RBC Sees Improving Credit Outlook for The Bank of Nova Scotia (BNS), Raises Price Objective

The Bank of Nova Scotia (NYSE:BNS) is included among the 14 Value Stocks to Buy with High Dividend Yields.

On February 25, RBC Capital raised its price objective on The Bank of Nova Scotia (NYSE:BNS) to C$106 from C$97. It reiterated a Sector Perform rating on the shares. The analyst said the bank’s Q1 results came in stronger than expected, with credit performance exceeding forecasts, particularly in the Canadian Banking segment. RBC also said it continues to expect lower provisions for credit losses in the second half of 2026.

On February 24, Bank of Nova Scotia, known as Scotiabank, reported solid fiscal Q1 results. Adjusted earnings per share rose to C$2.05 for the three months ended January 31, 2026, compared with C$1.76 in the same period last year. The improvement reflected earnings growth across all of the bank’s business segments. The bank also said it remains confident in its ability to meet its medium-term targets.

Total revenue increased about 3% year over year to C$9.65 billion, up from C$9.37 billion a year earlier. The growth came from stronger performance across multiple areas of the business.CEO Scott Thomson said the bank entered 2026 with solid momentum. He highlighted earnings growth across all business lines during the quarter. He also pointed to the Canadian Banking segment, which delivered another quarter of margin expansion, stronger fee income growth, and positive operating leverage.

The Canadian Banking division reported earnings of C$960 million, up 5% from the prior year. The increase was supported by strong revenue performance and continued expense discipline. The International Banking segment also delivered higher earnings. It reported C$737 million in earnings, representing a 7% increase from the same period last year. The growth was supported by margin expansion and favorable operating leverage.

The Global Wealth Management segment posted one of the strongest gains. Adjusted earnings rose 18% to C$491 million. The increase was driven by higher mutual fund fees, stronger brokerage revenue, and improved net interest income.

The Bank of Nova Scotia (NYSE:BNS) operates as a global financial services provider. It offers personal, commercial, corporate, and investment banking services. Its business segments include Canadian Banking, International Banking, Global Wealth Management, Global Banking and Markets, and Other.

While we acknowledge the potential of BNS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.