Canadian Big Banks' Q3 Earnings Expectations: Visible Alpha Breakdown

Canadian banks are set to report Q3 earnings, with Bank of Montreal and Bank of Nova Scotia leading the way on August 26. The banks will report earnings through to Laurentian Bank of Canada on August 29. The Visible Alpha breakdown of expectations suggests that Canadian banks will report mixed results, with some banks expected to beat expectations while others may miss them.

Canadian banks are poised to unveil their third-quarter earnings, with Bank of Montreal (BMO) and Bank of Nova Scotia (BNS) leading the way on August 26. The earnings season will continue through to Laurentian Bank of Canada on August 29. According to Visible Alpha’s consensus estimates, the results are expected to be mixed, with some banks potentially beating expectations while others may fall short.

Analysts anticipate that Canadian banks will report lower provisions for loan losses compared to the second quarter, primarily due to the less severe impact of U.S. tariffs on their loan portfolios [1]. This trend is expected to continue, with provisions projected to decline sequentially from C$6.37 billion in the second quarter to C$5.22 billion in the third quarter [1].

Despite the healthier loan portfolios, loan growth remains a concern. Analysts predict weak loan growth due to low demand, a trend that has persisted despite the easing of tariffs [1]. This is particularly evident in the capital markets and wealth management segments, where banks are expected to benefit from fee income and rising demand, offsetting the weak loan growth [2].

The Canadian banks, known for their robust capital positions, are expected to deploy their excess capital through stock buybacks. In the third quarter alone, the banks have cumulatively deployed about C$4 billion in stock buybacks [2]. This strategy reflects the banks' limited options to invest at home due to a saturated market and their focus on expanding in the U.S. and building their wealth management business.

Key earnings estimates for the five major Canadian banks include:
- Bank of Nova Scotia (BNS): Non-GAAP EPS estimated at C$1.73, with net interest income rising by 11.26% Y/Y to C$5.41B [1].
- Bank of Montreal (BMO): Non-GAAP EPS estimated at C$2.96, with credit loss provision standing at C$917.79M [1].
- Royal Bank of Canada (RY): Non-GAAP EPS estimated at C$3.29, with credit loss provision at C$1.07B [1].
- Toronto-Dominion Bank (TD): Non-GAAP EPS estimated at C$2.03, with net interest income at C$8.49B and provision for loan losses at C$1.21B [1].
- Canadian Imperial Bank of Commerce (CM): Non-GAAP EPS estimated at C$2.00, with credit loss provision at C$571.60M [1].

Investors and financial professionals are advised to closely monitor the banks' commentary on capital deployment plans, which could provide insights into their medium-term financial strategies [2].

References:
[1] Seeking Alpha. (2025). Canadian Banks FQ3 Earnings Preview: Lower Provisions, Weak Loan Growth Expected. Retrieved from https://seekingalpha.com/news/4488926-canadian-banks-fq3-earnings-preview---lower-provisions-weak-loan-growth-expected
[2] Reuters. (2025). Canadian Banks Dodge Worst-Case Tariff Scenario in Latest Earnings. Retrieved from https://www.reuters.com/business/finance/canadian-banks-dodge-worst-case-tariff-scenario-latest-earnings-2025-08-25/