Mortgage originations within the Better Toronto Space fell to $3.3 billion in Q2, down from $4.4 billion within the earlier quarter. Within the Better Vancouver Space, originations declined to $1.7 billion from $2.1 billion.
On an annualized foundation, common mortgage volumes had been nonetheless up 6%.
“Whereas mortgage development is slowing, our Mortgage+ resolution, a serious driver of shopper primacy, accounted for 88% of our originations this quarter, and mortgage renewal retention charges stay excessive,” mentioned President and CEO Scott Thomson.
Mortgage+ is Scotiabank’s bundled providing that mixes a mortgage with different merchandise like chequing accounts or investments, making it simpler for purchasers to handle their funds in a single place.
Waiting for the second half of the 12 months, Thomson expressed optimism that mortgage development will start to get well. “Now we have seen softness, we’ve got seen uncertainty,” he mentioned. “However as we glance to the again half of this 12 months and into ’26, I do assume there’s a second right here the place you’re going to see an inflection level with a bit of bit extra mortgage development.”
Fastened-rate mortgage renewals to spike in 2026-27
Scotiabank’s residential mortgage ebook totals $305 billion, with 77% uninsured and 67% fixed-rate. A big chunk of that’s up for renewal in 2026 and 2027, with $90.2 billion and $100.7 billion maturing in these years, respectively.
In each the GTA and GVA, the financial institution’s uninsured loan-to-value (LTV) ratios on new originations declined barely, coming in at 60% in Q2—down from 62% in Toronto and 61% in Vancouver within the earlier quarter.
Delinquencies secure, however PCLs climb
Mortgage delinquencies additionally held regular at 0.24% in Q2—unchanged from the prior quarter and up barely from 0.19% a 12 months in the past. That stability was mirrored within the financial institution’s impaired mortgage provisions, which had been comparatively flat.
Nevertheless, Scotiabank’s complete provision for credit score losses rose to $1.4 billion in Q2, up from $1.16 billion in Q1. The rise was pushed largely by Canadian Banking, the place PCLs rose to $805 million, up from $428 million a 12 months earlier and $538 million in Q1.
Scotiabank Chief Danger Officer Phil Thomas mentioned the financial institution’s $1.8 billion construct in provisions since 2022 displays the financial institution’s extra cautious stance within the present unsure macroeconomic backdrop.
Scotiabank earnings spotlights
Q2 internet earnings (adjusted): $2 billion (+2%)
Earnings per share: $1.52 (+14%)
| Q2 2024 | Q1 2025 | Q2 2025 | |
|---|---|---|---|
| Residential mortgage portfolio | $289B | $304B | $305B |
| Proportion of mortgage portfolio uninsured | 75% | 77% | 77% |
| Avg. loan-to-value (LTV) of complete portfolio | 51% | 52% | 52% |
| Portfolio combine: share with variable charges | 33% | 31% | 33% |
| 90+ days overdue (mortgage portfolio) | 0.19% | 0.24% | 0.24% |
| Canadian banking internet curiosity margin (NIM) | 2.56% | 2.32% | 2.27% |
| Complete provisions for credit score losses | $1B | $1.16B | $1.4B |
| CET1 Ratio | 13.2% | 12.9% | 13.2% |
Different key highlights
On Scotia’s publicity to the apartment market
- Phil Thomas addressed issues round rising dangers within the apartment growth area, notably in mild of headlines about patrons strolling away from pre-construction offers.
- “Condos signify 20% of our mortgage portfolio,” he mentioned. “However… we’ve been very deliberate specializing in Tier 1 builders with expertise by way of down cycles in Tier 1 cities. So, we don’t really feel we’re as uncovered doubtlessly to among the headlines that we see there.”
- He added that apartment builders account for simply 6% of the financial institution’s business actual property portfolio in Canada, and that roughly 80% of that publicity is funding grade.
- “It’s not certainly one of my high issues proper now.”
On the impression of falling charges
- Scotiabank mentioned a 25-basis-point minimize in short-term charges would enhance internet curiosity earnings by roughly $60 million over 12 months, assuming a static stability sheet. The financial institution cautioned that deposit pricing and buyer behaviour might impression that estimate.
On business actual property
- Scotiabank’s business ebook, which accounts for 8.2% of complete loans and acceptances, declined 3% within the quarter, “reflecting slower enterprise actions on account of financial uncertainty, larger building prices and nonetheless comparatively excessive borrowing prices,” the financial institution mentioned.
- The portfolio remained concentrated in residential and industrial segments. Workplace publicity accounts for simply 9% of the CRE complete—roughly $5.5 billion—with about 80% of that publicity rated funding grade.
Observe: Transcripts are supplied as-is from the businesses and/or third-party sources, and their accuracy can’t be 100% assured.
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Final modified: Might 27, 2025
