Analysis of First-Quarter Earnings for Major Canadian Banks

The financial landscape in Canada is shaped significantly by its largest banks, which influence not just the economy but also the lives of millions of Canadians. Recently, these banks announced their first-quarter earnings for 2026, revealing insights into their performance during a period marked by both challenges and opportunities. Understanding these results can provide valuable context for investors and consumers alike, as they navigate the complexities of the banking sector.

This report delves into the earnings of the six largest Canadian banks: Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Canadian Imperial Bank of Commerce (CIBC), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and National Bank of Canada. Each institution has its unique strengths and strategies in a competitive environment.

Overview of the Canadian Banking Sector's First-Quarter Earnings

For the first quarter that ended on January 31, all six major banks reported profits that exceeded analysts' expectations. This trend reflects the resilience of these institutions, even amidst concerns such as the ongoing U.S. trade war and rising provisions for credit losses.

• The overall profit increase indicates strong operational performance.
• Analysts had anticipated a rise in profits due to improved loan growth and efficient cost management.
• Aggregate earnings across the banks signal a robust banking sector, contributing to national economic stability.

Bank of Nova Scotia: Strong Earnings Amidst Challenges

• Earnings Q1 2026: $2.29 billion ($1.73 per share)
• Earnings Q1 2025: $993 million ($0.66 per share)
• Adjusted EPS: $2.05 per share
• Analysts’ expectations: $1.95 per share (adjusted)
• Dividend: $1.10 per share

Scotiabank reported a notable profit increase to $2.29 billion, significantly up from the previous year. This growth was achieved despite worries about sluggish loan growth and tariffs affecting its international operations.

In this quarter, Scotiabank set aside $1.18 billion for credit losses, reflecting a cautious approach to potential economic fluctuations. The total revenue increased by 3 percent to $9.65 billion, while expenses decreased by 18 percent, highlighting effective cost management strategies.

CEO Scott Thomson noted that operations in Mexico, a significant market for the bank, remained stable despite regional unrest.

Bank of Montreal: A Focus on Profitability

• Earnings Q1 2026: $2.49 billion ($3.39 per share)
• Earnings Q1 2025: $2.14 billion ($2.83 per share)
• Adjusted EPS: $3.48 per share
• Analysts’ expectations: $3.21 per share (adjusted)
• Dividend: $1.67 per share

BMO's performance improved with a profit of $2.49 billion, driven by stronger operational earnings across various sectors. The bank is actively restructuring its U.S. operations to enhance profitability, aiming for a 15% return on equity.

Notably, BMO set aside $746 million for credit losses this quarter, down from $1.01 billion a year ago. Total revenue increased to $9.82 billion, reflecting a balanced approach to growth and cost management.

National Bank of Canada: Growth Through Acquisition

• Earnings Q1 2026: $1.25 billion ($3.08 per share)
• Earnings Q1 2025: $997 million ($2.78 per share)
• Adjusted EPS: $3.25 per share
• Analysts’ expectations: $2.99 per share (adjusted)
• Dividend: $1.24 per share

National Bank experienced a remarkable profit increase, bolstered by its recent acquisition of Canadian Western Bank. The bank reported earnings of $1.25 billion, exceeding expectations and showcasing its growth strategy.

The bank raised its share repurchase plan, increasing the buyback to 14.5 million shares, indicating confidence in its financial position. Provisions for credit losses were set at $244 million, signaling a proactive stance on managing potential risks.

Royal Bank of Canada: Leading the Charge

• Earnings Q1 2026: $5.8 billion ($4.03 per share)
• Earnings Q1 2025: $5.13 billion ($3.54 per share)
• Adjusted EPS: $4.08 per share
• Analysts’ expectations: $3.84 per share (adjusted)
• Dividend: $1.64 per share

RBC continues to be a dominant force in the banking industry, reporting a 13% increase in profits to $5.8 billion. This growth was attributed to strong performance in personal banking and wealth management sectors.

With total revenue rising to $17.96 billion, RBC is navigating the economic landscape effectively, even as it set aside $1.09 billion for credit losses. This proactive approach reflects a commitment to financial health amidst uncertainties.

Canadian Imperial Bank of Commerce: Solid Results Across Divisions

• Earnings Q1 2026: $3.1 billion ($3.21 per share)
• Earnings Q1 2025: $2.17 billion ($2.19 per share)
• Adjusted EPS: $2.76 per share
• Analysts’ expectations: $2.40 per share (adjusted)
• Dividend: $1.07 per share

CIBC's earnings reached $3.1 billion, benefiting from a 25% increase in profit from its Canadian personal and business banking sectors. This performance underscores the bank's commitment to growth across its divisions.

The results also reflect a strong showing in capital markets, with profits soaring by 42% compared to the previous year. This diverse performance highlights CIBC's strategic focus on expanding its operational effectiveness.

Toronto-Dominion Bank: Restructuring for Long-term Success

• Earnings Q1 2026: $4.04 billion ($2.34 per share)
• Earnings Q1 2025: $2.79 billion ($1.55 per share)
• Adjusted EPS: $2.44 per share
• Analysts’ expectations: $2.26 per share (adjusted)
• Dividend: $1.08 per share

TD Bank reported a substantial profit increase of 45% to $4.04 billion, attributed to strong performances across its various business divisions. The bank is also undergoing restructuring to address past compliance issues, which includes reducing its workforce and real estate footprint.

Despite these challenges, TD maintained a proactive approach by setting aside $1.04 billion for credit losses, reflecting its commitment to risk management amidst a changing economic landscape. Total revenue reached $16.56 billion, showcasing the bank's robust operational capabilities.

Comparative Analysis of the Big Banks

The earnings reports from these six banks provide a comprehensive overview of the Canadian banking sector's health. Key takeaways include:

• Profitability: All banks reported profits exceeding expectations, signaling a strong operational environment.
• Risk Management: Increased provisions for credit losses indicate a cautious approach to potential economic downturns.
• Growth Strategies: Banks like National Bank and BMO are focusing on acquisitions and restructuring to enhance profitability.

This analysis highlights the various strategies employed by each bank, allowing stakeholders to make informed decisions based on their performance and market positioning.