TORONTO, October 24, 2026 Two established Scotiabank trust entities and a separate small lender published formal notices in the Canada Gazette on October 24, saying they intend to apply to federal regulators to reduce the stated capital recorded for their common shares. If approved by the Superintendent of Financial Institutions, the measures would permit distributions back to each entity’s sole shareholder of up to C$170 million in aggregate. The notices name The Bank of Nova Scotia Trust Company, which set an authorized limit of up to C$100 million for reduction of stated capital, and National Trust Company, which set an authorized limit of up to C$70 million. The Canada Gazette posting also included a separate notice from VersaBank about a planned reduction of stated capital tied to a previously disclosed reorganization and asset sale. All three notices say regulatory approval under the Trust and Loan Companies Act or the Bank Act is required before any return of capital can occur. What the filings say Under the terms placed in the Canada Gazette, each company said it adopted a special shareholder resolution on October 7, 2026 that authorized management to seek the Superintendent’s approval to reduce stated capital, and that the company’s chief financial officer would determine the timing and amounts within the authorized limits. The Gazette publication itself is a regulatory prerequisite. The Trust and Loan Companies Act and the Bank Act require a notice in the Canada Gazette and an application to the Superintendent before a reduction of stated capital may be approved. The notices explicitly caution that publication does not mean approval will be granted, and that approval depends on the regulator’s review of the companies’ capital positions, liquidity and other statutory conditions. Why companies reduce stated capital A company’s stated capital is an accounting measure of equity tied to common shares. Reductions of stated capital are a mechanism that companies sometimes use to reorganize their balance sheets, simplify group capital structures, or return cash to a shareholder without a traditional dividend. For regulated trust companies and banks, those transactions carry extra scrutiny because the regulator must be satisfied the reduction will not impair the institution’s ability to meet its obligations or leave it in breach of capital or liquidity requirements. When done within the rules, a reduction of stated capital can be a tax efficient way for a parent group to move funds, or to tidy up legacy capital accounts after internal reorganizations. The Gazette notices link the proposed reductions to special resolutions and in some cases to reorganization agreements that the companies say were previously executed. Regulatory gatekeeper and timing The Superintendent of Financial Institutions acts as reviewer and gatekeeper for these requests. The statutory tests require applicants to provide financial statements, rationale for the reduction, and evidence that the move would not leave the institution insolvent or in breach of regulatory capital requirements. The Superintendent has discretion to grant approval, to refuse, or to require conditions. The notices filed in the Canada Gazette begin the clock on the statutory process, but they do not set a precise timetable for the regulator’s decision. The law requires that an application be made within three months of the special resolution and that supporting information accompany the application. That means any decision is likely to take weeks to months, depending on the completeness of filings and whether the regulator seeks additional information. Potential implications for Scotiabank and markets The amounts involved, up to C$100 million and C$70 million for the two trust companies, are modest relative to the consolidated balance sheet of Scotiabank and Canada’s major banks. They are more likely to reflect internal balance sheet housekeeping after group reorganizations, investment transfers, or a desire to centralize capital at the parent level than to signal stress. That said, bank and trust company capital movements are closely watched by analysts and investors because they can change how capital is allocated inside large financial groups, and they can influence future dividend or buyback capacity at the parent. The requirement for regulatory approval also means that supervisors will test whether the reductions are purely administrative or whether they could have downstream consequences for depositors, trust clients or the parent bank’s capital ratios. A separate notice from VersaBank included in the same Gazette issue described a reduction of stated capital tied to the sale of a U.S. unit and related reorganization steps. That filing shows that smaller chartered banks are also using the statutory mechanism to realign capital after transactional activity. What to watch next Market participants and observers will watch for filings from the companies applying formally to the Superintendent, and for any additional disclosures in corporate filings or management commentary that explain the purpose of the capital moves in more detail. The regulator’s review outcomes are public only when they are completed and in some cases will be reflected in subsequent financial statements and securities filings. For customers and clients of the trust companies, the immediate impact is likely to be minimal. The law and regulator exist to ensure that reductions of stated capital do not impair an institution’s ability to meet contractual obligations. Nevertheless, the notices are a reminder that capital management in large financial groups often proceeds through formal legal steps and requires regulatory sign off. Bottom line The Canada Gazette notices published today set in motion a formal regulatory process that could allow The Bank of Nova Scotia Trust Company and National Trust Company to transfer up to a combined C$170 million to their common shareholder if approved. The actions appear consistent with group capital management and reorganization practices, but they will proceed only after the Superintendent of Financial Institutions completes its statutory review and is satisfied they are consistent with supervisory objectives. Readers seeking absolute certainty on timing or amounts will need to monitor future corporate filings and any decision documents issued by the Office of the Superintendent of Financial Institutions.