now into doing that, so we're going to continue on that journey. In terms of your question on capital allocation, the focus is on organic. You know, we've got so many opportunities with organic deployment. We saw what GBM is doing in terms of new product capabilities and opportunity. There you see this new economic trajectory in Canada where I do think there's going to be a demand for capital. We have a pivot to growth in IB which will start to come in the back half of this year and then our Canadian commercial business as well.

Part of this journey is continuing to deliver day in and day out for our shareholders on a consistent basis and do what we say we're going to do. We're eight quarters now into doing that, so we're going to continue on that journey. In terms of your question on capital allocation, the focus is on organic. You know, we've got so many opportunities with organic deployment. We saw what GBM is doing in terms of new product capabilities and opportunity. There you see this new economic trajectory in Canada where I do think there's going to be a demand for capital. We have a pivot to growth in IB which will start to come in the back half of this year and then our Canadian commercial business as well.

Speaker #1: quarters now into doing that. So we're going to continue on We're eight that journey. In terms of your question on capital allocation, the focus is on our organic.

Speaker #1: We've got so many opportunities with organic deployment. We saw what GBM is doing in terms of new product capabilities, and there's an opportunity there. You see this new economic trajectory in Canada, where I do think there's going to be a demand for capital.

Speaker #1: We have a pivot to growth in IB, which will start to come in the back half of this year, and then our Canadian commercial business as well.

Speaker #1: I think in the back half of this year, we'll start to attract some capital in segments that we Priority two, given the haven't historically been in.

Scott Thomson: I think in the back half of this year we'll start to attract some capital in segments that we haven't historically been in. That would be priority one, priority two. Given the relative valuation, and given our confidence in our plan, we will continue to be repurchasing shares, and you've seen us do that in the last year. You'll continue to see us do that in 2026. Lastly, if there's some product capabilities or some capabilities that we can fill via tuck-ins in the US, I'm thinking wealthier, as we've talked about that, relatively small tuck-ins that help Jacqui grow her business or help Travis close a couple gaps, and we'll think about that. That would be third on the priority list, and there's nothing in the hopper right now for us to be thinking about in that regard.

Scott Thomson: I think in the back half of this year we'll start to attract some capital in segments that we haven't historically been in. That would be priority one, priority two. Given the relative valuation, and given our confidence in our plan, we will continue to be repurchasing shares, and you've seen us do that in the last year. You'll continue to see us do that in 2026. Lastly, if there's some product capabilities or some capabilities that we can fill via tuck-ins in the US, I'm thinking wealthier, as we've talked about that, relatively small tuck-ins that help Jacqui grow her business or help Travis close a couple gaps, and we'll think about that. That would be third on the priority list, and there's nothing in the hopper right now for us to be thinking about in that regard.

Speaker #1: relative valuation and given our confidence in our plan, we will continue to be repurchasing shares. And you've seen us do that in the So that would be priority one.

Speaker #1: last year. You'll continue to see us do that in 2026. And then lastly, if there's some product capabilities or some capabilities that we can fill via tuck-ins in the US, I'm thinking wealthier as we've talked about that.

Speaker #1: Relatively small tuck-ins that help Jackie grow her business or help Travis close a couple of gaps. And we'll think about that, but that would be third on the priority list.

Speaker #1: And there's nothing in the hopper right now for us to be thinking about in that regard.

[Analyst]: Got it. Super clear. Thank you.

Ebrahim Poonawala: Got it. Super clear. Thank you.

Speaker #4: Got it. Super clear. Thank you.

Operator: Your next question comes from the line of John Aiken with Jefferies. Please go ahead.

Operator: Your next question comes from the line of John Aiken with Jefferies. Please go ahead.

Speaker #6: Your next question comes from the line of John Akin with Jefferies. Please go ahead.

[Analyst]: Good morning, Phil. I get the messaging on the outlook for credit next year, but just when we take a look at the domestic retail formations as well as the 90 day plus impact on the quarter, is this, I guess as a messaging, is this more seasonality than underlying weakness that we're seeing that might be a continued trend?

John Aiken: Good morning, Phil. I get the messaging on the outlook for credit next year, but just when we take a look at the domestic retail formations as well as the 90 day+ impact on the quarter, is this, I guess as a messaging, is this more seasonality than underlying weakness that we're seeing that might be a continued trend?

Speaker #7: Good morning, Phil. I get the messaging

Speaker #7: on the outlook for credit next year, but just when we take a look at the domestic retail plus impact on the formations as well as the 90-day ahead.

Speaker #7: quarter, is this I guess is the messaging, is this more seasonality than underlying weakness that we're seeing that might be a continued trend?

Phil Thomas: Hey John, thanks for the question. As I said in my prepared remarks, mostly what we're seeing on the GILs in Canada related to mortgages and particularly mortgages in the GTA. You know, if I look broadly across the Canadian retail portfolio, I'm quite confident that what we're seeing is not systemic. We're still seeing strong FICOs around 790 in the portfolio. Even if I look at where we have 90 plus on the LTV, or sorry, 90 plus delinquencies, the LTVs are still in the low 60s, showing that these mortgages are fairly well collateralized. I'm comfortable overall with the trends in the Canadian portfolio.

Phil Thomas: Hey John, thanks for the question. As I said in my prepared remarks, mostly what we're seeing on the GILs in Canada related to mortgages and particularly mortgages in the GTA. You know, if I look broadly across the Canadian retail portfolio, I'm quite confident that what we're seeing is not systemic. We're still seeing strong FICOs around 790 in the portfolio. Even if I look at where we have 90+ on the LTV, or sorry, 90+ delinquencies, the LTVs are still in the low 60s, showing that these mortgages are fairly well collateralized. I'm comfortable overall with the trends in the Canadian portfolio.

Speaker #1: Hey, John. Thanks for the question. As I said in my prepared remarks, mostly what we're seeing on the gills in Canada related to mortgages and particularly mortgages in the so we're if I GTA.

Speaker #1: look broadly across the Canadian retail portfolio, I'm quite confident that what we're seeing is not systemic. We're seeing still seeing strong FICOs around 790 in the And portfolio.

Speaker #1: And even if I look at where we have 90 plus on the LTV or sorry, 90 plus delinquencies, the LTVs are still in the low mortgages are fairly well collateralized.

Speaker #1: So in the Canadian portfolio, I’m comfortable overall with the trends. There are some weaknesses, as I've mentioned in my prepared remarks for Q4. But I’m confident that as we look forward into 2026, we’ll start to see these yields normalize in the latter half of the year, similar to.

Phil Thomas: There are some weaknesses as I've mentioned in my prepared remarks, but I'm confident that as we look forward into 2026, we'll start to see GILs normalize in the latter half of the year, similar to PCLs.

There are some weaknesses as I've mentioned in my prepared remarks, but I'm confident that as we look forward into 2026, we'll start to see GILs normalize in the latter half of the year, similar to PCLs.

Speaker #1: PCLs. And then

[Analyst]: Phil, just as a follow on, you did mention that the commercial performance in the quarter domestically was very strong. Again, can I take this as a potential positive indicator that we may actually see a bit of a rebound in that segment?

Speaker #7: Phil, just as a follow-on, you did mention that the commercial performance in the quarter domestically was very strong. Again, can I take this as a potential positive indicator that we may actually see a bit of a rebound in that?

John Aiken: Phil, just as a follow on, you did mention that the commercial performance in the quarter domestically was very strong. Again, can I take this as a potential positive indicator that we may actually see a bit of a rebound in that segment?

Speaker #7: segment? Yeah, I was very

Phil Thomas: Yeah, I was very happy to see that commercial GILs and PCLs normalized this quarter. I think that's a lot due to the resilience and the lending quality standards that we have in the Canadian bank, and frankly, the good management that I'm seeing both from the business and from the risk team. As you know, these portfolios can be a bit lumpy, and you may have one or two files that jump up every now and again. I'm confident in the outlook for next year, and particularly in the Canadian bank, that will probably be sort of flat to where we are today in the commercial space.

Phil Thomas: Yeah, I was very happy to see that commercial GILs and PCLs normalized this quarter. I think that's a lot due to the resilience and the lending quality standards that we have in the Canadian Bank, and frankly, the good management that I'm seeing both from the business and from the risk team. As you know, these portfolios can be a bit lumpy, and you may have one or two files that jump up every now and again. I'm confident in the outlook for next year, and particularly in the Canadian Bank, that will probably be sort of flat to where we are today in the commercial space.

Speaker #1: happy to see that commercial gills and PCLs normalized this quarter. I think that's a lot due to the resilience and the lending quality standards that we have in the Canadian bank.

Speaker #1: And frankly, the good management that I'm seeing both from the business and from the risk team. As you know, these portfolios can be a bit lumpy, and you may have one or two files that jump up every now and again, but I'm confident in the outlook for next year and particularly in the Canadian bank that we'll probably be sort of flat to where we are today in the commercial space.

[Analyst]: Great, thanks for the color. I'll requeue.

Ebrahim Poonawala: Great, thanks for the color. I'll re-queue.

Speaker #7: Great. Thanks for the color. I'll read you.

Speaker #6: Your next question comes from the line of Gabriel Duchene with National Bank. Please go ahead.

Operator: Your next question comes from the line of Gabriel Dechaine with National Bank. Please go ahead.

Operator: Your next question comes from the line of Gabriel Dechaine with National Bank. Please go ahead.

Gabriel Dechaine: Good morning. I was wondering, Scott, Raj, if you can just walk me through or maybe confirm some of my high-level conclusions here on your double-digit EPS growth outlook for next year on a segment basis. Double digits in Canada, probably the same for wealth, mid singles for capital markets and international from the sounds of it. Corporate, we don't know. At least the back half will be flat probably, but who knows. Overall, high single digits plus the buybacks to get, you know, double digits. Is that how you're thinking about it?

Gabriel Dechaine: Good morning. I was wondering, Scott, Raj, if you can just walk me through or maybe confirm some of my high-level conclusions here on your double-digit EPS growth outlook for next year on a segment basis. Double digits in Canada, probably the same for wealth, mid singles for capital markets and international from the sounds of it. Corporate, we don't know. At least the back half will be flat probably, but who knows. Overall, high single digits plus the buybacks to get, you know, double digits. Is that how you're thinking about it?

Speaker #8: Good morning. I was wondering, Scott Raj, if you can just walk me through or maybe confirm some of my high-level conclusions here on your double-digit EPS growth outlook for next year.

Speaker #8: So, on a segment basis, double digits in Canada, probably the same for wealth. Mid-singles for capital markets and international, from the sounds of it.

Speaker #8: Corporate, we don't all mean at least the back half will be flat probably, but who knows? So overall, high single digits plus the buybacks to get into the double digits.

Speaker #8: Is that how you're thinking about it?

Raj Viswanathan: Yeah. Gabe, it's Raj. I think you got it mostly right. I'll just make one correction on wealth. I think it might be high single digit. That's probably the one I would say. For IB and GBM, I call it modest growth as the term we use, and that I would equate to like a low single digit growth rather than middle. Now, obviously, markets play a role because we do have a GBM business in IB. GBM is always subject to markets. Of course, the other segment, like you point out, the whole year loss is CAD 347 million. The most recent quarter is CAD 30-odd million. That's got to give us back roughly about CAD 200 million, and of course, repurchase. Right, but we don't need to have repurchases to get to double digit. I think it's a contributor.

Raj Viswanathan: Yeah. Gabe, it's Raj. I think you got it mostly right. I'll just make one correction on wealth. I think it might be high single digit. That's probably the one I would say. For IB and GBM, I call it modest growth as the term we use, and that I would equate to like a low single digit growth rather than middle. Now, obviously, markets play a role because we do have a GBM business in IB. GBM is always subject to markets. Of course, the other segment, like you point out, the whole year loss is CAD 347 million. The most recent quarter is CAD 30-odd million. That's got to give us back roughly about CAD 200 million, and of course, repurchase. Right, but we don't need to have repurchases to get to double digit. I think it's a contributor.

Speaker #1: Yeah, Gabe, it's Raj. I think you got it

Speaker #1: mostly right. I'll just make one correction it? on wealth. I think it might be high single digit. That's probably the one I would say.

Speaker #1: And for IB and GBM, I'd call it modest growth as the term we use, and that I would equate to like a low single digit growth rather than mid.

Speaker #1: Now, obviously, right, markets play a role. Because we do have a GBM business and IB and GBM is always subject to markets. And of course, the other segment, like you point out, the whole year loss is 347 million dollars.

Speaker #1: The most recent quarter is 30 odd million. So that's got to give us back roughly about 200 million dollars. And of course, repurchase, right?

Speaker #1: But we don't need to have repurchases to get to double digits. I think it's a contributor. I think the businesses themselves will get to double digits.

Raj Viswanathan: I think the businesses themselves will get to double digit.

I think the businesses themselves will get to double digit.

Speaker #8: Just a finer point on capital markets, the implication there is that you're earnings in that business are going to be above the run rate, which the guidance run rate is 425 to 450 million of earnings per quarter.

Gabriel Dechaine: Just a finer point on capital markets, the implication there is that your earnings in that business are going to be above the run rate, which the guidance run rate is CAD 425 to 450 million of earnings per quarter. That may be stale at this point.

Gabriel Dechaine: Just a finer point on capital markets, the implication there is that your earnings in that business are going to be above the run rate, which the guidance run rate is CAD 425 to 450 million of earnings per quarter. That may be stale at this point.

Speaker #8: Isn't that maybe stale at this point? Is that?

Speaker #1: Yeah.

Raj Viswanathan: I mean, you heard Scott talk a lot about the investments we have done, both in product capabilities and people, particularly in the US. I think this quarter, CAD 519 million, I'd probably say CAD 475 to 500 million is probably the business contributing. Some part of it is markets, for sure, that's helping markets remain constructive. This business is ready to capitalize on it.

Raj Viswanathan: I mean, you heard Scott talk a lot about the investments we have done, both in product capabilities and people, particularly in the US. I think this quarter, CAD 519 million, I'd probably say CAD 475 to 500 million is probably the business contributing. Some part of it is markets, for sure, that's helping markets remain constructive. This business is ready to capitalize on it.

Speaker #1: I mean, you heard Scott talk a lot about the investments we've done both in product capabilities and people, particularly in the US. I think this quarter, 519 million I'd probably say 475 to 500 part of it is markets for sure that's is probably the business contributing and some helping.

Speaker #1: Markets remain constructive. This business is ready to

Speaker #1: capitalize on it. Okay,

Gabriel Dechaine: Okay, great. We talk a lot about buybacks these days for obvious reasons. What happens, Scott, if you own 15% of KeyCorp and they decide to participate in the M and A consolidation trend in US regional banking? Would you, I mean, details, of course, if you like the deal or not. Let's say you do like it. Do you want to be diluted or do you want to maintain your position? What's your thought process?

Gabriel Dechaine: Okay, great. We talk a lot about buybacks these days for obvious reasons. What happens, Scott, if you own 15% of KeyCorp and they decide to participate in the M&A consolidation trend in US regional banking? Would you, I mean, details, of course, if you like the deal or not. Let's say you do like it. Do you want to be diluted or do you want to maintain your position? What's your thought process?

Speaker #8: Great. And then we talk a lot about buybacks these days, for obvious reasons. But what happens, Scott, if you own 15% of KeyCorp and they decide to participate in the M&A consolidation trend in U.S. regional banking?

Speaker #8: Would you—I mean, details, of course, if you like the deal or not, let's say you do like it. Do you want to be diluted or do you want to maintain your position?

Speaker #8: What's

Scott Thomson: I think we're really happy with the KeyCorp upstake. Jacqui's sitting on the board now. I think we're getting a lot of good insights into the overall environment. It's contributing now from a dividend perspective on a very attractive basis, given it's in the significant investments bucket. There's not a plan here to increase beyond our current 15%. I think we'll just have to see what KeyCorp does from a strategic perspective and then deal with it at that time. I think we're pretty comfortable with the stake we have, and I'll leave it at that.

Scott Thomson: I think we're really happy with the KeyCorp upstake. Jacqui's sitting on the board now. I think we're getting a lot of good insights into the overall environment. It's contributing now from a dividend perspective on a very attractive basis, given it's in the significant investments bucket. There's not a plan here to increase beyond our current 15%. I think we'll just have to see what KeyCorp does from a strategic perspective and then deal with it at that time. I think we're pretty comfortable with the stake we have, and I'll leave it at that.

Speaker #1: we're really happy with the Keycorp stake. Jackie's sitting on the the kind of the overall

Speaker #1: I think we're getting a lot of good insights into environment. It's contributing now from a dividend perspective on a very attractive basis given it's in the significant investments bucket.

Speaker #1: There's not a plan here to increase beyond our current 15%. And I think we'll just have to see what Keycorp does from a strategic perspective and then deal with it at that time.

Speaker #1: But I think we're pretty comfortable with the stake we have. And I'll leave it at that.

Gabriel Dechaine: All right. Well, thank you.

Gabriel Dechaine: All right. Well, thank you.

Speaker #8: you.

Operator: Your next question comes from the line of Doug Young with Desjardins Capital Markets. Please go ahead.

Operator: Your next question comes from the line of Doug Young with Desjardins Capital Markets. Please go ahead.

Speaker #6: Your next question comes from the line of

Speaker #6: Doug Young with Desjardins Capital Markets. Please go ahead.

Raj Viswanathan: Yeah, good morning. Just something on capital, Raj. Organic capital generation of CET1 generation, 9 basis points. Is this around what we should expect for Scotia, net of dividends? Can you maybe talk a bit about the puts and takes that maybe take you higher over the next few years, if that's something that you think. Scott, can you remind us what the minimum CET1 ratio target for the bank is and what you're comfortable going down to?

Doug Young: Yeah, good morning. Just something on capital, Raj. Organic capital generation of CET1 generation, 9 basis points. Is this around what we should expect for Scotia, net of dividends? Can you maybe talk a bit about the puts and takes that maybe take you higher over the next few years, if that's something that you think. Scott, can you remind us what the minimum CET1 ratio target for the bank is and what you're comfortable going down to?

Speaker #9: Just something on

Speaker #9: capital. Raj, organic capital generation is set one generation nine All right. basis points. Is this around what we should expect for Scotia

Aris Bogdaneris: Sure.

Raj Viswanathan: Sure, Doug, this morning, I think, you know, fee income will always contribute to higher capital generation. We're starting to see improvements in the fee income, as we talked about earlier, so that should help. Nine basis points, I would say, is at the lower end. Frankly, Doug, I think this should progressively improve each quarter. I think 10 to 15 basis points by the time we get to the end of 2026 for the quarterly contribution after dividends is likely the run rate we're looking for. Obviously, if, you know, businesses like wealth and GBM, if they perform well, they just contribute directly to capital generation. We'll see how the year goes in 2026, but fee income is a big component. As far as the capital levels go, you know, I think we'll be around 13%. We'll be north of 13% first couple of quarters.

Raj Viswanathan: Doug, this morning, I think, you know, fee income will always contribute to higher capital generation. We're starting to see improvements in the fee income, as we talked about earlier, so that should help. Nine basis points, I would say, is at the lower end. Frankly, Doug, I think this should progressively improve each quarter. I think 10 to 15 basis points by the time we get to the end of 2026 for the quarterly contribution after dividends is likely the run rate we're looking for. Obviously, if, you know, businesses like wealth and GBM, if they perform well, they just contribute directly to capital generation. We'll see how the year goes in 2026, but fee income is a big component. As far as the capital levels go, you know, I think we'll be around 13%. We'll be north of 13% first couple of quarters.

Speaker #1: Nine basis points, I would say, is at the lower end, frankly. Doug, I think this should progressively improve each Well, thank quarter. I think 10 to 15 basis points by the Yeah, good morning.

Speaker #1: time we get to the end of 2026 for the quarterly contribution after dividends is. Likely the run rate we're looking for. Obviously, if businesses like wealth and GBM, if they perform well, they just contribute directly to capital generation.

Speaker #1: So, we'll see how the year goes in '26. But free income is a big component. And as far as the capital levels go, I think we'll be around 13%.

Speaker #1: We'll be north of 13% first couple of quarters. We'll see how the loan growth evolves. And the X factor, Phil talked a little bit from a PCL perspective.

Raj Viswanathan: We'll see how the loan growth evolves and the X factor. Phil talked a little bit from a PCL perspective. As you know, capital also gets impacted when we see migration. Like even this quarter, you see this CAD 2 billion of RWA on migration, which equates to roughly 5 to 6 basis points of capital. We'll see how that evolves. That could be the only drag I can think of, which potentially is very hard to estimate, but could be small. Capital ratio 13% plus funding, all the organic requirements as we see in the profit plan, I think is a good position to be in to capitalize on other opportunities that may come along.

We'll see how the loan growth evolves and the X factor. Phil talked a little bit from a PCL perspective. As you know, capital also gets impacted when we see migration. Like even this quarter, you see this CAD 2 billion of RWA on migration, which equates to roughly 5 to 6 basis points of capital. We'll see how that evolves. That could be the only drag I can think of, which potentially is very hard to estimate, but could be small. Capital ratio 13%+ funding, all the organic requirements as we see in the profit plan, I think is a good position to be in to capitalize on other opportunities that may come along.

Speaker #1: As you know, capital also gets impacted when we see migration. Like even this quarter, you see this $2 billion of RWA. On migration, which equates to roughly 5 to 6 basis points of capital.

Speaker #1: we'll see how that evolves. That could be the only So drag I can think of, which potentially is very hard to estimate, but could be small.

Speaker #1: But capital ratio 13% plus, funding all the organic requirements as we see in the profit plan, I think is a good position to be into capitalize on other opportunities that may come along.

Scott Thomson: The only thing I'll add is tying it into Ibrahim's question around ROE. I mean, the strategic journey we're on is business mix, right? And that's around increasing fee income, increasing capital velocity. It's really encouraging to see what Aris's plans are next year in terms of insurance, cards, et cetera, driving fees. You see outsized growth from our wealth business. You see outsized growth from a fee perspective from Travis's business. You know, I think this nine basis points is kind of the floor, and from here we will grow, which will contribute to the ROE contribution of the overall bank.

Scott Thomson: The only thing I'll add is tying it into Ebrahim's question around ROE. I mean, the strategic journey we're on is business mix, right? And that's around increasing fee income, increasing capital velocity. It's really encouraging to see what Aris's plans are next year in terms of insurance, cards, et cetera, driving fees. You see outsized growth from our wealth business. You see outsized growth from a fee perspective from Travis's business. You know, I think this nine basis points is kind of the floor, and from here we will grow, which will contribute to the ROE contribution of the overall bank.

Speaker #2: The only thing I'll add is tying it into Ibrahim's question around ROE. I mean, the strategic journey we're on is business mix, right? And that's around increasing the income, increasing capital velocity, it's really encouraging to see what Harris's plans are next year in terms of insurance, cards, etc., driving fees.

Speaker #2: You see outsized growth from our wealth business. You see outsized growth from a fee perspective, from Travis's business. So I think this nine basis points is kind of the floor.

Speaker #2: And from here, we will grow, which will contribute to the ROE contribution of the overall.

Speaker #2: bank.

Speaker #9: Okay. And

Raj Viswanathan: Okay, just second, just back to the guidance. Phil, the PCL, just want to confirm this. Little slow this morning, but PCL guidance that you gave, I assume that's for total. If that's the case, can you break it out between impaired and performing or any sensor? On the international banking, modest earnings growth, I assume that's off the base excluding Colombia for fiscal 2025. Just wanted to confirm those two items.

Doug Young: Okay, just second, just back to the guidance. Phil, the PCL, just want to confirm this. Little slow this morning, but PCL guidance that you gave, I assume that's for total. If that's the case, can you break it out between impaired and performing or any sensor? On the international banking, modest earnings growth, I assume that's off the base excluding Colombia for fiscal 2025. Just wanted to confirm those two items.

Speaker #9: Then just a second, back to the guidance, Phil. The PCL—just want to confirm this a little slow this morning—but PCL guidance total, and if that's the case, can you break it up? That you gave, I assume that's for between impaired and performing, or any sense international banking, modest earnings growth? I assume that's off the basic or excluding Columbia for fiscal '25.

Speaker #9: then just second, just back to the guidance, Phil, the PCL, just want to confirm this a little slow this morning, but PCL guidance total and if that's the case, can you break it up that you gave, I assume that's for between impaired and performing or any sense international banking, modest earnings growth, I assume that's off the basic or?

Speaker #9: And then on the Your next question comes Okay.

Phil Thomas: Yeah. I'll start on PCL. The guidance I gave is on impaired PCL.

Phil Thomas: Yeah. I'll start on PCL. The guidance I gave is on impaired PCL.

Speaker #1: Yeah, I'll start on PCL.

Speaker #1: is on impaired PCL. And as far as

[Analyst]: Okay.

Doug Young: Okay.

Raj Viswanathan: As far as your IBE assumptions, you're right. I think we have disclosed in slide 25 and 26 the foregone income relating to the divested operations as it relates to lines. You know, the bottom line is not big, but there's a lot of changes that happens on revenue, expenses, PCR. You have all the numbers by quarter, and the growth rate of modest growth is after excluding the foregone income in 2025.

Raj Viswanathan: As far as your IBE assumptions, you're right. I think we have disclosed in slide 25 and 26 the foregone income relating to the divested operations as it relates to lines. You know, the bottom line is not big, but there's a lot of changes that happens on revenue, expenses, PCR. You have all the numbers by quarter, and the growth rate of modest growth is after excluding the foregone income in 2025.

Speaker #1: your IB assumptions, you're right. I think we've disclosed in slide 25 and 26, the full

Aris Bogdaneris: Perfect.

Aris Bogdaneris: Perfect. Thank you.

[Analyst]: Thank you.

Operator: Your next question comes from the line of Matthew Lee with Canaccord Genuity. Please go ahead.

Operator: Your next question comes from the line of Matthew Lee with Canaccord Genuity. Please go ahead.

Speaker #6: go ahead. with Canaccord Genuity. Please

[Analyst]: Hi. Morning, guys. Maybe a bigger picture question. You've highlighted in the past the importance of US presence or an expanding US presence for the North American corridor strategy. Now you've sort of mentioned that M and A is not a priority for this year. Does that imply that you can run the corridor strategy with a larger US footprint, maybe through partnerships or maybe through Key, or is the US acquisition still on the wish list, but down the road?

Matthew Lee: Hi. Morning, guys. Maybe a bigger picture question. You've highlighted in the past the importance of US presence or an expanding US presence for the North American corridor strategy. Now you've sort of mentioned that M&A is not a priority for this year. Does that imply that you can run the corridor strategy with a larger US footprint, maybe through partnerships or maybe through KeyCorp, or is the US acquisition still on the wish list, but down the road?

Speaker #10: Hi, morning, guys. Maybe a bigger picture question. You've highlighted in the past the importance of US presence or an expanding US presence for the North American corridor strategy.

Speaker #10: is not a priority for this year. Does that imply that you can run the quarter strategy without any larger US footprint? Maybe through partnerships or But now you've sort of mentioned that M&A maybe through key or is the US acquisition still on the wish list but down the road?

Francisco Aristeguieta: Yeah.

Scott Thomson: Yeah. Let me start, and then Travis, maybe talk to you about what you're building in GBM. As we've always said, the corridor strategy is primarily focused on wealth and our GBM business. We do need to, as I talked about, potential capability enhancement. We do have to have a US offshore booking point for our Latin American wealth clients and our Canadian Wealth clients. That's something that we'll continue to look for. In terms of what Travis is building, it's been an organic build over time, and you're starting to see the results from that. Travis, give a sense of what you're trying to add from a product capability.

Speaker #1: Yes. So let me start, and then Travis, maybe talk to you about what you're building in GBM. But as we've always said, the corridor strategy is primarily focused on wealth and our GBM business.

Scott Thomson: Let me start, and then Travis, maybe talk to you about what you're building in GBM. As we've always said, the corridor strategy is primarily focused on wealth and our GBM business. We do need to, as I talked about, potential capability enhancement. We do have to have a US offshore booking point for our Latin American wealth clients and our Canadian wealth clients. That's something that we'll continue to look for. In terms of what Travis is building, it's been an organic build over time, and you're starting to see the results from that. Travis, give a sense of what you're trying to add from a product capability.

Speaker #1: And we do need to, as I talked about, potential capability enhancement. We do have to have a U.S. offshore booking form for our Latin American wealth clients and our Canadian wealth clients.

Speaker #1: So that's something that we'll continue to look for. But in terms of what Travis is building, it's been an organic build over time, and you're starting to see the results from that.

Speaker #1: And so maybe, Travis, give a sense of what you're trying to add from a product capability.

Travis Machen: Yeah, absolutely. Everything we're doing, it's very intentional. We're trying to build it in America's connected bank really starts on the GTB side on the cash management, and then follows through through our corporate investment banking business and our markets business, trying to help our clients navigate both North and South America. You know, some of the capabilities that we're building and that Francisco's leading on the GTB side are going to be very, very important to providing that client connectivity and that, you know, durable franchise is the word we use a lot of. We're quite excited. We think we can do organically. We have a lot of talent that wants to join the bank, and we've been building organically and been very successful at it.

Travis Machen: Yeah, absolutely. Everything we're doing, it's very intentional. We're trying to build it in America's connected bank really starts on the GTB side on the cash management, and then follows through through our corporate investment banking business and our markets business, trying to help our clients navigate both North and South America. You know, some of the capabilities that we're building and that Francisco's leading on the GTB side are going to be very, very important to providing that client connectivity and that, you know, durable franchise is the word we use a lot of. We're quite excited. We think we can do organically. We have a lot of talent that wants to join the bank, and we've been building organically and been very successful at it.

Speaker #10: Yeah, absolutely. Everything we're doing, it's very intentional, and we're trying to build an America's connected bank. Really starts on the GTB side, on the cash management, and then follows through through our corporate investment banking business and our markets business and trying to help our clients navigate both north and South America.

Speaker #10: And so some of the capabilities that we're building and that Francisco's leading on the GTB side are providing that client going to be very, very important to connectivity and that durable franchise is the word we use a lot.

Speaker #10: And so we're quite excited. We think we can do organically. We have a lot of talent that wants to join the bank, and we've been building organically and been very

Speaker #10: successful at it. And Francisco,

Scott Thomson: Francisco, GTB, we had our pilots this quarter for the first time. This is essentially connecting Canada, US, Mexico, maybe just give the group an.

Scott Thomson: Francisco, GTB, we had our pilots this quarter for the first time. This is essentially connecting Canada, US, Mexico, maybe just give the group an overview of where we are on GTB.

Speaker #2: GTB, I mean, we had our pilots this quarter for the first time, and this is the essentially connecting Canada, US, Mexico, maybe just give the group an

Speaker #2: overview of where we are on GTB. Absolutely.

Francisco Aristeguieta: Overview of where we are on GTB. Absolutely. Thank you, Scott. I think the important element to understand is what makes us different and how can we gain wallet share in the journey. Geographically, North America is the core. The tool is connectivity, like Travis just said. I think the tool of connecting clients through cash management is essential. We are very focused on it. Super excited that in October we rolled out for the very first time our basic cash management capabilities. We have a very clear rollout schedule throughout 2026 to continuously enhance that proposition on a connected basis. We now have a Global Transaction Banking organization for the very first time. We have a consolidated sales effort that allows us to manage centrally our pipeline, onboarding, and rollout of new capabilities, allowing us to prioritize investment and keep track of that investment.

Francisco Aristeguieta: Absolutely. Thank you, Scott. I think the important element to understand is what makes us different and how can we gain wallet share in the journey. Geographically, North America is the core. The tool is connectivity, like Travis just said. I think the tool of connecting clients through cash management is essential. We are very focused on it. Super excited that in October we rolled out for the very first time our basic cash management capabilities. We have a very clear rollout schedule throughout 2026 to continuously enhance that proposition on a connected basis. We now have a Global Transaction Banking organization for the very first time. We have a consolidated sales effort that allows us to manage centrally our pipeline, onboarding, and rollout of new capabilities, allowing us to prioritize investment and keep track of that investment.

Speaker #3: Thank you, Scott. I think the important element to understand is what makes us different and how can we gain what is share in the journey.

Speaker #3: And geographically, North America is the core. The tool is connectivity, like Travis just said. I think the tool of connecting clients through cash management is essential.

Speaker #3: So, we’re very focused on it. Super excited that in October, we rolled out for the very first time our basic cash management capabilities. We have a very clear rollout schedule throughout 2026 to continuously enhance that proposition.

Speaker #3: On a global transaction banking organization for the connected basis. So we now have a very first time, and we have a consolidated sales effort that allows us to manage centrally our pipeline and onboarding and rollout of new capabilities.

Speaker #3: Allowing us to prioritize investment and keep track of that investment. So it is really about how and I think Travis has done an amazing job in bringing leaders that understand how you connect global clients.

Francisco Aristeguieta: It is really about how effectively do we cover global clients. I think Travis has done an amazing job in bringing leaders that understand how you connect global clients and using the right tools in terms of bringing a differentiated value proposition. As we see in the core countries in which we operate other global banks leaving that footprint, we now stand in a very important position to capture share as we connect the countries on behalf of our clients.

It is really about how effectively do we cover global clients. I think Travis has done an amazing job in bringing leaders that understand how you connect global clients and using the right tools in terms of bringing a differentiated value proposition. As we see in the core countries in which we operate other global banks leaving that footprint, we now stand in a very important position to capture share as we connect the countries on behalf of our clients.

Speaker #3: And using the right tools, in terms of bringing a differentiated value proposition. And as we see in the core countries in which we operate, other global banks leaving that footprint, we now stand in a very important position to capture share as we connect the countries on behalf of our

Speaker #3: clients. That's helpful.

[Analyst]: That's helpful. What I'm hearing is that you don't necessarily need a traditional PNC or commercial bank to kind of do your strategy.

Matthew Lee: That's helpful. What I'm hearing is that you don't necessarily need a traditional PNC or Commercial Bank to kind of do your strategy.

Speaker #9: So what I'm hearing is that you don't necessarily need a

Speaker #1: Now we have so organic many opportunities in but that's front of us , going to the be area focus .

Speaker #2: Okay, that's helpful. Thanks. I'll pass it on.

Scott Thomson: I think right now we have so many organic opportunities in front of us that that's going to be the focus area.

Scott Thomson: I think right now we have so many organic opportunities in front of us that that's going to be the focus area.

Speaker #3: Your next question comes from the line of Paul Holden with CIBC . Please go ahead .

[Analyst]: Okay, that's helpful. Thanks. I'll pass the line.

Matthew Lee: Okay, that's helpful. Thanks. I'll pass the line.

Operator: Your next question comes from the line of Paul Holden with CIBC. Please go ahead.

Operator: Your next question comes from the line of Paul Holden with CIBC. Please go ahead.

Speaker #4: morning . Yeah . Thank you . Good First question is for Francisco . So just going back to the guidance of 2026 growth low single modest modest growth , I digits or think that's bit lower probably a little than what was originally in the would have been I plan , which think I think high single digits for this year .

[Analyst]: Yeah, thank you. Good morning. First question is for Francisco. Just going back to the 2026 growth guidance of low single digits or modest, modest growth. I think that's probably a little bit lower than what was originally in the plan, which would have been, I think, high single digits for this year. Maybe talk about some of the factors that are contributing to it, assuming it's macro, but maybe we can understand better just the intended pivot to balance sheet growth. I know that was an important part of the plan for 2026, and if that's still part of the plan.

Paul Holden: Yeah, thank you. Good morning. First question is for Francisco. Just going back to the 2026 growth guidance of low single digits or modest, modest growth. I think that's probably a little bit lower than what was originally in the plan, which would have been, I think, high single digits for this year. Maybe talk about some of the factors that are contributing to it, assuming it's macro, but maybe we can understand better just the intended pivot to balance sheet growth. I know that was an important part of the plan for 2026, and if that's still part of the plan.

Speaker #4: So maybe talk about some factors that of the contributing to it , assuming it's are macro , but maybe can understand we the just the intended pivot to balance that sheet growth .

Speaker #4: Was that part of the plan I know for 2026? And if that's still part of the plan.

Speaker #5: think what's important Thank you . I understand is , to is where are we and where we are today today is at a position of strength .

Francisco Aristeguieta: Thank you. I think what's important to understand is where are we today? Where we are today is at a position of strength. We have now completed the full regionalization of all the business lines and support functions, and that is allowing us to centrally drive the right investment and the right returns at scale. I can't stress enough the importance of the WD and the transaction. It is allowing us to simplify our operating model and operate at scale in all the countries in which we operate today. That is a massive advantage for us going forward. I think the element to understand is that as we pivot to growth, what you're going to see is that GVM, for example, that has been in a very deliberate effort to deselect low returning loans and clients. We have completed that exercise in 2025.

Francisco Aristeguieta: Thank you. I think what's important to understand is where are we today? Where we are today is at a position of strength. We have now completed the full regionalization of all the business lines and support functions, and that is allowing us to centrally drive the right investment and the right returns at scale. I can't stress enough the importance of the IB and the transaction. It is allowing us to simplify our operating model and operate at scale in all the countries in which we operate today. That is a massive advantage for us going forward. I think the element to understand is that as we pivot to growth, what you're going to see is that GBM, for example, that has been in a very deliberate effort to deselect low returning loans and clients. We have completed that exercise in 2025.

Speaker #5: We have now completed the full regionalization of all the business and support lines functions , and that is allowing us to centrally right drive the investment and the right returns at scale .

Speaker #5: I can't stress enough the importance WD and the transaction . It is allowing us to our simplify operating model of the operate and at scale all the in countries in which we in today operate .

Speaker #5: And that is a massive advantage for us going forward . I think the understand is that pivot element to to growth , as we what you're see going to is that example , that has been GBM , for in a very deliberate effort to low de-select returning loans and clients .

Speaker #5: We have completed that exercise in 2025. So, you're going to see loan growth in GBM on the digit side of things for the first time in the last couple of years.

Francisco Aristeguieta: You're going to see loan growth in GBM on the double-digit side of things for the first time in the last couple of years. We're now returning ROEs of north of 2% in GBM for the first time in a long time. This is all in alignment with Travis's organization in a highly connected, deliberate effort to drive multi-country client penetration and GTB, and that's going to perform strongly in 2026. We just onboarded a new leader, for example, for capital markets, and that's bringing new capabilities that we didn't have. Again, accretive to capturing wallet share with clients that we didn't participate in most of those activities before.

You're going to see loan growth in GBM on the double-digit side of things for the first time in the last couple of years. We're now returning ROEs of north of 2% in GBM for the first time in a long time. This is all in alignment with Travis's organization in a highly connected, deliberate effort to drive multi-country client penetration and GTB, and that's going to perform strongly in 2026. We just onboarded a new leader, for example, for capital markets, and that's bringing new capabilities that we didn't have. Again, accretive to capturing wallet share with clients that we didn't participate in most of those activities before.

Speaker #5: now We're returning rawwas of north of 2% in GBM for the first time in a long time . And this is all in alignment with Travis's organization in a highly connected , deliberate effort to drive clients multi-country penetration and GTP .

Speaker #5: And that's going to perform strongly in 2026 . We just onboarded a new leader , for example , for capital markets , and that's bringing new capabilities that we didn't have .

Speaker #5: Again , accretive to capturing share with clients that we didn't wallet participate in . Most of those activities . When you look at commercial before banking , we now have regionalized the commercial bank and changed the strategy to a cache first strategy , meaning if we don't have cash management , we will not give you a loan .

Francisco Aristeguieta: When you look at commercial banking, we now have regionalized the commercial bank and changed the strategy to a cash first strategy, meaning if we don't have cash management, we will not give you a loan, as simple as that. That's a massive change in our strategy because it's going to drive higher returns, better penetration across the wallet of those clients, and drive consistent performance going forward. On retail, as Scott mentioned in his opening remarks, we're tremendously excited because for the first time we now have rolled out multi-country a common value proposition for our most important clients, being affluent and emerging affluent, under the singular common brand. That's a major, major step in delivering the strategy that we set out to achieve in 2023.

When you look at Commercial Banking, we now have regionalized the Commercial Bank and changed the strategy to a cash first strategy, meaning if we don't have cash management, we will not give you a loan, as simple as that. That's a massive change in our strategy because it's going to drive higher returns, better penetration across the wallet of those clients, and drive consistent performance going forward. On retail, as Scott mentioned in his opening remarks, we're tremendously excited because for the first time we now have rolled out multi-country a common value proposition for our most important clients, being affluent and emerging affluent, under the singular common brand. That's a major, major step in delivering the strategy that we set out to achieve in 2023.

Speaker #5: As simple as that . And massive that's a change in our strategy because it's going to drive higher returns better , better penetration wallet of across the those clients .

Speaker #5: And drive consistent performance forward . And retail going Scott mentioned . in his opening As remarks , tremendously excited we're because for the first time , we now have out rolled multi-country , a common value proposition for important clients .

Speaker #5: Our most affluent and affluent emerging under the singular common brand. And that's a major, major step in delivering the strategy that we set out to achieve in 2023.

Speaker #5: So when you put all that together , you're going to have mid-single digit growth in 2026 , trying to offset still increasing pcls like Phil , and mentioned taxes .

Francisco Aristeguieta: When you put all that together, you're going to have mid single digit PTPP growth in 2026 trying to offset still increasing PCLs like Phil mentioned, and higher taxes. 2026 is a strong year from the performance point of view, but we have some offsets to do. This is also in the midst of a geographic GDP growth which is still very modest. I mean, you're seeing Mexico barely breaking the one, the positive growth GDP for 2026. Still, Chile, Peru, and Colombia are not benefiting from political change resulting from elections that we will see in 2016. It's a strong year within very much the strategy and timeline that we set out to achieve in 2023.

When you put all that together, you're going to have mid single digit PTPP growth in 2026 trying to offset still increasing PCLs like Phil mentioned, and higher taxes. 2026 is a strong year from the performance point of view, but we have some offsets to do. This is also in the midst of a geographic GDP growth which is still very modest. I mean, you're seeing Mexico barely breaking the one, the positive growth GDP for 2026. Still, Chile, Peru, and Colombia are not benefiting from political change resulting from elections that we will see in 2016. It's a strong year within very much the strategy and timeline that we set out to achieve in 2023.

Speaker #5: So 2026 is a strong year from the performance But we point of view . have some offsets to do . is And this the midst of of a geographic GDP growth , which is still modest .

Speaker #5: very I mean , you're seeing Mexico barely breaking the one positive growth GDP for 2026 and still Chile , Peru and Colombia not benefiting from change political resulting from elections that we will see in 26 .

Speaker #5: So it's a strong year within very much the strategy and timeline that we set out to achieve in 2023 .

Speaker #4: Got it . Okay . That's helpful . Thanks for that . And then a question for travelers . And I guess it's almost kind along similar of , similar vein because , you know , we've talked about a number of drivers I think for for your business , Travis , maybe you sort could highlight of I don't know if it's top , top three or whatever the right is .

[Analyst]: All right, okay, that's helpful. Thanks for that. A question for Travis, and I guess it's almost kind of along a similar vein because, you know, we've talked about a number of drivers. I think for your business, Travis, maybe you could highlight sort of, I don't know if it's top three or whatever the right number is. What would you say are the top drivers that are going to contribute to that revenue and earnings growth in 2026? In other words, what should we be tracking for success in 2026?

Paul Holden: All right, okay, that's helpful. Thanks for that. A question for Travis, and I guess it's almost kind of along a similar vein because, you know, we've talked about a number of drivers. I think for your business, Travis, maybe you could highlight sort of, I don't know if it's top three or whatever the right number is. What would you say are the top drivers that are going to contribute to that revenue and earnings growth in 2026? In other words, what should we be tracking for success in 2026?

Speaker #4: number you say are the What would top that are drivers going to going contribute to that revenue and earnings growth in 2026 ? In other words , what what should we be tracking for for success in 26 ?

Speaker #1: Sure . Listen . Excellent question . I'm pretty proud . If what we did you look at in I think 2025 and some of the will continue , you know , we clearly had significant net interest margin expansion .

Travis Machen: Sure, listen, excellent question. I'm pretty proud if you look at what we did in 2025, and some of the drivers were, I think, will continue. You know, we clearly had significant net interest margin expansion, and it's just absolute relentless focus on our balance sheet, thinking about our capital velocity, understanding how we price our deposits, driving more core operating deposits, and looking at our loans. We haven't changed the risk profile of our lending book, but I think we've been highly selective on our loan portfolio. You've seen our loans are actually down, and our ROE is up significantly, and we've still been able to maintain the fee growth and the net interest margin expansion despite the loans coming down. I think that just highlights a little bit about the discipline that we're having on our balance sheet.

Travis Machen: Sure, listen, excellent question. I'm pretty proud if you look at what we did in 2025, and some of the drivers were, I think, will continue. You know, we clearly had significant net interest margin expansion, and it's just absolute relentless focus on our balance sheet, thinking about our capital velocity, understanding how we price our deposits, driving more core operating deposits, and looking at our loans. We haven't changed the risk profile of our lending book, but I think we've been highly selective on our loan portfolio. You've seen our loans are actually down, and our ROE is up significantly, and we've still been able to maintain the fee growth and the net interest margin expansion despite the loans coming down. I think that just highlights a little bit about the discipline that we're having on our balance sheet.

Speaker #1: And that's just absolute relentless focus on our balance sheet , thinking about our capital velocity , understanding how we price our deposits , driving more core operating deposits , and looking at our haven't changed loans .

Speaker #1: We our risk profile of our lending book , but I think we've been highly selective on on our loan portfolio . You've seen our loans are actually and our ROE is up significantly , and we've still been able to maintain the fee down growth and the the net margin interest expansion despite the loans down .

Speaker #1: So I coming think little bit discipline that we're having on our balance sheet . And I think strategic from a about the standpoint , just low hanging there's a lot of fruit .

Speaker #1: I mean , when we just think about the exactly what said , the global Francisco connectivity is franchise is incredibly powerful , unlike any bank seen .

Travis Machen: I think from a strategic standpoint, there's a lot of low-hanging fruit. I mean, when we just think about exactly what Francisco said, the global connectivity of this franchise is incredibly powerful, unlike any bank I've ever seen. The ability to connect clients from Canada to the US to Latin America, there's no other bank that can replicate what we're trying to do. We see tremendous opportunities, we see relatively low penetration rates of some of our clients, and we see a lot of cross-border activity. I think as we continue to build that connectivity and continue to build the capabilities on the products, on the services, and on the advisory side, I think you'll see our fee income and non-interest income continue to grow. On the market side, I think we remain incredibly disciplined.

I think from a strategic standpoint, there's a lot of low-hanging fruit. I mean, when we just think about exactly what Francisco said, the global connectivity of this franchise is incredibly powerful, unlike any bank I've ever seen. The ability to connect clients from Canada to the US to Latin America, there's no other bank that can replicate what we're trying to do. We see tremendous opportunities, we see relatively low penetration rates of some of our clients, and we see a lot of cross-border activity. I think as we continue to build that connectivity and continue to build the capabilities on the products, on the services, and on the advisory side, I think you'll see our fee income and non-interest income continue to grow. On the market side, I think we remain incredibly disciplined.

Speaker #1: I've ever The ability to connect clients from Canada to US to Latin America . There's no other the bank that that can replicate what we're trying to do , and we see tremendous opportunities .

Speaker #1: We see , we see relatively low penetration rates of some of our clients , and we see a lot cross-border So I think activity .

Speaker #1: as we as we continue to , to build that of connectivity continue to build the capabilities on the products and and services and on the advisory side , I think you'll see our fee income and our noninterest income continue to grow on the market side .

Speaker #1: I think we incredibly disciplined . We clearly have some beta and alpha in this quarter . We've seen highly constructive You're markets . seeing spreads all time seeing the capital markets incredibly constructive .

Travis Machen: We clearly have some beta and alpha in this quarter. You've seen highly constructive markets. You're seeing spreads, all time tights. You're seeing the capital markets incredibly constructive. You're seeing a lot of our clients access to capital markets and we're playing a leading role. I think as we upscale, you know, our coverage and our advisory capabilities, I think you'll see more growth in those, in those line items too. I look around and we've been pushing on every single driver in the GBM business. I think that this beat is reflective of every single one of those things hitting well. We're going to hopefully continue that momentum, and our pipelines remain healthy right now.

We clearly have some beta and alpha in this quarter. You've seen highly constructive markets. You're seeing spreads, all time tights. You're seeing the capital markets incredibly constructive. You're seeing a lot of our clients access to capital markets and we're playing a leading role. I think as we upscale, you know, our coverage and our advisory capabilities, I think you'll see more growth in those, in those line items too. I look around and we've been pushing on every single driver in the GBM business. I think that this beat is reflective of every single one of those things hitting well. We're going to hopefully continue that momentum, and our pipelines remain healthy right now.

Speaker #1: You're

Speaker #1: You're seeing a lot of our clients access to capital markets . And we're playing a leading role . And I think as we upscale , you know , our coverage and our advisory capabilities , I think you'll tight .

Speaker #1: those line items too . And I look so around and we've been we've been pushing on single driver in the GBM business . I think that this is a reflective of every single one of those things hitting well .

Speaker #4: leave it there . you

Speaker #4: .

Speaker #3: question next comes from the line of Mendonca with Mario TD securities . Please go ahead .

[Analyst]: Okay, I'll leave it there. Thank you.

Paul Holden: Okay, I'll leave it there. Thank you.

Operator: Your next question comes from the line of Mario Mendonca with TD Securities. Please go ahead.

Operator: Your next question comes from the line of Mario Mendonca with TD Securities. Please go ahead.

Speaker #6: Good morning . Can we start on the deposit strategy Maybe just in Canada first ? specifically , speak to the the sort of run off of these commercial deposits that we saw this quarter or not commercial , I'm sorry , term saw deposits that we this quarter and the growth in retail maybe just describe what what you experienced in the quarter your and what outlook is on the domestic domestic deposit front .

[Analyst]: Good morning. Can we start on the deposit strategy first, maybe just in Canada.

Mario Mendonca: Good morning. Can we start on the deposit strategy first, maybe just in Canada. Specifically speak to the sort of runoff of these commercial deposits that we saw this quarter, or not commercial, I'm sorry, term deposits that we saw this quarter, and the growth in retail, maybe just describe what you experienced in the quarter and what your outlook is on the domestic deposit front.

Scott Thomson: Specifically speak to the sort of runoff.

[Analyst]: Of these commercial deposits that we saw this quarter, or not commercial, I'm sorry, term deposits that we saw this quarter, and the growth in retail, maybe just describe what you experienced in the quarter and what your outlook is on the domestic deposit front.

Speaker #1: Sure .

Speaker #7: you for the question . Before before Thank into that question , just to remind everyone on the strategy in the Canadian bank , and it's threefold .

Aris Bogdaneris: Sure. Thank you for the question. Before I dig into that question, just to remind everyone on the strategy in the Canadian bank, it's threefold. It's driving the primacy of our clients' depth, that's the first, and that continues. The second one is the business mix, changing the business mix and changing the operating model, improving them both, and that feeds into the deposit question. Third is a very intentional deployment of capital and marginal costs in our business, and that's what we continue to do. Now, getting back to the deposit question, since investor day we've added CAD 22 billion in deposits and CAD 15 billion in mutual funds. We've become a money-in bank. This is very different from the way this bank operated in the past.

Aris Bogdaneris: Sure. Thank you for the question. Before I dig into that question, just to remind everyone on the strategy in the Canadian Bank, it's threefold. It's driving the primacy of our clients' depth, that's the first, and that continues. The second one is the business mix, changing the business mix and changing the operating model, improving them both, and that feeds into the deposit question. Third is a very intentional deployment of capital and marginal costs in our business, and that's what we continue to do. Now, getting back to the deposit question, since investor day we've added CAD 22 billion in deposits and CAD 15 billion in mutual funds. We've become a money-in bank. This is very different from the way this bank operated in the past.

Speaker #7: It's the driving , the primacy of our clients depth . That's the first . And that's continues . The second one is the business mix changing the business mix and changing the operating model , improving them both .

Speaker #7: And into the that feeds deposit third is And question . a very intentional deployment of capital and marginal costs in our that's what we continue to do .

Speaker #7: getting Now the back to deposit question , since Investor Day , we've added 22 billion in deposits 15 billion in and mutual funds .

Speaker #7: So we've become a money bank . This in is very different from the way this bank operated in the past . More importantly , as rates have come down and people have gotten out of term , we've been managing to capture our that in day to day savings and investment fund business .

Aris Bogdaneris: More importantly, as rates have come down and people have gotten out of term, we've been managing to capture that in our day-to-day savings and investment fund business. We've had a record amount of sales in mutual funds in the quarter in the Canadian bank. This idea of getting primacy is driving across the whole value chain, whether it's scorecard improvements in the branches, focus on payroll, and focus on very deliberate pricing and personalization strategies to drive more deposits from our existing base. Also, what we call competitive steal is up 13% quarter on quarter as we get more clients from outside into the bank. All this is driving what you saw in the fourth quarter: improved NIM in our deposit book, and this continued focus on deposits is what we count on doing quarter after quarter.

More importantly, as rates have come down and people have gotten out of term, we've been managing to capture that in our day-to-day savings and investment fund business. We've had a record amount of sales in mutual funds in the quarter in the Canadian Bank. This idea of getting primacy is driving across the whole value chain, whether it's scorecard improvements in the branches, focus on payroll, and focus on very deliberate pricing and personalization strategies to drive more deposits from our existing base. Also, what we call competitive steal is up 13% quarter-on-quarter as we get more clients from outside into the bank. All this is driving what you saw in the Q4: improved NIM in our deposit book, and this continued focus on deposits is what we count on doing quarter-after-quarter.

Speaker #7: And we've had record amount of sales in mutual funds in the quarter in the Canadian bank . And this idea of getting primacy is driving across the whole value chain , it's improvements in the scorecard branches focus on payroll and focus on very deliberate pricing and personalization strategies to drive more deposits from our existing base , but also what we call competitive steel that is up 13% quarter on quarter as we get more clients from outside into the bank .

Speaker #7: this So all driving what you saw in the fourth quarter , Nim improved in our deposit book . And this continued focus on deposits is what we count on doing .

Speaker #7: Quarter after quarter, we’re seeing it. We're in Q4. And every time, we're also linking it to the day-to-day savings growth you saw in the quarter.

Speaker #7: I up in the retail side , 7% on day to day and 17 or sorry , 14% on the savings . So it's materializing .

Aris Bogdaneris: We're seeing it every quarter, also linking it to the day-to-day savings growth you saw in the quarter. I think we're up in the retail side, 7% on day-to-day and 14% on the savings. It's materializing, we're seeing it in the numbers. This will continue quarter on quarter. I think it's also important to talk about how we're getting longer-term relationships through our investment fund. Sales in the branch is something that we were historically not very strong at, but now we're seeing record levels. I would pass it on to Jacqui, who is working very closely with wealth in the Canadian bank in creating this connection, in getting the right banker in front of the client to ensure we get the wealth of the client. Yeah, thanks, Aris.

We're seeing it every quarter, also linking it to the day-to-day savings growth you saw in the quarter. I think we're up in the retail side, 7% on day-to-day and 14% on the savings. It's materializing, we're seeing it in the numbers. This will continue quarter-on-quarter. I think it's also important to talk about how we're getting longer-term relationships through our investment fund. Sales in the branch is something that we were historically not very strong at, but now we're seeing record levels. I would pass it on to Jacqui, who is working very closely with wealth in the Canadian Bank in creating this connection, in getting the right banker in front of the client to ensure we get the wealth of the client. So Jacqui.

Speaker #7: We're seeing it in the numbers . This will continue quarter on quarter . But I think it's also important to talk about how we're getting longer term relationships to our investment fund sales in the branches , something that we .

Speaker #7: Were historically not very strong at. But now we're seeing record levels. And I would pass it on to Jackie, who is working very closely.

Speaker #7: Wealth in the Canadian bank in creating this connection and getting the right banker in front of the ensure client to we wealth of get the the client .

Speaker #7: So , Jackie .

Speaker #8: Yeah, thanks, Eric. I actually think that's the best marker of our strategy execution as a net sales growth momentum that we've built together between Canadian Wealth and Banking.

Jacqui Allard: Yeah, thanks, Aris. I actually think that the best marker of our strategy execution is the net sales growth momentum that we have built together between wealth and Canadian Banking. Obviously, markets have been really constructive for us both in the quarter and the full year. Together we saw CAD 4.8 billion in net sales in the quarter between retail and wealth. To put it in perspective, that was a 16-quarter high for us. It's also a record quarter for, and I'd say also this isn't a Q4 story alone. This has been a consistent trend for us for the whole year. Our whole year net sales, I think Scott Thomson said, is up CAD 11.5 billion vs the prior year, while CAD 7 billion of that improvement came in Canadian retail channels alone.

Aris Bogdaneris: I actually think that the best marker of our strategy execution is the net sales growth momentum that we have built together between wealth and Canadian banking. Obviously, markets have been really constructive for us both in the quarter and the full year. Together we saw CAD 4.8 billion in net sales in the quarter between retail and wealth. To put it in perspective, that was a 16-quarter high for us. It's also a record quarter for, and I'd say also this isn't a Q4 story alone. This has been a consistent trend for us for the whole year. Our whole year net sales, I think Scott Thomson said, is up CAD 11.5 billion versus the prior year, while CAD 7 billion of that improvement came in Canadian retail channels alone.

Speaker #8: Obviously , markets have been really constructive for us both in the quarter and the full year , but together we saw $4.8 billion in net sales in the quarter between retail and wealth .

Speaker #8: To put it in perspective , that was a 16 quarter high for us . It's also a record quarter for and I'd say also , this isn't for story alone .

Speaker #8: a quarter This has been a consistent trend for us for the whole year . Our whole year net sales . I think , Scott , as you said , is up 11.5 billion versus the Well , prior year .

Speaker #8: 7 billion of that improvement came in Canadian retail channels alone . You know , just to on to pile to to Eric's we've point , since seen Investor Day , 850 basis point improvement in our retail client base for investments , which is quite remarkable .

Aris Bogdaneris: Just to pile onto Aris's point, since investor day we've seen an 850 basis point improvement in our retail client base for investments, which is quite remarkable. The rest of the growth is coming from our wealth businesses, whole year net sales in Canadian wealth management is up 54%. International wealth is up 76% from the prior year. I'd say that we would expect this momentum to carry into F2026.

Just to pile onto Aris's point, since investor day we've seen an 850 basis point improvement in our retail client base for investments, which is quite remarkable. The rest of the growth is coming from our wealth businesses, whole year net sales in Canadian Wealth Management is up 54%. International Wealth is up 76% from the prior year. I'd say that we would expect this momentum to carry into F2026.

Speaker #8: The rest of the growth is coming from our wealth businesses. Full-year net sales in Canadian wealth management are up 54%. International wealth is up 76% from the prior year.

Speaker #8: And I'd say that we would expect this momentum to carry into f 26 .

Speaker #6: we could move All right . If over to mortgages again , domestic help me , could you understand the that origination dynamics this quarter , like 30% up in the GTA was , it down sort of meaningfully last quarter .

Phil Thomas: All right, if we could move over.

Mario Mendonca: All right, if we could move over. To mortgages again, domestic, could you help me understand that the origination dynamics this quarter, like 30% up in the GTA? It was down sort of meaningfully last quarter. Obviously, something changed in mortgage originations in the GTA. Also, help me understand the extent to which mortgage growth is emerging in the broker channel vs, say, Scotia's advisors or the branch channel. Those are the two mortgage questions.

[Analyst]: To mortgages again, domestic, could you help me understand that the origination dynamics this quarter, like 30% up in the GTA? It was down sort of meaningfully last quarter. Obviously, something changed in mortgage originations in the GTA. Also, help me understand the extent to which mortgage growth is emerging in the broker channel versus, say, Scotia's advisors or the branch channel. Those are the two mortgage questions.

Speaker #6: So obviously something changed mortgage in originations in the GTA . And then also help me understand that the extent to which mortgage growth is emerging in the broker channel versus , Scotia's say , advisors or the branch channel , those are the two mortgage questions I have .

Speaker #7: just a So bit of background on mortgages in the So we quarter . saw a bit of in the softening the GTA and GVA , especially in the condo market .

Aris Bogdaneris: Just a bit of background on mortgages in the quarter. We saw a bit of softening in the GTA and the GVA, especially in the condo market. That said, mortgage applications quarter on quarter were up 13% as lower home prices in Toronto and Vancouver are bringing buyers back, as well as lower rates. We're seeing a little bit of a pickup in demand, and we should see that continuing in 2026 as affordability improves. There's a very active refi switching market going on given the big increase in maturities that we will see next year, as we saw this year. Our growth is being boosted, of course, by the work we've done on renewals. We've been very strong. Our portfolio renewal rate in the fourth quarter was over 90%. We've invested a lot in virtual advisors who are driving renewal volume.

Aris Bogdaneris: Just a bit of background on mortgages in the quarter. We saw a bit of softening in the GTA and the GVA, especially in the condo market. That said, mortgage applications quarter-on-quarter were up 13% as lower home prices in Toronto and Vancouver are bringing buyers back, as well as lower rates. We're seeing a little bit of a pickup in demand, and we should see that continuing in 2026 as affordability improves. There's a very active refi switching market going on given the big increase in maturities that we will see next year, as we saw this year. Our growth is being boosted, of course, by the work we've done on renewals. We've been very strong. Our portfolio renewal rate in the Q4 was over 90%. We've invested a lot in virtual advisors who are driving renewal volume.

Speaker #7: But that said , mortgage applications quarter on quarter are up lower 13% as home prices in Toronto and Vancouver are bringing buyers back , as well as lower we're seeing rates .

Speaker #7: bit of a a little pickup demand , in should So see that more continuing in the 2026 as affordability improves and there's a very active refi switching market on going , given the big increase in maturities that we will see As we year .

Speaker #7: saw this year . Now the our growth is being boosted . Of course , by the work we've done on renewals . We've been very strong .

Speaker #7: portfolio Our renewal rate in the fourth quarter 90% . We've was over invested a lot in virtual advisors who are driving renewal volume .

Speaker #7: that's So been very strong . We're also seeing good front book margins in our mortgage business in the fourth quarter . And of course , Mortgage Plus , which we've about talked today in our broker channel , 99% of all originations are coming with a mortgage bundle .

Aris Bogdaneris: That's been very strong. We're also seeing good front book margins in our mortgage business in the fourth quarter. Of course, Mortgage+, which we've talked about today in our broker channel, 99% of all originations are coming with a mortgage bundle. In terms of the origination to your question, we're getting roughly 60% in our broker channel. We're getting 30%, 30%, 35% in our HFA channel, and the rest through our branches. Total originations in the quarter in Toronto, in the Toronto region, have grown, I think. What's the percentage? I don't know off the top of my head, but have grown from CAD 3.5 billion to 4.5 billion year on year. As I said, as the lower home prices are kicking in and affordability, they're starting to see a pickup there in terms of originations in the GTA.

That's been very strong. We're also seeing good front book margins in our mortgage business in the Q4. Of course, Mortgage+, which we've talked about today in our broker channel, 99% of all originations are coming with a mortgage bundle. In terms of the origination to your question, we're getting roughly 60% in our broker channel. We're getting 30%, 30%, 35% in our HFA channel, and the rest through our branches. Total originations in the quarter in Toronto, in the Toronto region, have grown, I think. What's the percentage? I don't know off the top of my head, but have grown from CAD 3.5 to 4.5 billion year-on-year. As I said, as the lower home prices are kicking in and affordability, they're starting to see a pickup there in terms of originations in the GTA.

Speaker #7: terms of In the your originations , question we're getting roughly 60% in our broker channel . We're getting 30 , 30 , 35% in our .

Speaker #7: HFA the rest channel . And through our branches . Total originations in the quarter Toronto in , in the Toronto region have grown , I what's the think percentage ?

Speaker #7: I don't know , off the top of my head , but have grown from 3.5 billion to 4.5 billion year on year . So it's it's , as I said , as the lower home prices are in and affordability , they're starting to see a pick there in terms of originations in GTA the .

Speaker #6: right . All Thank you

Speaker #6: .

Speaker #3: The next question comes from the line of Darko Mihelic with RBC Capital Markets. Please go ahead.

[Analyst]: All right, thank you.

Mario Mendonca: All right, thank you.

Operator: Your next question comes from the line of Darko Mihelic with RBC Capital Markets. Please go ahead.

Operator: Your next question comes from the line of Darko Mihelic with RBC Capital Markets. Please go ahead.

Speaker #9: Hi . Thank you . morning . My Good question is also for Iris . And I'm just trying to pin down a better understanding of your your comment that fee revenue will also be stronger in 2026 .

Raj Viswanathan: Hi.

Darko Mihelic: Hi. Thank you. Good morning. My question is also for Aris, and I'm just trying to pin down a better understanding of your comment that fee revenue will also be stronger in 2026. What I'm specifically after is, I'm trying to understand private equity and how that's helped you. This is the Q2 this year where you mentioned that private equity gains have somehow benefited the Canadian business. I'm wondering if you can maybe just size that, like annually. How much are you getting from private equity gains, where it's coming from? A little bit unclear to me, and what your expectation is for 2026 on that front.

[Analyst]: Thank you. Good morning. My question is also for Aris, and I'm just trying to pin down a better understanding of your comment that fee revenue will also be stronger in 2026. What I'm specifically after is, I'm trying to understand private equity and how that's helped you. This is the second quarter this year where you mentioned that private equity gains have somehow benefited the Canadian business. I'm wondering if you can maybe just size that, like annually. How much are you getting from private equity gains, where it's coming from? A little bit unclear to me, and what your expectation is for 2026 on that front.

Speaker #9: And what I'm specifically after is I'm trying to understand private equity and how that's helped you . This is the second quarter this year where you mentioned that private equity gains somehow benefited the Canadian business .

Speaker #9: So, I'm wondering if you can maybe just size that, like annually. How much are you getting from private equity gains, and where is it coming from?

Speaker #9: A little bit unclear to me. And what are your expectations for 2026 on that front?

Speaker #10: Darko , I'll start on private equity and

Speaker #10: then to pass it on Iris on the . Hey , I'll be fee . quick . Private equity earlier this Q1 year in over $30 million .

Raj Viswanathan: Hey, Darko, I'll start on private equity and then pass it on to Aris on the fee. I'll be quick. Private equity earlier this year in Q1 was over CAD 30 million. I think it was CAD 33 million, if I remember right. This quarter is, like, you know, a little over CAD 10 million. It is a reason when you look at year over year, which is the comment I made on private equity gains helping us with the non-interest revenue. Private equity is something that's hard to forecast. It comes down to our folks who manage that. It's a small portfolio, it's not very big. It's primarily through the Roynat business that is part of the Canadian banking portfolio.

Raj Viswanathan: Hey, Darko, I'll start on private equity and then pass it on to Aris on the fee. I'll be quick. Private equity earlier this year in Q1 was over CAD 30 million. I think it was CAD 33 million, if I remember right. This quarter is, like, you know, a little over CAD 10 million. It is a reason when you look at year-over-year, which is the comment I made on private equity gains helping us with the non-interest revenue. Private equity is something that's hard to forecast. It comes down to our folks who manage that. It's a small portfolio, it's not very big. It's primarily through the Roynat business that is part of the Canadian Banking portfolio.

Speaker #10: I think $33 million . If I it was remember right . And this quarter is like , you know , a little over $10 million .

Speaker #10: So, it is a reason when you look at the year, which is the comment I made on private equity gains helping us with noninterest revenue, and private equity is something that's hard to forecast.

Speaker #10: Darko . It comes down to our folks who manage that . It's a small portfolio . It's not very big . It's primarily through the business that is Rinat part of the Canadian banking portfolio .

Speaker #10: And there from time to time , if they believe that the investments that they made and sometimes many years back when realized the full they potential value , or they end up going public , we realize gains .

Raj Viswanathan: There from time to time, if they believe that the investments that they made, and sometimes many years back, when they realize the full potential value or they end up going public, we realize gains. It's not something that we look forward to forecasting. It does create some noise when you look at non-interest revenue when you look at it quarter over quarter, year over year. You know, would it be another $50 million year? Unlikely, I would say in 2026. It's also very hard to predict. If the valuations are there, they will make the decision to take the gains. Eric, do you want to talk about fees?

There from time to time, if they believe that the investments that they made, and sometimes many years back, when they realize the full potential value or they end up going public, we realize gains. It's not something that we look forward to forecasting. It does create some noise when you look at non-interest revenue when you look at it quarter-over-quarter, year-over-year. You know, would it be another CAD 50 million year? Unlikely, I would say in 2026. It's also very hard to predict. If the valuations are there, they will make the decision to take the gains.

Speaker #10: So it's not something that we look forward to forecasting , but it does noise . When you create look at some noninterest revenue , when you quarter look at it over quarter , year over year .

Speaker #10: So , you know , be would it another 50 million year ? Unlikely . I would say in 2026 . But then it's also very hard to predict if the valuations are They will make the there .

Speaker #10: decision to take the gains . Eric , do you want to talk ?

Speaker #7: On fees , as I mentioned Sure . earlier , there's four important fee components in the Canadian bank that we'll see acceleration in F26 mutual fund fees as we continue to drive mutual fund the sales in We're starting branches .

Scott Thomson: Aris, do you want to talk about fees?

Aris Bogdaneris: Sure. On fees, as I mentioned earlier, there are four important fee components in the Canadian bank that will see acceleration in F2026: mutual fund fees, as we continue to drive mutual fund sales in the branches. We're starting to really build up momentum there, you see it quarter on quarter. I think card fees will also increase as we now reposition the card portfolio to more premium cards. We're seeing the spend per account go up, and the actual value of our card business increase as the premium clients take up a greater proportion. Third is insurance. Of course, insurance is an important part of our business, linked not only to our lending business, but also standalone. We've invested and continue to invest in our insurance business. We'll start to see some pickup there. Finally, cash management in commercial and small business.

Aris Bogdaneris: Sure. On fees, as I mentioned earlier, there are four important fee components in the Canadian Bank that will see acceleration in F2026: mutual fund fees, as we continue to drive mutual fund sales in the branches. We're starting to really build up momentum there, you see it quarter-on-quarter. I think card fees will also increase as we now reposition the card portfolio to more premium cards. We're seeing the spend per account go up, and the actual value of our card business increase as the premium clients take up a greater proportion. Third is insurance. Of course, insurance is an important part of our business, linked not only to our lending business, but also standalone. We've invested and continue to invest in our insurance business. We'll start to see some pickup there. Finally, cash management in commercial and small business.

Speaker #7: really build to up There . momentum . it quarter on quarter . I think card fees will also increase as we now reposition the card portfolio to more premium cards .

Speaker #7: seeing the We're spend per account go up and the actual value of our card business increase as the premium clients take greater up a proportion .

Speaker #7: Third is insurance . Of course , insurance is important an part of our business , linked not only to our lending business , but also standalone .

Speaker #7: We've invested and continue to invest in our insurance business . We'll start to see some pickup there and then finally , cash management in commercial and small business .

Speaker #7: That's another growing component where we're investing a lot of money and effort and sales people in to the field drive transaction banking in Canada to strengthen primacy .

Aris Bogdaneris: That's another growing component where we're investing a lot of money and effort, and sales people in the field to drive transaction banking in Canada to strengthen primacy. Between these four drivers, we're going to see close to double-digit, if not double-digit, fee growth in the Canadian bank.

That's another growing component where we're investing a lot of money and effort, and sales people in the field to drive transaction banking in Canada to strengthen primacy. Between these four drivers, we're going to see close to double-digit, if not double-digit, fee growth in the Canadian Bank.

Speaker #7: So between these four drivers , we're going to see double digit , if not double digit fee growth in the Canadian banking year

Speaker #9: That's very helpful .

Speaker #9: Thank you . Iris , I appreciate for the purposes that . And I'm going to of this call , try and . keep my last question very , very simple and straightforward .

[Analyst]: That's very helpful. Thank you, Aris, I appreciate that. For the purposes of this call, I'm going to try and keep my last question very, very simple and straightforward. I think it's aimed at Travis, but maybe Phil, you can also speak to this as well. I'm getting a lot of questions on private credit, and essentially what we're looking for is we really want to be able to measure Scotia's sort of exposure to private credit relative to others that actually have a call report. I wonder if Travis, maybe you can speak. I'm assuming most of this is coming from the capital markets business. I wonder if you can tell us sort of the on balance sheet exposure to private credit and maybe even off balance sheet or like non-committed lines.

Darko Mihelic: That's very helpful. Thank you, Aris, I appreciate that. For the purposes of this call, I'm going to try and keep my last question very, very simple and straightforward. I think it's aimed at Travis, but maybe Phil, you can also speak to this as well. I'm getting a lot of questions on private credit, and essentially what we're looking for is we really want to be able to measure Scotia's sort of exposure to private credit relative to others that actually have a call report. I wonder if Travis, maybe you can speak. I'm assuming most of this is coming from the capital markets business. I wonder if you can tell us sort of the on balance sheet exposure to private credit and maybe even off balance sheet or like non-committed lines.

Speaker #9: I think it's aimed at Travis , but maybe Phil , you can also speak to this as getting a lot of questions on private credit and essentially what we're looking for is we really want to be able to measure Scotia sort of exposure to private credit relative to others that actually have a call report .

Speaker #9: So I wonder, Travis, if maybe you can speak. I'm assuming most of this is coming from a capital markets business.

Speaker #9: I you can tell us wonder if sort of the on balance sheet exposure to private credit maybe and off balance sheet or like non lines committed then and Phil , the pertinent question might be , you know , what losses do look like for this kind of stress business in a test .

[Analyst]: Phil, the pertinent question might be, you know, what do losses look like for this kind of business in a stress test?

Phil, the pertinent question might be, you know, what do losses look like for this kind of business in a stress test?

Speaker #9: .

Speaker #7: Yeah .

Speaker #1: Darko , this is Hey Travis . Listen . Excellent question . You know , know , I you totally I you know , there's a broader market questions around private And credit .

Travis Machen: Darko, this is Travis. Listen, excellent question. You know, I, you know, totally there's some broader market questions around private credit, and they're very understandable if you sort of step back and think about it. There's been a massive growth in non-bank financials. A lot of estimates in the US that that's nearly 2/3 of all assets. This is really a result of Dodd-Frank, and you've seen the move. It's sort of hard to be a bank and not have some sort of connectivity to the non-bank financial, you know, market. If you step back and just sort of think about what we do in the non-bank financials, you know, we have roughly CAD 31 billion of loans outstanding.

Travis Machen: Darko, this is Travis. Listen, excellent question. You know, I, you know, totally there's some broader market questions around private credit, and they're very understandable if you sort of step back and think about it. There's been a massive growth in non-bank financials. A lot of estimates in the US that that's nearly 2/3 of all assets. This is really a result of Dodd-Frank, and you've seen the move. It's sort of hard to be a bank and not have some sort of connectivity to the non-bank financial, you know, market. If you step back and just sort of think about what we do in the non-bank financials, you know, we have roughly CAD 31 billion of loans outstanding.

Speaker #1: they're very they're understandable . You know , if you sort of step back and think about it , there's been massive a growth in non-bank financials lot of and a in the US .

Speaker #1: That's that's nearly two thirds of all assets . This is really a result of Dodd-Frank . And you've seen the move . And so it's sort of hard to be a bank and not have some sort of connectivity to the non-bank financial , you know But , market .

Speaker #1: step back and just sort of think about what we do in non-bank financials , you know , we have roughly $31 billion of loans outstanding .

Speaker #1: If you just unpack little that a bit . Darko , around half of that is subscription finance the other . And then half would be in the private credit .

Travis Machen: If you just unpack that a little bit, Darko, around half of that is subscription finance, and then the other half would be in the private credit, I'm sorry, about half that is in the private credit market. If you break that half down, half of that would be subscription finance, and the other half would be in the CLO business. If you look at what we do in those businesses, those are highly rated, where our effective average rating is between A and A plus, or double A. We are not really, we are not participating, I can tell you, in the equity or the lower quality tranches, if you will. We feel like we're participating in a very high end A plus rated tranche, part of the capital structure within this portfolio, and we're quite comfortable with it.

If you just unpack that a little bit, Darko, around half of that is subscription finance, and then the other half would be in the private credit, I'm sorry, about half that is in the private credit market. If you break that half down, half of that would be subscription finance, and the other half would be in the CLO business. If you look at what we do in those businesses, those are highly rated, where our effective average rating is between A and A+, or AA. We are not really, we are not participating, I can tell you, in the equity or the lower quality tranches, if you will. We feel like we're participating in a very high end A+ rated tranche, part of the capital structure within this portfolio, and we're quite comfortable with it.

Speaker #1: I'm about half sorry; of that, half is private in the credit market. And if you break that half down, a half of that would be subscription finance.

Speaker #1: And the would be in the other half business . But if you look at what we do in those those are businesses , highly rated .

Speaker #1: We're we're effective our average rating is between A and A plus . Our AA . So not we're really we are not participating .

Speaker #1: I can tell you in the the equity or the the lower the lower quality tranches will . And we feel like we're so we , participating in a very high end , A+ rated part of the capital structure within this portfolio .

Speaker #1: And we're we're quite comfortable with it . And we've hired some real experts both on the risk side and on the on banking side the .

Travis Machen: We've hired some real experts both on the risk side and on the banking side. Happy to take any more questions you have on that topic. Phil, we do frequent stress tests we can talk about, I'm happy to go through that or Phil can on the stress testing side and maybe I'll.

We've hired some real experts both on the risk side and on the banking side. Happy to take any more questions you have on that topic. Phil, we do frequent stress tests we can talk about, I'm happy to go through that or Phil can on the stress testing side

Speaker #1: happy to take So questions you have on any more that . Or and Phil , we do . We do frequent stress tests .

Speaker #1: We can talk about . I'm go through that . Or happy to Phil can on the stress testing side .

Speaker #11: I'll just And maybe jump in quickly . Darko , we've been along for the Travis ride with team on this , on his and we've journey , been obviously , you know , we've been staffing up the the risk team as well .

Phil Thomas: Maybe I'll just jump in quickly. Darko, we've been along for the ride with Travis and his team on this journey, and we've been, obviously, we've been staffing up the risk team as well. Just in terms of stress testing, we do run rigorous stress tests, and I can tell you even in extreme cases where all exposures are downgraded to non-investment grade, projected losses in this book would remain a fraction of the net revenue that this business generates, which really underscores the strength of our structures and the underwriting that we have underway.

Phil Thomas: Just jump in quickly. Darko, we've been along for the ride with Travis and his team on this journey, and we've been, obviously, we've been staffing up the risk team as well. Just in terms of stress testing, we do run rigorous stress tests, and I can tell you even in extreme cases where all exposures are downgraded to non-investment grade, projected losses in this book would remain a fraction of the net revenue that this business generates, which really underscores the strength of our structures and the underwriting that we have underway.

Speaker #11: And just in terms of of stress testing , we do run a rigorous tests . And I stress can tell you , even in extreme cases where all exposures are downgraded to non-investment grade , projected losses in would remain fraction of the a net this book revenue that this business which generates , really underscores the strength of our structures and the underwriting that we have underway .

Speaker #9: Thank you . That's very helpful . Travis , just question . a quick If 31 billion , if is private credit , what's the other half ?

[Analyst]: Thank you, that's very helpful. Travis, just a quick question. If $31 billion, if half of that is private credit, what's the other half?

Darko Mihelic: Thank you, that's very helpful. Travis, just a quick question. If CAD 31 billion, if half of that is private credit, what's the other half?

Speaker #1: The other half just would be traditional , you know , insurance companies , pension funds and some other holding companies . Again , highly rated all all .

Travis Machen: The other half would be just traditional, you know, insurance companies, pension funds, and some other holding companies. Again, all highly rated.

Travis Machen: The other half would be just traditional, you know, insurance companies, pension funds, and some other holding companies. Again, all highly rated.

Speaker #9: Okay . Thank you .

Speaker #3: You next question comes from the line of Jill Shay with UBS . Please go ahead .

[Analyst]: Okay, thank you.

Darko Mihelic: Okay, thank you.

Operator: Your next question comes from the line of Jill Shea with UBS. Please go ahead. Thanks. Good morning. Perhaps just piggybacking on Mario's earlier question on deposits. You already addressed some of the nice progress you're seeing on your deposit strategies, but perhaps just tying that to your net interest margin outlook, like when we look at the year over year margin that's improved with lower funding costs. Just curious if there's any more room to go with funding costs continuing to come down or a favorable mix shift away from term.

Operator: Your next question comes from the line of Jill Shea with UBS. Please go ahead.

Speaker #12: Thanks . Good just morning piggybacking on Mario's question on deposits . Perhaps already addressed some of the nice you're seeing on your deposit strategies , but perhaps just tying that to your net interest margin outlook , like when we over progress look at the year margin , that's improved with lower funding costs .

Jill Shea: Thanks. Good morning. Perhaps just piggybacking on Mario's earlier question on deposits. You already addressed some of the nice progress you're seeing on your deposit strategies, but perhaps just tying that to your net interest margin outlook, like when we look at the year-over-year margin that's improved with lower funding costs. Just curious if there's any more room to go with funding costs continuing to come down or a favorable mix shift away from term.

Speaker #12: just curious if there's any more room to go with funding costs continuing to come down or , you know , a mix shift favorable away from term ?

Speaker #10: I can Sure . start . The all bank level . this Jill . Absolutely . Deposits are a big component of where we see the the net interest expansion coming from , margin from the apart repricing that we have is going to happen in the fixed rate mortgages that I mentioned .

Aris Bogdaneris: Sure.

Raj Viswanathan: Sure. I can start this at the all bank level, Jill. Absolutely. Deposits are a big component of where we see the net interest margin expansion coming from. Apart from the repricing that we have is going to happen in the fixed rate mortgages that I mentioned, and we've disclosed it in the 2026 year. Both are going to contribute 240 basis points. NIM this quarter expanded 4 basis points. We see that continuously expanding each quarter at more modest levels, to be completely clear. It's not going to come from the funding cost benefit that we saw in 2025, which is our wholesale funding cost coming down, because we're not forecasting any more rate cuts in Canada. Obviously, if it happens, it's going to help us, but it's primarily going to come from the Canadian Bank. It's going to come from our GTB operations.

Raj Viswanathan: I can start this at the all bank level, Jill. Absolutely. Deposits are a big component of where we see the net interest margin expansion coming from. Apart from the repricing that we have is going to happen in the fixed rate mortgages that I mentioned, and we've disclosed it in the 2026 year. Both are going to contribute 240 basis points. NIM this quarter expanded 4 basis points. We see that continuously expanding each quarter at more modest levels, to be completely clear. It's not going to come from the funding cost benefit that we saw in 2025, which is our wholesale funding cost coming down, because we're not forecasting any more rate cuts in Canada. Obviously, if it happens, it's going to help us, but it's primarily going to come from the Canadian bank. It's going to come from our GTB operations.

Speaker #10: And disclosed we've it in the in the 2026 year . So both are going to contribute 240 basis points Nim this quarter expanded four basis points .

Speaker #10: We see that continuously expanding each at quarter more modest levels to completely clear . be So it's not going to come from the funding cost benefit that we saw in 2025 , wholesale which is our funding costs coming down , because we're not forecasting any more rate cuts in Canada .

Speaker #10: Obviously , if it happens , it's going to help but it's us , primarily going to come from the Canadian bank . It's going to come from our GTB operations like this quarter , started we disclosing Nim for Gbm's purpose because has contributed to GTB Gbm's Nim expanding 14 basis points in one quarter , it's worth a little over two basis points all for the bank , continue .

Raj Viswanathan: Like, this quarter we've started disclosing GBM's NIM for purpose because GTB has contributed to GBM's NIM expanding 14 basis points in one quarter. It's worth a little over two basis points for the all bank, and that's going to continue. We talked a lot on this call about the investments we're making on the GTB front. It's going to come from good quality deposit growth in the Canadian bank, margin expansion on the mortgage book, and from the GTB deposits. You should see this happening incrementally each quarter. Like I said, modestly, not four basis points each quarter to be totally candid with you, Jill, but I think you should see expansion happen throughout 2026.

Like, this quarter we've started disclosing GBM's NIM for purpose because GTB has contributed to GBM's NIM expanding 14 basis points in one quarter. It's worth a little over two basis points for the all bank, and that's going to continue. We talked a lot on this call about the investments we're making on the GTB front. It's going to come from good quality deposit growth in the Canadian Bank, margin expansion on the mortgage book, and from the GTB deposits. You should see this happening incrementally each quarter. Like I said, modestly, not 4 basis points each quarter to be totally candid with you, Jill, but I think you should see expansion happen throughout 2026.

Speaker #10: and We that's going to talked a lot on this call about the investments we're making on the front . GTB So it's going to come from good deposit quality the growth in Canadian bank .

Speaker #10: expansion on the Margin book mortgage and from the GTB deposits . You should see this happening incrementally . Each quarter . Like I said , modestly , not four basis points each quarter to be totally candid with you , Jill , but I think you should see expansion happen throughout 2026 .

Speaker #12: Okay . Very helpful . Thank you .

Speaker #3: And there are no further questions on the line. I would now like to turn the meeting over to Rajagopal Viswanathan.

Operator: Okay. Very helpful. Thank you. There are no further questions on the line. I would now like to turn the meeting over to Raj Viswanathan.

Jill Shea: Okay. Very helpful. Thank you.

Operator: There are no further questions on the line. I would now like to turn the meeting over to Raj Viswanathan.

Speaker #10: On behalf of the entire management team, I want to thank everyone for participating in our call today. We look forward to speaking to you again at our Q1 call in February.

Raj Viswanathan: On behalf of the entire management team, I want to thank everyone for participating in our call today. We look forward to speaking to you again at our Q1 call in February. This concludes our fourth quarter results call. Have a great holiday season, and a great day.

Raj Viswanathan: On behalf of the entire management team, I want to thank everyone for participating in our call today. We look forward to speaking to you again at our Q1 call in February. This concludes our Q4 results call. Have a great holiday season, and a great day.

Speaker #10: This our fourth quarter results call . Have a great holiday season and concludes a great day .

Speaker #3: Well , ladies and gentlemen , this does conclude today's conference call . Thank you for your participation . And you may now disconnect .

Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.