Scotiabank and BMO reported their fiscal Q2 2026 results on the same day, both beat estimates, and both posted meaningfully higher net income than a year earlier. Set side by side, though, the two quarters reveal a genuine structural difference: one bank is pursuing a strategic divestiture the other is not, and their return-on-equity targets — both real, both stated — are not the same number.
Data as of fiscal Q2 2026 (quarter ended April 30, 2026), both reported May 27, 2026.
This post is a comparison, not a recommendation to buy, hold, or avoid either bank.
Scotiabank (BNS)
Scotiabank reported net income of $2,632 million, up 30% year-over-year, with adjusted EPS of $2.02, ahead of the $1.94 consensus estimate. Adjusted return on equity (ROE) came in at 13.2%, up from 10.4% a year earlier. The bank raised its quarterly dividend by $0.04 to $1.14 per share.
The standout segment was Canadian Banking, where earnings rose 53% year-over-year — the clear driver of the quarter's overall growth.
BMO
BMO reported net income of $2,630 million (reported basis), up 34% year-over-year, with adjusted EPS of $3.67, up 40% year-over-year. Adjusted ROE was 13.5%, up 370 basis points year-over-year. BMO's own target is 15% ROE by fiscal 2027 — a real, stated benchmark that differs from Scotiabank's own 14%+ target for the same fiscal year, a genuine and directly comparable difference in stated ambition between the two banks.
BMO raised its quarterly dividend to $1.71 per share. Wealth Management earnings rose 39%, with assets under management (AUM) up 30%.
The divestiture that separates the two quarters
BMO announced the sale of its Transportation and Vendor Finance businesses to Stonepeak, with an expected pre-tax charge of approximately $1.1 billion on close. This is a structural portfolio decision Scotiabank is not making this quarter — BMO is actively reshaping which businesses sit inside the bank, while Scotiabank's quarter is a story of organic growth concentrated in its existing Canadian Banking segment.
Reading the two side by side
| Metric | Scotiabank (BNS) | BMO |
|---|---|---|
| Net income growth (YoY) | +30% ($2,632M) | +34% ($2,630M) |
| Adjusted ROE (this quarter) | 13.2% | 13.5% |
| Stated forward ROE target | 14%+ (FY2027) | 15% (FY2027) |
Both banks posted similar net income growth rates and similar current-quarter ROE levels, but BMO's stated forward ROE target is a full percentage point higher, and BMO is simultaneously divesting a non-core business segment while Scotiabank's growth is concentrated organically within Canadian Banking, which grew 53% on its own this quarter.
What each bank's quarter suggests about its current strategy
Scotiabank's quarter reads as concentrated organic strength — one segment, Canadian Banking, doing the majority of the work, alongside broad-based ROE improvement. BMO's quarter reads as active portfolio management layered on top of strong underlying growth — a bank reshaping its business mix (via the Stonepeak sale) while also posting the higher net income growth rate and the higher stated ROE ambition of the two.
Which approach is more relevant to a given investor's research depends on whether the priority is a bank executing well within its existing structure, or a bank actively restructuring toward a stated, higher ROE target — a comparison of strategy and execution, not a ranking of which bank is objectively superior.
Comparing the two directly
The Dividend Compare Engine lets you place BNS and BMO side by side with your own yield, dividend growth, and position-size assumptions to see how the comparison plays out for your specific holdings.
Takeaway
Scotiabank and BMO both delivered strong fiscal Q2 2026 quarters — 30% and 34% net income growth respectively, both beating estimates — but the underlying stories differ. Scotiabank's growth was concentrated in a 53% jump in Canadian Banking earnings; BMO posted the higher net income and ROE growth of the two while simultaneously divesting its Transportation and Vendor Finance businesses and stating a full percentage point higher ROE target for fiscal 2027. The due-diligence question worth tracking is whether BMO's divestiture proceeds cleanly and whether its higher ROE target materializes on schedule, against Scotiabank's continued reliance on Canadian Banking's current growth rate holding up.
> This post analyzes publicly available financial information for educational purposes. It is not investment advice and does not recommend buying, selling, or holding any security. Figures reflect the most recently available quarterly report as of the date noted above and may not reflect current conditions.
--- *This content is for informational purposes only and does not constitute licensed financial advice. Tax rules and contribution limits are accurate as of 2026 and may change. Consult a qualified financial advisor before making investment decisions.*
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