By The Canadian Press on May 28, 2025
Estimated reading time: 8 minutes

Three of Canadian banks release their earnings

By The Canadian Press on May 28, 2025
Estimated reading time: 8 minutes

Profits are a mixed bag for Canada’s big banks, but Scotia CIBC and BMO all admit concern for borrowing.

A Scotiabank sign is shown on a shopping mall in Ottawa.

Sean Kilpatrick / The Canadian Press

Bank of Nova Scotia (TSE: BNS)

Net income: $2.03 billion
Q2 profit: $1.48 per diluted share

The Bank of Nova Scotia reported second-quarter net income of $2.03 billion, down from $2.09 billion a year earlier as it put aside more money for bad loans. The bank also raised its quarterly dividend Tuesday to $1.10 per share, up from $1.06 per share.

The increased payment to shareholders came as Scotiabank says its profit amounted to $1.48 per diluted share for the quarter ended April 30, compared with a profit of $1.57 per diluted share in the same quarter last year.

Revenue totalled $9.08 billion, up from $8.35 billion, while the bank’s provision for credit losses for the quarter amounted to $1.40 billion, up from $1.01 billion a year ago. On an adjusted basis, Scotiabank says it earned $1.52 per diluted share, down from an adjusted profit of $1.58 per diluted share a year earlier. Analysts on average had expected an adjusted profit of $1.56 per share, according to data provided by LSEG Data & Analytics.

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Changes at Scotiabank

Scotiabank chief executive Scott Thomson said the bank is focused on what it can control and its strategic plan amid an evolving economic outlook.

“This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook,” Thomson said in a statement. “With strong balance sheet metrics, we remain well-positioned to support our clients through this period of uncertainty and to seize growth opportunities as they arise.”

Scotiabank said its Canadian banking operations earned $613 million in net income attributable to equity holders, down from $893 million a year ago as it faced a higher provision for credit losses and non-interest expenses, partly offset by higher revenues.

Scotiabank’s international banking operations earned $676 million in net income attributable to equity holders, up from $639 million in the same quarter last year. The bank’s global wealth management group’s net income attributable to equity holders was $399 million for its latest quarter, up from $341 million a year earlier.

Scotiabank’s global banking and markets division earned $413 million in net income attributable to equity holders, up from $375 million a year ago.

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CIBC reports rise in profit on trading boost, modest borrower concerns

Canadian Imperial Bank of Commerce (TSE: CM)

Q2 profit: $2.01 billion

CIBC reported a rise in second-quarter profit from last year as it got a boost from volatility-related trading while loan losses were subdued despite the economic uncertainty.

The bank on Thursday reported a second-quarter profit of $2.01 billion, up from $1.75 billion in the same quarter last year.

On an adjusted basis, the earnings worked out to $2.05 per share, up from $1.75 last year, and well above the $1.89 per share analysts had expected according to LSEG Data & Analytics.

Like other banks this quarter, lower-than-expected provisions for potentially bad loans was a big source of the beat, as CIBC expressed confidence in its loan book.

“We remain comfortable with the overall strength of our Canadian consumer portfolios,” said chief risk officer Frank Guse on an earnings call Thursday.

“Despite the economic challenges, our impaired losses continue to be at the low end of our guidance, supported by the strong performance of our credit portfolios.”

The bank did see credit card and personal lending writeoffs trend higher quarter-over-quarter as unemployment rose. The bank also saw a slight increase in 90-day mortgage delinquencies, but it isn’t a major concern, said Guse.

“We do not expect meaningful losses given the strong average loan-to-value in the book.”

The bank’s provisions for credit losses also reflect only moderately increased concern on borrowers, with CIBC raising its total provisions to $605 million, up from $514 million in the same quarter last year.

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While the mortgage book isn’t a big concern for CIBC, it’s focusing growth efforts elsewhere as the real estate sector slows and margins are compressed.

“When you look at the economics of the mortgage business, while they are still strong, it is a much smaller contributor for us today,” said Hratch Panossian, head of CIBC’s Canadian personal and business division.

“Going forward, I would see more of the same.”

He said the bank is more focused on higher growth areas like credit cards, demand deposits and investments, but that mortgages are still a key product that they’ll be ready to provide clients.

With several segments still showing growth, CIBC posted revenue totalling $7.02 billion, up from $6.16 billion.

Revenue was boosted in part from a 32% jump in adjusted revenue its capital markets division in the quarter from last year, as market volatility helped push adjusted trading revenue up 4% in the quarter.

Expenses were also 9% higher than a year earlier, as the bank invested in technology, issued performance-based compensation, and some severance costs.

The bank didn’t break out specific numbers as to how many employees it let go, but said it was using the opportunity of strong revenues to rightsize its staff base.

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BMO reports rise in profit even as companies remain hesitant on borrowing

Bank of Montreal (TSE: BMO)

Q2 profit: $2.50 per diluted share
Net income: $1.96 billion

BMO Financial Group’s second-quarter profit rose from a year ago even as its Canadian banking and capital markets divisions saw income drop from tariff-related uncertainty.

The bank on Wednesday reported a net income of $1.96 billion, up from $1.87 billion for the same quarter last year, with the biggest boost coming from lower losses in its corporate segment after a spike in acquisition costs last year.

It also announced a quarterly dividend of $1.63 per common share, an increase of eight cents compared with the prior year, or a four-cent hike compared with the previous quarter.

But overall the bank’s earnings reflect hesitant consumers and businesses given the unpredictable trade policies of U.S. President Donald Trump.

“The economic backdrop in North America continues to be challenged by the uncertain environment,” said chief executive Darryl White on an earnings call.

“Business activity and loan demand in both countries is reflecting the impact from trade uncertainty, and businesses are being cautious around the deployment of capital.”

The uncertainty has led to a rise from last year in the amount of money BMO has set aside for potentially bad loans, with provisions of $1.05 billion in the quarter, up from $705 million in the same quarter last year.

The move follows other banks that also increased provisions in the quarter. Scotiabank said Tuesday it had boosted its total to $1.4 billion, up from slightly over $1 billion last year, while on Wednesday National Bank said its provisions were at $545 million, up from $138 million last year.

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BMO’s provisions are however down from two quarters ago, including in the impaired provisions category (where it isn’t confident it will be repaid) which were at $765 million, down from $1.11 billion two quarters ago.

The drop from the recent peak came as businesses are showing signs of optimism that the trade issues could be resolved, said Nadim Hirji, BMO’s head of commercial banking.

“Execution has obviously been delayed due to uncertainty in the market. However, I will say also that in my recent conversations with clients, sentiment is actually improving,” he said.

“We do expect loan growth to be positive in the back half of the year. And I’ll also say that we’ve seen the month of April shows some positive signs already.”

National Bank chief executive Laurent Ferreira also said he was encouraged by the direction on trade, and that the effective tariff rate for Canadian businesses is lower than anticipated.

“Despite the uncertainty, Canadian consumers and businesses are demonstrating resilience,” he said on an earnings call Wednesday.

Canadian Parliament resuming work after the election should also help boost confidence, said White.

“The recent outcome of the federal election is a renewed government with an aggressive economic growth agenda,” he said.

“We’ve seen promising early results by the federal and several provincial governments in support of eliminating barriers to interprovincial trade. We encourage a positive resolution in support of a stronger overall Canadian economy.”

The bank says profit amounted to $2.50 per diluted share for the quarter ended April 30, up from $2.36 per diluted share a year earlier.

Revenue totalled $8.68 billion, up from $7.97 billion in the same quarter last year.

On an adjusted basis, BMO says it earned $2.62 per share in its latest quarter, up from an adjusted profit of $2.59 per share a year earlier.

Analysts on average had expected BMO to earn an adjusted profit of $2.53 per share, according to LSEG Data & Analytics.

The beat came in part from outsized trading revenue that will likely moderate in the quarters ahead, said Scotiabank analyst Mike Rizvanovic in a note, while he said loan growth was an issue.

“Another sequential decline in loan balances in the U.S. [personal and commercial] banking segment remains a concern in terms of the bank’s growth trajectory in that key market.”

Investors will get more insights into bank earnings Thursday as RBC and CIBC report results to wrap the quarter for Canada’s big banks.

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