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Incoming bank of Nova Scotia CEO Brian Porter

As much as Canadians like to complain about the Big Six banks—for their usurious ATM fees and for their CEOs' eight-figure pay packages—they are also, oddly, incredibly proud of these institutions. Our banks are, after all, globally famous for staying solvent in the worst of times. Any resentment toward those paycheques is just one byproduct of a twisted love-hate relationship that also produces a level of respect otherwise reserved for prime ministers and premiers. Our bankers are larger than life.

"Some CEO types, they fill the room; they take all the oxygen out of the air when they come in," says Adam Waterous, head of Scotiabank's investment banking group. "That's not Brian."

That would be Brian Porter, who on Nov. 1 takes the top spot at Scotiabank, replacing Rick Waugh, the loquacious CEO who beefed the bank up beyond Canada's borders. The handover kick-starts a transition that will likely see the chief change at most of Canada's banks over the next few years.

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To ease his transition, Porter was named president a year ago. He quickly learned it's a new ball game. "You have to be your very best every day. My days and evenings are very full. Whether it's a customer, or a staff function, you've got to be on," he says. Yet people who know Porter describe him this way: thoughtful, private, calm, enigmatic. He sounds more like an English professor than someone set to take over the country's third-biggest bank.

And what a bank it has become. Under Waugh's leadership, Scotiabank's profit soared to $6.5 billion in the last 12 months, up from $2.5 billion in 2003. It is now also by far the most international Big Six bank, with a footprint in 56 countries. Last quarter, nearly half of its bread-and-butter banking profits came from abroad. So much for the stereotype of Canada's banks being cosseted by a protected domestic market.

Not only will Porter be judged against Waugh's impressive record, he must also cope with an industry that is rapidly evolving. Growth is expected to be much harder to come by at home because Canadians are massively indebted and the economy is expanding at little more than a snail's pace.


Scotiabank does have an edge in uncertain times—the bank makes a point of meeting earnings expectations, building investor trust.

This isn't by accident. Though the lender has expanded aggressively since the financial crisis, inking $13-billion worth of acquisitions, the campaign has been carefully plotted. Scotiabank may have made two large purchases in personal and commercial banking, but they were on different continents—Waugh bought ING Bank of Canada for $1.9 billion, and acquired 51% of Banco Colpatria in Colombia for about $1 billion. And while his other big-name deal was also a Canadian one, scooping up the portion of DundeeWealth the bank didn't already own for $2.3 billion, it was struck in an entirely different sector, wealth management.

The bank also has a healthy mix in its international unit, which it groups into three regions: Latin America, Central America and the Caribbean, and Asia. "A lot has to go wrong in a lot of different places for their growth strategy to be dramatically impaired," says National Bank Financial analyst Peter Routledge. Those regions' economies rise and fall for different reasons, he explains.

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Scotiabank has also relied on an expansion playbook that emphasizes discipline. Porter cautions against growth for growth's sake. "I always like to say, buying's the easy part. Executing the integration of the purchase is the hard part." Scotiabank management has a history of acquiring a minority stake in another bank, maybe 20% of the shares, then getting on the board, and then buying more if they like what they see. "They're not prone to hubris," Routledge says. "They know they can screw up, so they go very slowly."

But no bank is bulletproof, and emerging markets are inherently unpredictable. When Scotiabank entered Peru and Venezuela 16 years ago, Peru was risky, while Venezuela was the promising star. Now their positions are reversed. Scotiabank has also made some bad calls, notably its investment in Quilmes, once Argentina's 12th-largest commercial bank. In 2002, after the country's economy went belly up, Scotiabank had to transfer the unit to local lenders, incurring a $540-million writedown.

And if it isn't a region's economy acting unpredictably, it's the politics. In 2011, Scotiabank touted its acquisition of a 20% stake in China's Bank of Guangzhou—a no-brainer bet on a hothouse region in one of the world's most important economies. But that deal was scrapped this past summer. A formal explanation was never given; it seems the only hurdle Scotiabank couldn't jump over was political approval from the highest levels of the Chinese government.

For all these reasons, plain-vanilla Canadian banking can't be ignored by any prudent bank executive. Plus, it still brings in the lion's share of profits. Yet it's the one unit the new CEO of Scotiabank has never worked in.


Before he became a corporate man, Brian Porter was a cowboy. Or at least he worked among them. After graduating from Dalhousie University, he took a job with investment dealer McLeod Young Weir in 1981, working with aggressive traders, bankers and brokers who always look like loose cannons compared to the more staid personalities outside of capital markets.

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As of 1985 Porter was, by his own description, a gofer. But by the time Scotiabank gobbled up the independent firm in 1988, he'd begun his ascent. He made a name for himself on the syndication desk, advising clients on the pricing and structure of equity offerings. One of his standout moves was advising the federal government when it sold the bulk of its Petro-Canada stake to the public. The way Porter priced the $1.7-billion deal—above the asking price in the market—was ballsy, but it produced a big payout. Collectively, Scotiabank and the other underwriters earned an estimated $66 million in fees.

Over time, Porter became responsible for institutional equities and then investment banking, including mergers and acquisitions. "I had the good fortune of being put in charge of a few businesses that weren't working very well, that needed some fixing up," he says. Porter was also ultimately given responsibility for corporate banking—the division of the bank that lends major money. Because of the step up, he started sitting on senior bank credit committees and the like.

But Porter's hallmark move came in 2005 when he jumped ship to the bank proper to become the head of risk. Learning the nitty-gritty of mortgage adjudication wasn't as sexy as advising clients on multibillion-dollar acquisitions, nor was it as high-paying. The pay cut Porter took has never been disclosed, but it is thought to have been millions a year. "Your career's a long game, and you can't look at compensation and focus on one year or two years," he says. "Long term, broadening my career and doing something different meant more to me than any paycheque." When he was offered the CRO position, "I leaped at it because I think I was ready for a change. I wanted to learn more about the bank, the industry." It didn't hurt that the switch put him on the CEO track. And now that he's made it, there's a decent chance that he'll pull in something close to the $11.1 million that Waugh made last year.

Getting this far wasn't easy. Serving as chief risk officer during the financial crisis was exhausting. "It was such a dynamic time. It was 24/7. Policy decisions were being made on the weekend," he says. To round out his resumé, he headed the international unit from 2010 to 2012. The role sent him to Asia once a quarter, wreaking havoc on his internal clock. "Sometimes it felt like Toronto was just where I got my dry cleaning," he says. The stamina he exhibited earned him respect across the ranks of the bank. "Brian sucked it up," says a former colleague. "He deserves a lot of what he got because he paid the price."


Porter is short on enemies, but he isn't a social butterfly either. To many, he is a closed box. "I never got to know the man," one former close colleague quipped to another. Even current allies joke about his stoic demeanour. "I would never want to play poker against him," says Stephen Hart, the bank's new chief risk officer.

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Here's what we know for sure: Porter is a family man. (Of the three children that he and his wife, Megan, have, two are in university, the other is in high school.) It's hard these days to find time to pursue his passion for skiing, but recently Porter was able to get in a trip to Zermatt, Switzerland, while his son was studying at Neuchâtel Junior College.

Porter's also got a thing for the East Coast. Though he was born in Calgary, he has deep roots Down East—his great-grandfather was even a Bank of Nova Scotia board member—and his family has a home in Chester, Nova Scotia, an upscale vacation spot an hour from Halifax.

Your best chance of seeing Porter emote is to bring up the subject of fly fishing for salmon in Labrador. "I love the vastness of Labrador. It's unique, it's beautiful, it's serene. It's spectacular," he says. One of his occasional fishing buddies, octogenarian Newfoundland magnate Harry Steele, whom he met on a flight to Labrador, says he's never seen anyone so passionate about the place in 40 years of angling. But even there, as far as you can get from Bay Street, Steele says Porter doesn't really change. "Some people, when they go fishing or hunting or whatever, they become wild. I've never seen Brian excited or out of control."

That doesn't mean he's aloof. Quite the opposite. Now Latin America head at Scotiabank, Wendy Hannam worked closely with Porter when he ran international banking. Porter, she says, was supportive when her husband was experiencing health problems. The way she sees it, his calm is the foundation of his strengths. "He's very thoughtful. Very strategic. Very, very smart. Big-picture-focused. I haven't seen him get frazzled or flustered."

The calm can be persuasive. "I'm still mad at him, because he basically stole my business," jokes Waterous, the investment banking head. Waterous used to run his own M&A advisory firm, but Porter persuaded him to let Scotiabank buy it in 2005. "If it had been many other people, I would not have sold," he says. Porter "gets people to do things they might not end up doing [otherwise] because it's such a calm, reassuring voice.…He is so persuasive in his delivery that I felt kind of hoodwinked into selling."

And not having an outsized personality does not hinder Porter's ability to manage. "In the investment business, some people are great traders or great investment bankers, but are terrible managers," says David Wilson, the former head of Scotia Capital. "Brian evolved to be a very good manager." Recognizing this potential early on, Wilson got the blessing of Peter Godsoe, Waugh's predecessor, to send Porter to Harvard Business School's Advanced Management Program. In the years since, Porter has honed a certain management style: being respectfully frank. Hart sat down with him when he took on the chief risk officer role this fall, and Porter offered an honest assessment of his work, to identify how to improve for the new senior executive position. "'These are what I think your strengths are, these are what I think you've got to work on.' After 35 years at the bank, that was kind of interesting," Hart jokes. "What? I have weaknesses?"

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To many people inside Scotiabank, Brian Porter was the front-runner to be named CEO, ahead of the likes of former CRO Rob Pitfield and current wealth management and insurance head Chris Hodgson. When Porter's appointment was finally announced, former colleagues at Scotia Capital couldn't help but see better days ahead. Under Rick Waugh, they'd been shunned—even publicly scolded for their pay structure—but here was Porter, one of their own.

Those hopes are now subdued, if not all but dead. Once the initial euphoria wore off, the investment bankers realized that Porter must now steer the whole ship. "I certainly have no illusions that he will give undue weight to this side of the business," says an investment banker. "Shareholders and the board certainly don't want to see the capital markets side of the business driving the bus. That's not why people invest in the Bank of Nova Scotia."

So what will change? Already there's been a major refocusing on customers; there's been a not-so-subtle shift to emphasize deepening relationships and winning business. Employees say edicts have filtered down the chain of command. For instance: "I don't want to see you at a Leafs game with a fellow banker or a supplier; I want to see you there with a customer."

Under Porter, division heads will have more freedom to run their own shows, but with added accountability. Major directives will be set with the CEO, but "he flies pretty high," a manager says, which is a "fundamental shift" for the bank.

Porter made waves by leaving Scotia Capital, and a number of others have since crossed over from the capital markets arm. Expect more to follow. Porter has also made it a personal mission to have more managers with roots in the regions where Scotiabank operates; currently, the vast majority have come up through Toronto. "What's the organization going to look like in five years or eight years or 10 years? We have to build the leadership talent to run the bank from that perspective," he says. Internally, Anatol von Hahn, the current head of Canadian banking, is often touted as an example of what the bank needs more of: someone who can speak Spanish and has lived outside of Canada.

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But there are some things that are so woven into Scotiabank's cultural fabric that one man alone can't change them. The bank will always be cost-conscious—or "efficient," in management-speak. "Cheap Scots," analyst Routledge calls them jokingly, adding that he himself is half-Scottish.

Scotiabank will also continue to be, first and foremost, a credit-driven institution. Roughly 80% of its capital is devoted to credit, and senior executives, including the CEO, are known for taking credit reports home at night.

The way these reports are read will change, though. The bank has a history of giving its CEO a certain colour of pencil so that when he—or one day, maybe she—makes suggestions on documents, the notes are sure to be read. Even in the digital age, Porter is keeping with tradition. "It's part of the culture. If people see your initials on something, then they know it's for real," he says.

Twenty years ago, Peter Godsoe ushered in the green era. Rick Waugh was red. And now? "Brown for Brian."

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