Stock market news for investors: Canadian banks report Q1 earnings

On an adjusted basis, BMO says it earned $3.04 per share in its latest quarter, up from an adjusted profit of $2.56 per share a year earlier.

Analysts on average had expected BMO to earn an adjusted profit of $2.41 per share, according to according to LSEG Data & Analytics.

“We delivered strong first-quarter performance with broad-based revenue growth driving positive operating leverage in each of our operating groups,” BMO chief executive Darryl White said in a statement.

BMO said its Canadian personal and commercial banking business earned $894 million in its latest quarter, down from $921 million a year earlier.

In the U.S., the bank’s personal and commercial banking operations earned $580 million, up from $560 million in the same quarter last year.

BMO’s wealth management business earned $369 million in its latest quarter, up from $240 million.

The bank’s capital markets business earned $587 million, up from $393 million in the same quarter last year.

If tariffs come, as U.S. President Donald Trump said again on Monday they would, the bank would have to set aside much more capital in the second quarter in anticipation of the economic hit the border taxes would have on businesses and consumers.

“It’ll be meaningful but manageable,” he said. 

Even just the threat of tariffs though has caused borrowers to become more hesitant, said Thomas.

“Whether it’s on the retail side, the corporate side, the commercial side, you see a bit of a stasis right now. And so it’s causing people to sort of pause and think about what they’re going to do.”

The bank’s total provisions for potentially bad loans was at around $1.16 billion at quarter end, up $132 million from the previous quarter driven in part by its Canadian banking division.

If tariffs come in, which could happen as early as next week, Scotiabank would see a sizable add to its provisions, said Thomas.

The bank had a capital buffer ratio of 15.1% at the end of last quarter, well above the regulatory minimum of 11.5%, leaving it in a good place to see through the risks, said Thomas.

Capital was high as Scotiabank reported a net income of $993 million or 66 cents per diluted share for the quarter ended Jan. 31, down from $2.20 billion or $1.68 per diluted share in the same quarter a year earlier.

The results in the most recent quarter included a $1.36-billion impairment charge related to the sale of its business in Colombia, Costa Rica and Panama.

Revenue totalled $9.37 billion, up from $8.43 billion in the same quarter last year.

On an adjusted basis, Scotiabank says it earned $1.76 per share, up from an adjusted profit of $1.69 per share a year earlier.

The average analyst estimate was for an adjusted profit of $1.65 per share, according to according to LSEG Data & Analytics.

Scotiabank says its Canadian banking operations earned $913 million in net income attributable to equity holders, down from $973 million a year ago, while its international banking business earned $651 million in net income attributable to equity holders, down from $713 million.

The bank’s global wealth management business earned $407 million in net income attributable to equity holders, up from $330 million in the same quarter last year.

Scotiabank’s global banking and markets business earned $517 million in net income attributable to equity holders, up from $388 million a year ago.

The bank says its adjusted profit, which excludes items related to its acquisition of Canadian Western Bank, amounted to $2.93 per diluted share, up from an adjusted profit of $2.59 per diluted share a year ago.

Analysts on average had expected an adjusted profit of $2.65 per share, according to LSEG Data & Analytics.

“The bank generated strong first-quarter financial results, reflecting solid execution across business segments and our diversified earnings power,” National Bank chief executive Laurent Ferreira said in a statement.

“In a context of heightened macroeconomic and geopolitical uncertainty and an evolving credit cycle, we remain committed to maintaining our usual discipline regarding credit, capital and costs.”

The bank’s wealth management business earned $242 million, up from $196 million a year earlier, while its financial markets operation earned $417 million, up from $308 million a year ago.

National Bank said its personal and commercial banking business earned $290 million in the quarter, down from $339 million a year earlier, due to an increase in its provisions for credit losses.

The bank’s U.S. specialty finance and international business earned $183 million, up from $150 million in the same quarter a year earlier.

National Bank completed its acquisition of Canadian Western Bank on Feb. 3.

The bank has called the deal a key pillar of its domestic growth strategy for 2025. 

Ferreira has said the acquisition will strengthen NationalBank’s position across the country and allow for more growth in Western Canada.

The average analyst estimate had been for an adjusted profit of $1.97 per share, according to LSEG Data & Analytics.

“In the first quarter of 2025, we delivered another strong financial performance by continuing to execute on our client-focused strategy, which is generating consistent results for our stakeholders,” CIBC chief executive Victor Dodig said in a statement.

CIBC said its Canadian personal and business banking business earned $765 million for the first quarter, up from $714 million a year ago, helped by higher revenue, partially offset by higher expenses and a higher provision for credit losses.

The bank’s Canadian commercial banking and wealth management business earned $591 million for the quarter, up from $523 million a year ago, while CIBC’s U.S. commercial banking and wealth management division earned $256 million compared with a loss of $8 million a year earlier.

CIBC’s capital markets business earned $619 million in its most recent quarter, up from $522 million a year earlier.

The threat of tariffs and trade uncertainty ahead is leading to lower business confidence, and some clients have delayed investment decisions, but the economy held up well last quarter, said McKay.

“The Canadian economy performed through most of the quarter better than we thought. Client activity was strong across all our businesses.”

He said commercial loan growth could moderate on the uncertainty of tariffs but some clients are still pushing for growth. Even if tariffs do come in, it won’t mean shutting down the whole economy like at the start of the pandemic.

“The world’s not going to collapse overnight, so it’s very different. This should be more manageable at the end of the day.”

In preparation for uncertainty, the bank increased its provisions for potentially bad loans to $1.05 billion for the quarter, up from $813 million a year earlier.

Provisions include new additions in commercial banking from sectors like real estate, consumer discretionary and agriculture, while it also took $45 million in provisions related to the California wildfires and $66 million in personal banking.

The bank also took additional provisions on previously impaired loans in the forestry and automotive sectors, two areas that are expected to be hit especially hard by tariffs.

RBC has been looking at various potential outcomes on how tariffs and an economic downturn could play out, with a worst-case scenario seeing Canadian unemployment rising to 10.4% and real GDP falling by 7.4% by mid-to-late 2026.

“We’ve looked at a whole range of scenarios here ranging from, you know, very severe across-the-board tariffs, global impact, through to … more targeted scenarios and the impacts of things like steel and aluminum, so the range of outcomes there is very, very broad,” said chief risk officer Graeme Hepworth.

The bank already, as a regulated practice, tests itself against several downturn potentials so the scenarios aren’t new with tariffs, it could just be a trigger, he said.

“We already attribute a fairly significant weighting to these pessimistic outcomes, and in tariffs, we might just have what could be the driver of them.”

While uncertainty could affect business, RBC also benefits from volatility, said McKay.

The bank, like others this past quarter, saw a big boost from heightened trading activity ushered in by the election of U.S. President Donald Trump.

The trading helped increase its capital markets division earnings to $1.43 billion, up from $1.15 billion a year earlier.

Overall profits of $3.54 per diluted share for the quarter ended Jan. 31 were up from a profit of $2.50 per diluted share a year earlier.

On an adjusted basis, RBC says it earned $3.62 per diluted share in its latest quarter, up from an adjusted profit of $2.85 per diluted share in the same quarter last year.

The average analyst estimate had been for an adjusted profit of $3.26 per share, according to LSEG Data & Analytics.

Scotiabank analyst Meny Grauman said in a note that while trading helped the bank’s earnings, it would have still beat expectations by five per cent without the boost.

Other sources of the bottom line beat were strong positive operating leverage, and a solid beat on net interest income.

The bank’s impaired provisions of $985 million were well above analyst estimates of $759 million, but the single isolated account did make up a good portion of that, said Grauman.

“Credit deterioration shouldn’t overshadow underlying strength,” he said.

RBC said its personal banking business earned $1.68 billion in its latest quarter, up from $1.35 billion in the same quarter a year earlier, while its commercial banking operations earned $777 million, up from $650 million.

The bank’s wealth management business earned $980 million, up from $664 million. RBC’s insurance division earned $272 million, up from $220 million.

The costs weighed somewhat on earnings, which came in at $2.79 billion, down from $2.82 billion in the same quarter last year, or flat on both an adjusted and per share basis.

But the bigger question than a single quarter result is what’s ahead for TD as it looks to put the anti-money laundering scandal behind it, and as Chun moves to shape a new direction for the bank.

As part of those efforts, TD announced in February it was selling its full stake in The Charles Schwab Corp. for proceeds of about $20 billion, with about $8 billion going to share buybacks and the rest going back into company expansion.

Since the bank is still going through a strategic review, Chun declined to give specifics on where it will be putting the rest of the money.

The bank is also working to reduce its assets in the U.S. to give it more options, since as part of its settlement with U.S. regulators, the bank has a U.S. asset limit of US$434 billion.

So far the bank has reduced its assets by about 10%, including US$25 billion of borrowings paid down during the first quarter, while it has also since announced a deal to sell a US$9 billion mortgage portfolio.

Tackling expenses is also part of the longer-term strategy, and one of its key priorities, even as it works to expand some operations, said Chun.

“From a cost optimization, we’re going deep to rightsize our cost base,” he said.

“As we move forward, we will continue to invest in our business, but then manage our expenses back down to a more normalized growth.”

While expenses were a pressure, the bank also benefited somewhat from the elevated trading levels seen at other banks, and growth in some lines of business.

Revenue for the first quarter totalled $14.05 billion, up from $13.71 billion.

The bank says its profit amounted to $1.55 per diluted share for the quarter ended Jan. 31, the same as a year earlier.

The bank’s provision for credit losses amounted to $1.21 billion, up from $1 billion in the same quarter last year.

On an adjusted basis, TD says it earned $2.02 per diluted share in its latest quarter, up from an adjusted profit of $2.00 per diluted share a year earlier.

The average analyst estimate had been for an adjusted profit of $1.96 per share, according to LSEG Data & Analytics.

Jeffries analyst John Aiken said TD had a solid quarter, though not as strong as its peers.

“TD is progressing on its AML remediation and restructuring of its balance sheet. While expenses are at a higher run-rate, we note that operationally, profitability is improving and the restructuring has not had a dire impact on earnings.”

Leo Salom, head of TD’s U.S. division, said the measures the bank is taking is setting itself up for the future.

“Our focus here is to leverage 2025 as that transition year, to make the investments we need to in the core franchise to be able to address some of our remediation activities,” said Salom on the call.

“We’re doing those things to be able to enter into 2026 with a more normalized profile.”