For most of the past 15 years, foreign cash quietly left Canada. The CEO of one of Canada's biggest banks just said the trend is starting to flip.
Oil prices, new spending, and a more pro-business federal plan are pulling cash back in, per the Canadian Press.
Scott Thomson didn't bury the headline. On the Wednesday earnings call, he said it plainly.
"Over the last 15 years, and I've lived this, you've seen a lot of foreign money leave Canada. And now you have a lot of foreign money looking at Canada."
He laid out three reasons for his Canada optimism. Oil sits above $90 a barrel.
That's good for Canada as a net exporter. It also gives Ottawa room to spend.
Part of that is a new sales tax break for first-time buyers on homes worth up to $1 million. The federal plan matters too.
New pipelines, carbon capture, and possible airport sales are creating real places for foreign cash to land.
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Scotiabank's quarter helped his case. Profit hit $2.63 billion, up from $2.03 billion a year ago.
Revenue climbed to $9.84 billion from $9.08 billion. The bank raised its quarterly dividend to $1.14 a share from $1.10.
EPS is profit per share of stock. Reported EPS came in at $2.00.
Adjusted EPS hit $2.02. That beat the $1.94 mark analysts had set.
Jefferies analyst John Aiken called it a "solid beat." Canadian banking profit jumped to $935 million from $613 million.
Other units grew too. Wealth, trading, and global banking all rose.
Thomson didn't pretend the road is clear. He flagged risk from the Iran war.
He also flagged US-Canada trade risk. Credit losses came in a bit above the bank's own outlook.
Chief Risk Officer Shannon McGinnis said bad-loan reserves are "slightly elevated." She added that pressure should ease in the second half of the year.
The broader read from Thomson is that Canada's investment story might be entering a new chapter.
For US investors, this story matters in a quiet way. Canadian bank stocks often pay higher dividend yields than US banks do.
A more pro-business backdrop could lift the whole TSX, which is Canada's main stock index. Canadian banks have long been steady names for income investors.
The big question is whether Thomson's read is right. Watch next quarter's foreign cash flow data for the answer.
For now, the dividend hike sends its own signal. Banks don't raise the payout if they're scared of what's coming.
The new $1.14 per share is up from $1.10. That's a small step, but it lands in the same quarter Thomson called the outlook "relatively optimistic."
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