Scotiabank Gets Approval to Expand Share Buyback to 40 Million Shares

Scotiabank has received approval from the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions to raise the ceiling on its current share repurchase program to 40 million common shares from 15 million. The amended limit takes effect Oct. 6, giving the bank substantially more room to buy back stock for cancellation under the same normal course issuer bid.

At 40 million shares, the new maximum represents about 3.25% of the 1,231,433,660 common shares that were outstanding on March 24, 2026. Scotiabank said no other terms of the bid were changed. By Aug. 31, the bank had purchased 13,044,315 shares under the current authorization, or roughly 87% of the initial 15 million-share ceiling.

Raising the ceiling adds 25 million shares to the total authorization. Scotiabank’s Oct. 2 announcement does not commit it to purchase the full 40 million. The bank can stop earlier, and the number of shares actually bought will depend on market conditions and the terms of its repurchase plan.

The amended bid keeps the existing purchase mechanics

Scotiabank can make purchases on the open market through the TSX, the New York Stock Exchange and other designated exchanges or alternative Canadian trading systems. Open-market purchases are made at the prevailing market price. The bank may also use other methods allowed by the TSX and securities laws, including private agreements or specific repurchase programs carried out under regulatory exemption orders. Purchases under an exemption order would generally be made at a discount to the prevailing market price.

Daily purchases on the TSX remain capped at 1,114,002 shares, apart from permitted block purchase exceptions. That ceiling is based on average daily trading volume of 4,456,008 shares during the six calendar months before the current bid began. Every share purchased under the bid will be cancelled, reducing the number of common shares outstanding rather than holding the repurchased stock in treasury.

An automatic repurchase plan established on April 7 will also be amended to reflect the higher maximum. Under that plan, Scotia Capital Inc. can periodically buy shares within predetermined parameters. Scotiabank has not committed to a fixed purchase schedule or price, so the enlarged authorization gives management flexibility rather than a timetable for spending a defined amount of cash.

Scotiabank had nearly exhausted the original 2026 limit

When the current program began in April, Scotiabank was authorized to repurchase as many as 15 million common shares between April 7, 2026 and April 6, 2027. At the time, that authorization represented about 1.2% of the same March 24 share count. The bank said the program would provide flexibility to manage its capital position and offset dilution from option exercises.

That April bid itself followed a larger program from the prior year. Scotiabank had purchased all 20 million shares authorized under its 2025 normal course issuer bid by April 1, 2026, at an average price of C$90.47 per share. The total amount spent on those repurchases was C$1.809 billion. The bank then ended that program early and moved to the new 15 million-share authorization.

Repurchases continued at a rapid pace during fiscal 2026. In its third-quarter results for the period ended July 31, Scotiabank reported buying back 8.6 million shares during the quarter. It also said C$6.3 billion of capital had been returned to shareholders through dividends and share repurchases during the first nine months of the fiscal year. By the end of August, the disclosed total purchased under the current bid had climbed above 13 million shares.

With the original ceiling nearly used, the larger authorization lets Scotiabank continue repurchasing shares without establishing a separate normal course issuer bid. Based on the Aug. 31 disclosure alone, the bank had fewer than 2 million shares of capacity left under the former 15 million-share limit at that date. The amendment lifts the overall cap to 40 million while keeping the April 6, 2027 end date in place.

Capital levels remain central to how much Scotiabank can buy

Because Scotiabank is a federally regulated bank, its ability to repurchase shares is subject to prudential oversight. OSFI’s guidance on share purchases and redemptions says regulated institutions are expected to maintain adequate capital and liquidity and should ensure that planned purchases do not interfere with required regulatory or internal capital and liquidity targets.

Scotiabank entered the fourth fiscal quarter with a Common Equity Tier 1 capital ratio of 13.1% as of July 31, down 20 basis points from the prior quarter. The bank attributed the decline to growth in risk-weighted assets, the recall of a synthetic risk-transfer securitization and share repurchases, partly offset by earnings after dividends. Scotiabank also said its CET1, Tier 1, total capital and leverage ratios remained well above OSFI minimums at the end of the quarter.

Those capital figures help explain why regulatory approval matters even though the buyback is conducted through ordinary market purchases. A higher authorization expands Scotiabank’s capital-return capacity, but actual repurchases still have to fit within the bank’s capital position, liquidity needs and market conditions. The Oct. 2 approval establishes the maximum number of shares the bank can buy under the current bid, not an obligation to reach that number.

Unless Scotiabank terminates the bid earlier, the amended authorization will remain in force until the bank reaches the 40 million-share maximum or the program reaches April 6, 2027. Scotiabank’s next quarterly results are scheduled for Dec. 2, providing the next scheduled financial update before the buyback’s April deadline.