Net income, excluding one-off items, came in at C$2.62 billion ($1.95 billion), or C$2.06 a share, in the three months ended Oct. 31, compared with C$2.72 billion, or C$2.10, a year earlier. Analysts on average had expected C$2 a share, according to Refinitiv data.
The hit primarily came from Scotiabank's global banking and markets unit, which reported a drop in profit, as advisory and trading volumes fell in challenging market conditions.
Mergers and acquisitions in Canada in the three months ended Sept. 30 nearly halved to C$22.8 billion ($17 billion), according to Refinitiv data.
The company also booked provisions of C$529 million, up from C$168 million a year ago as a worsening economic picture prompts lenders to set aside funds to cover potential loan losses.
Canada's third-largest lender reported overall net profit of C$2.09 billion, or C$1.63 a share, compared with C$2.56 billion, or C$1.97 a share, last year.
($1 = 1.3454 Canadian dollars)
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Sherry Jacob-Phillips and Maju Samuel)