Scotiabank kicked off Canadian bank earnings season with a first-quarter beat, as investors also weighed U.S. bank commentary and fresh retail results from Home Depot.
BNN Bloomberg spoke with Brian Belski, CEO and chief investment officer at Humilis Investment Strategies, who said investors should be more selective within Canadian banks, dismissed AI fears around major U.S. lenders and pointed to opportunities in specific consumer and financial names.
Key Takeaways
- Scotiabank’s quarter reflects disciplined capital management across the Big Six, but investors may need to be more selective as bank stocks no longer move in unison.
- RBC and National Bank may offer stronger tactical positioning over the next 12 to 18 months due to management stability and regional growth exposure.
- AI disruption fears surrounding large U.S. banks such as JPMorgan are overstated, with major lenders positioned to benefit from efficiency gains and potentially lighter regulation.
- Home Depot’s earnings beat should be viewed in the context of seasonal spending patterns and fiscal calendar shifts, with consistency rather than rapid growth driving its appeal.
- U.S. consumers remain price-conscious but resilient, supporting discount and value-oriented retailers while select mid-cap growth names such as Shake Shack may benefit from demographic trends.
Read the full transcript below:
ANDREW: Bank earnings season ramping up, and a lot of our big lenders are trading at or near record highs. Scotiabank turned in its first-quarter report, beating expectations with higher profits across its business segments. Let’s get some more from Brian Belski, CEO and chief investment officer at Humilis Investment Strategies. Brian, great to see you and thanks very much indeed.
BRIAN: Thanks for having us, Andrew. And good morning, Canada.
ANDREW: What jumped out for you with the Scotiabank numbers? Anything interesting?
BRIAN: Well, I think the Big Six banks have done a wonderful job in terms of managing their capital. We’ve said for years and years that Canadian banks are the most excellent stewards of capital in the world. Last year, meaning 2025, was a year where the banks were starting to use some of the excess reserves that they were really building through much of 2023 and 2024. And so the benefits of that are really following through into this first fiscal quarter for 2026 for the banks.
We worry that the Canadian economy might be slowing a little bit faster than the U.S. economy. We worry that Canadian banks, in general, have had such great performance from a fundamental perspective that they’ve spent a lot of money with respect to divisions as well. But Scotia, in particular, is going to follow and set the trend for what we believe we’re going to see for the rest of the banks — meaning good capital markets performance and volumes during the quarter because of the volatility.
Wealth management, especially at Scotia, they’ve kind of righted some of the branding ships and some of the issues that they’ve had there. So I do think that Scotia is kind of setting the pace in terms of some of the other banks. But by and large, the banks in general, we think, in our view at Humilis, are going to be much more selective versus last year. They all kind of went up in unison. So you’re going to have to increase your stock-picking chores within the Big Six banks.
ANDREW: But Scotiabank would be one of the bank stocks you favour, Brian?
BRIAN: Well, we own Scotiabank in one of the eight model portfolios that we run for clients, both Canada and the United States. We own it in our North American dividend growth portfolio. This is a company that has consistently raised its dividend over time and has great free cash flow yields above the dividend yield.
With respect to being more tactically positioned in Canada, I think there are other banks like RBC and National that we would prefer tactically over the next 12 to 18 months.
ANDREW: Royal Bank and National. What would appeal to you with National? I mean, they have been growing rapidly. They just pulled off a big acquisition. Is that part of it, as they squeeze profits out of that?
BRIAN: Well, I think number one, management. Their management has been in place for a while, especially relative to some of the other big banks. Number two, they pulled off a great acquisition out West. And as you know, the West is growing from a population perspective and a GDP perspective a little bit more consistently than what we’ve seen in the East. And number three, from just a pure growth perspective and how they manage their individual divisions, we have a lot of confidence in them.
ANDREW: What about the big U.S. banks? Are they drawing your attention at all, Brian — the JPMorgans and the Bank of Americas?
BRIAN: Yeah. Jamie Dimon, once again, sets it up for everybody to be worried. He likes to underpromise and overdeliver, and he puts his money where his mouth is. Remember, he was one of the CEOs who remained from the credit crisis. He’s been making comments with respect to what’s been going on in terms of private credit, but then also AI — two of the things that most investors are worried about with respect to financials.
We still love financials in the United States from a thematic perspective, Andrew. And the theme is kind of a big barbell. On one side, we like the big banks with respect to the scalability of JPMorgan, Citigroup and Bank of America — especially Bank of America in terms of their Merrill Lynch division. And then we like the really small banks because of the relationships that they’re able to maintain with respect to growing the commercial banking side and the individual banking side.
The in-between banks — quite frankly, more the super-regionals — are the ones that we worry about, because we do think they can’t compete with the small and they can’t compete with the big. So I think the banks that you just had up there, including Wells Fargo, over the next 12 months are where you want to be. Especially as I think a lot of people are forgetting that regulations are going to go down at the big banks, and the funding mechanism, we think, as interest rates continue to go down as well, affordability is going to get better and we’re going to have another real estate increase, with real estate prices continuing to go up.
ANDREW: Brian, what about Home Depot? You say investors should watch out for misleading signals here?
BRIAN: Yes. Now, Home Depot is a bellwether retail stock. Remember, in the fourth quarter people spend their money in the United States a little bit differently than they do the rest of the year. Last year, in 2024, we had an additional fiscal week as well for the fiscal year. So that’s why the numbers are real squishy.
If you look at continuing operations earnings on Home Depot, they beat the number. Home Depot is about consistency in earnings, Andrew. It’s not about this go-go growth side of things. And especially given the fact that consumer sentiment has been weaker, Home Depot is more of a consumer staples retailer. We’ve owned it for several years in the portfolios that we run. So Home Depot, we think, is one of those names that you want to own in a market like this.
ANDREW: What about the U.S. consumer, Brian? We’ve heard endlessly about the so-called K-shaped economy — lower-income people struggling. Any thoughts on that? Are you avoiding companies that tend to be more dependent on lower-income people’s spending habits?
BRIAN: No. If you take a look at where Walmart has been over the last 12 to 24 months, low- to medium-income consumers are still spending their money at Costco. Costco, we believe, is a top 25 company in the world. And if you also take a look at Amazon and the price differentials and the price breaks that they’re giving investors, Amazon underperformed last year and a lot of people missed that.
The consumer discretionary sector last year had a much more volatile time. Remember, Tesla is part of the consumer discretionary sector, so that’s what really drove that sector higher, whereas Amazon had more issues, and Amazon was really beaten down from the AWS division, not so much with respect to what’s going on with the consumer.
From the pricing side of things, investors in the United States especially are much more price-conscious. They’re smart about how they’re going to buy things and buy things in volume. I think that’s why the Costcos, the Walmarts and the Amazons still make a lot of sense for us.
And then from a thematic perspective, in smaller mid-cap stocks, we still like a stock called Shake Shack because we believe that company is the next big theme in restaurants. We do believe that the volume and how they’re opening up stores, Andrew, is very, very smart.
ANDREW: Shake Shack, yeah. I believe part of their pitch is our burgers are better quality.
BRIAN: They are. Our theme for Shake Shack is that we think Gen Z is to Shake Shack what millennials were to Chipotle. Millennials liked to be a little bit more healthy. Shake Shack is talking a little bit about that, but Gen Z is about living today, and they want to go have their burger with their large pop and their French fries. I think that’s a major theme and why Shake Shack, we believe, from a fundamental and thematic perspective, is better positioned than Chipotle.
ANDREW: Thank you very much, Brian. Always great hearing from you. Brian Belski, CEO and chief investment officer at Humilis Investment Strategies.
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This BNN Bloomberg summary and transcript of the Feb. 24, 2026 interview with Brian Belski are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
