Big Six banks beat expectations as economy pushes on despite uncertainty

TORONTO — CIBC, Royal Bank of Canada and TD Bank Group all reported profits up from a year earlier on Thursday, boosted by trading revenue and other market-related gains even as some results hinted at pockets of stress beneath the surface.

The three banks capped first-quarter results that saw all of Canada’s Big Six banks beat earnings expectations as the economy pushed on despite elevated unemployment and deep trade issues.

“The Canadian economy remained resilient through the elevated uncertainty from persistent and evolving geopolitical and trade tensions,” RBC chief executive Dave McKay told a conference call with financial analysts and investors to discuss the company’s results.

The overall tone from the banks was one of cautious optimism, that Canada will figure out a trade deal with the U.S. and the federal government’s spending plans will boost the economy.

“We also expect meaningful opportunities in commercial banking when we have certainty around CUSMA, and when we start seeing the execution of large-scale infrastructure projects highlighted in the Canadian federal budget,” McKay said.

But for now there are still many struggling through higher unemployment and other pressures.

RBC reported its gross impaired loans were up $485 million from the previous quarter, driven by a $294-million increase in personal banking stemming mostly from Canadian residential mortgages.

To prepare for potentially bad loans, RBC increased its provisions for credit losses to $1.09 billion for the quarter ending Jan. 31, up from $1.05 billion a year earlier.

The increase was more than offset by improvements elsewhere, leading the bank to report a profit of $5.79 billion for the quarter, up from $5.13 billion a year earlier.

CIBC and TD meanwhile reduced their provisions for credit losses in the quarter as they saw concerns easing somewhat among clients and the economy.

TD chief risk officer Ajai Bambawale said macro changes were a main driver for the reduction.

“If you go and look at our disclosures, you’ll see the unemployment numbers have improved, both in Canada and the United States, and you’ll see the GDP numbers have also improved.”

TD’s $173-million trim in its provisions for credit losses came as the bank reported a first-quarter profit of $4.04 billion, up from $2.79 billion a year earlier.

CIBC shaved $5 million off its provisions while it reported a profit of $3.10 billion for the quarter, up from $2.17 billion a year earlier.

Analysts said the broad earnings beats were largely related to boosts from capital markets, though the banks performed well in other segments too.

CIBC cited its increased exposure to the U.S. for helping drive earnings, as its U.S. capital markets division saw a 50 per cent increase from a year earlier and the division now makes up just over a third of its total capital markets revenue.

“We expect the rate of growth in U.S. capital markets will continue to outpace Canada and other regions over the medium term,” CIBC chief executive Harry Culham told an earnings call.

But an increased focus in the U.S. is not a guaranteed win, as more vulnerable customers there are also struggling, said Leo Salom, chief executive of TD’s U.S. division.

“At the higher end, we’re seeing good loan demand, and the economic momentum in the U.S. is translating into good loan growth,” he said.

“Where we’re seeing a little bit of sluggishness in the U.S. market broadly is at the small business, and sort of the lower end community banking level.”

Banks also largely reported muted personal loan growth in Canada in the low-to-mid single digits, with Quebec-focused National Bank as the outlier as it reported an 11 per cent jump in personal loans.

While mortgage growth was on the slower side, reflecting a sluggish housing market more broadly, banks said repayments are tracking their expectations and the hope is for better to come later this year.

“Going forward, we expect increased fiscal stimulus and the diversification of new trading relationships to create a multiplier effect of supporting economic growth and client activity,” McKay said.

This report by The Canadian Press was first published Feb. 26, 2026.

Ian Bickis, The Canadian Press