Canada's Big Five Banks Beat Q3 Earnings Expectations Amid Easing Trade Tensions

Canada's five largest banks beat Q3 earnings expectations as trade tensions ease, with all banks setting aside less money for loan-related losses. The banks built up reserves in Q2 due to US tariff threats, but the outlook has improved since April. Executives cautioned that uncertainty around a trade deal could slow the economy and trigger higher inflation.

Canada's five largest banks reported strong third-quarter earnings, exceeding analysts' expectations as trade tensions with the U.S. ease. The banks, which include Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Bank of Nova Scotia (Scotiabank), and Canadian Imperial Bank of Commerce (CIBC), all set aside less money for loan-related losses compared to the previous quarter.

Scotiabank (BNS-T), which opened the earnings season, reported a profit of $2.53 billion, outperforming expectations despite uncertainty surrounding U.S. tariffs. The bank's earnings per share (EPS) were $1.84, compared to $1.41 a year earlier. Analysts had expected a profit of $1.73 per share [1].

BMO (BMO-T) also beat expectations, reporting a $2.22 billion profit, a 25% increase from the same period last year. The bank's EPS rose 26% to $3.14, compared to $2.48. BMO's adjusted net income was $2.4 billion, or $3.23 per share, compared to $1.98 billion, or $2.64 per share, a year earlier [1].

TD (TD-T) and CIBC (CM-T) topped analysts' expectations on Thursday, with TD reporting a profit of $2.20 per share, well above the estimate of $2.05. CIBC's earnings per share were $2.16, beating the estimate of $2.09. Both banks benefited from lower-than-expected loan loss provisions and strength in their domestic businesses [2].

RBC (RY-T), Canada's largest bank, reported a net income of $5.4 billion, a 21% increase from the same period last year. The bank's EPS were $3.84, well above the average analyst expectation of $3.29 per share. RBC set aside $881 million in provisions for credit losses, significantly lower than the $1 billion expected by Canaccord Genuity analyst Matthew Lee [1].

National Bank of Canada (NA-T) reported a third-quarter profit of $1.07 billion, up from $1.03 billion a year earlier. The bank's adjusted profit amounted to $2.68 per diluted share, unchanged from a year ago [1].

Executives cautioned that uncertainty around a trade deal could slow the economy and trigger higher inflation. Despite the positive earnings, the banks remain cautious about the outlook, with ongoing trade tensions remaining a key risk factor [1].

References:
[1] https://www.theglobeandmail.com/business/article-canada-banks-earnings-third-quarter-2025-tariffs/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UK0TD:0-canada-s-td-bank-cibc-beat-profit-expectations-on-lower-loan-loss-provisions/