RBC, BMO, Scotiabank and National Bank post profit gains while executives caution on trade outlook
Canadian big banks defied forecasts in the third quarter, with profits boosted by lower-than-expected provisions for potential loan losses even as trade uncertainty continues to weigh on the economic outlook.
Canada’s economy has shown resilience despite ongoing tariff tensions with the United States.
As reported by Reuters, most goods are still entering the US tariff-free under the US-Mexico-Canada Agreement, helping to cushion the impact.
While business sentiment has been cautious, bank executives said fiscal support and compliance with trade rules have limited the damage to key industries.
Royal Bank of Canada
As Canada’s largest lender, Royal Bank of Canada (RBC) posted adjusted earnings of $3.84 per share, well above analyst expectations of $3.32, according to BNN Bloomberg.
Profit rose to $5.4bn from $4.5bn a year earlier, while revenue increased to $16.99bn from $14.63bn. Provisions for credit losses were $881m, less than analyst estimates of $1.1bn but above last year’s $659m.
Chief risk officer Graeme Hepworth said, “In the ongoing uncertainty this quarter, we have maintained our prudent posture and retained the elevated weightings to our downside scenarios.”
He added that provisions are expected to “remain elevated for the next few quarters.”
Chief executive David McKay urged policy-makers to strengthen trade agreements, noting that continued tariff exemptions would keep Canada’s effective rate low and sustain resilience.
The Financial Post reported that RBC’s capital markets unit delivered record revenue of $3.76bn, up 25 percent year over year, while wealth management profit climbed to $1.1bn.
Shares rose almost 6 percent on the Toronto Stock Exchange.
Bank of Montreal
Bank of Montreal (BMO), Canada’s fourth-largest lender, earned $3.23 per share on an adjusted basis, ahead of analyst estimates of $2.95, according to Reuters.
Loan-loss provisions were $797m, below forecasts of $948.5m, aided by improvements in its US commercial loan book.
Chief executive Darryl White acknowledged that his “uncertainty meter was very high” earlier this year but has since “eased,” though he noted that unresolved trade talks and geopolitical challenges continue to weigh on outlook.
BMO’s US operations now account for about one-third of its income.
Shares rose 3 percent, hitting a record high of $163.85.
Bank of Nova Scotia
The Bank of Nova Scotia (Scotiabank), Canada’s third-largest bank, reported adjusted earnings of $1.88 per share, surpassing the average estimate of $1.73, as reported by Reuters.
Provisions for credit losses were $1.04bn, less than analyst expectations of $1.19bn.
Chief risk officer Phil Thomas said the bank remained focused on navigating the “macroeconomic environment in Mexico,” where clients were adjusting to shifting trade dynamics.
One-tenth of Scotiabank’s earnings come from Mexico and another 10 percent from the US, reflecting its focus on the North American trade corridor.
Bloomberg reported that Scotiabank’s Canadian banking division, crucial to its turnaround plan, delivered net income of $959m, beating forecasts of $892m.
Chief executive Scott Thomson said revenue growth drove stronger operating leverage and higher return on equity.
Shares rose nearly 5 percent in Toronto, their highest level since mid-2022.
National Bank of Canada
National Bank of Canada, the country’s sixth-largest lender, reported profit of $1.07bn, up from $1.03bn a year earlier, as per BNN Bloomberg.
Adjusted earnings of $2.68 per share were slightly below expectations of $2.69. Provisions for credit losses increased to $203m from $149m.
Chief executive Laurent Ferreira said results reflected “strong revenue fundamentals and credit performance,” highlighting synergy momentum from its Canadian Western Bank acquisition.
Wealth management profit rose 12 percent to $244m, while US specialty finance and international operations gained 13 percent to $178m.
The bank also announced a plan to repurchase up to 8 million shares, pending regulatory approval.
Investors responded positively to the results.
RBC and Scotiabank shares both posted sharp gains, with RBC hitting a record high.
Michael Dehal, senior portfolio manager at Dehal Investment Partners with Raymond James, told Reuters that “the results are encouraging, we are seeing tensions easing and there is optimism that there will be a trade deal coming soon.”
Toronto-Dominion Bank and Canadian Imperial Bank of Commerce have yet to release their third-quarter results as of writing.
