- CIBC (TSX:CM) reported strong third-quarter results with adjusted net income rising 26 per cent year-over-year, driven by growth across its Canadian banking, U.S. banking and Capital Markets businesses
- TD Bank (TSX:TD) delivered a sharp earnings increase with adjusted net income up 21 per cent year-over-year, supported by record results in its Canadian operations, Wealth Management and Wholesale Banking segments
- RBC (TSX:RY) posted record quarterly earnings of $C6.0 billion as strong performance in Wealth Management, Capital Markets and Commercial Banking more than offset higher credit-loss provisions
- CIBC stock (TSX:CM) last traded at C$118.20 TD Bank stock (TSX:TD) last traded at C$165.87 and RBC stock (TSX:RY) last traded at C$288.11
A marathon earnings session for Canadian lenders wraps up on Thursday.
CIBC (TSX:CM), Royal Bank of Canada (TSX:RY) and Toronto-Dominion Bank (TSX:TD) reported their Q3 earnings, offering investors insight into profitability, lending growth, and the outlook for Canada’s banking sector.
Canada’s big banks have largely shrugged off challenges ranging from tariff uncertainty to weak economic growth and a lacklustre housing market recovery. Their resilience has fuelled gains in bank stocks, setting a higher bar for earnings and making it tougher to impress Bay Street investors.
This article is a journalistic opinion piece that has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Among the first banks to report, CIBC delivered double-digit earnings growth, while RBC posted record quarterly profit and TD reported a sharp rebound in earnings, highlighting the continued strength of Canada’s banking sector despite a still uncertain economic backdrop.
CIBC earnings climb as capital markets and core banking businesses deliver
CIBC reported third-quarter revenue of C$8.37 billion, up 15 per cent year-over-year and 5 per cent from the previous quarter. Reported net income rose 15 per cent to C$2.41 billion, while adjusted net income increased 26 per cent to C$2.65 billion.
Adjusted diluted earnings per share came in at C$2.73, up 26 per cent from a year earlier and ahead of the bank’s reported EPS of C$2.47, which was impacted by charges related primarily to the announced sale of CIBC Caribbean Bank Limited.
The quarter included C$269 million in charges tied to the Caribbean divestiture and an additional C$10 million in acquisition-related intangible amortization, resulting in a combined negative impact of C$0.26 per share.
CIBC Chief Executive Officer Victor Dodig pointed to broad-based strength across the bank’s operations, particularly in Canadian banking and capital markets.
Canadian Personal and Business Banking generated net income of C$948 million, up 17 per cent from a year ago, helped by loan growth and higher net interest margins.
Canadian Commercial Banking and Wealth Management earned C$619 million, rising 4 per cent year-over-year as stronger commercial banking activity and growing wealth management assets boosted revenue.
In the United States, Commercial Banking and Wealth Management reported net income of C$320 million, up 26 per cent from the prior year, benefiting from lower credit loss provisions and continued business growth.
The standout performer was Capital Markets, where net income surged 34 per cent to C$722 million. Strong equity trading and financing activity, coupled with solid corporate lending revenue, drove the increase.
Credit quality remained relatively stable. CIBC reported provisions for credit losses of C$564 million, only modestly higher than a year ago. The quarter benefited from a reversal on performing loans due to an improved economic outlook and the release of reserves related to a U.S. commercial real estate loan sale.
The bank ended the quarter with a robust Common Equity Tier 1 (CET1) ratio of 13.4 per cent.
Beyond its financial results, CIBC highlighted several artificial intelligence initiatives, including the launch of CAI 2.0, described as Canada’s first enterprise-wide agentic AI workspace in banking, and CIBC AdvisorAssist, a proprietary AI tool designed to improve advisor productivity.
RBC delivers record quarterly profit
Royal Bank of Canada reported a record C$6.0 billion in net income for the quarter ended July 31, up 11 per cent from the same period last year. Diluted earnings per share rose 13 per cent to C$4.23, while adjusted earnings reached C$6.1 billion, also a record.
RBC’s results were driven by strong performances in Wealth Management, Capital Markets and Commercial Banking.
The bank generated record pre-provision, pre-tax earnings of C$8.7 billion, up 13 per cent from a year ago. Wealth Management benefited from higher markets and growing client assets, while Capital Markets posted gains across corporate and investment banking as well as global markets.
Wealth Management was RBC’s fastest-growing major business segment. Net income jumped 32 per cent to C$1.44 billion, fueled by market appreciation, strong net sales and higher deposit and loan balances.
Capital Markets earned C$1.54 billion, up 16 per cent from a year earlier. The increase reflected stronger equity and debt underwriting, higher merger-and-acquisition activity and solid equity trading performance across global markets.
Commercial Banking also posted healthy growth, with net income rising 12 per cent to C$936 million, helped by strong loan and deposit growth alongside lower credit losses.
Personal Banking remained resilient, earning C$1.92 billion, although profit slipped slightly from a year ago due to higher operating expenses and increased provisions for credit losses.
Credit costs increased but remained manageable. Total provisions for credit losses rose 14 per cent year-over-year to C$1.0 billion, driven primarily by Personal Banking and Capital Markets. RBC’s PCL ratio stood at 36 basis points, only one basis point higher than a year ago.
RBC maintained a strong capital position with a CET1 ratio of 13.5 per cent and returned C$4.0 billion to shareholders during the quarter through dividends and share buybacks.
TD reports strong rebound with record Canadian and Wholesale Banking earnings
TD Bank Group reported third-quarter net income of C$4.62 billion, a substantial increase from C$3.34 billion a year earlier. Adjusted earnings rose 21 per cent to C$4.67 billion.
Reported diluted EPS climbed to C$2.74, compared with C$1.89 in the prior-year period, while adjusted EPS increased 26 per cent to C$2.77.
CEO Raymond Chun described the quarter as “very strong,” citing record earnings in Canadian operations and Wholesale Banking, along with improving momentum in the United States.
Canadian Personal and Commercial Banking posted net income of C$2.10 billion, up 7 per cent year-over-year as revenue increased 5 per cent to C$5.52 billion. Growth was driven by stronger loan and deposit volumes and improved margins.
The bank’s U.S. Banking segment earned C$1.07 billion (USC$771 million), up 41 per cent on a reported basis from a year ago. Management highlighted positive loan growth, improving returns and continued balance-sheet optimization.
Wealth Management and Insurance generated record earnings of C$841 million, an increase of 20 per cent, as assets under management reached all-time highs and insurance premiums grew.
Wholesale Banking was TD’s strongest-performing division. Net income surged 87 per cent to C$743 million, supported by record revenue, strong client activity and lower provisions for credit losses.
TD’s Common Equity Tier 1 ratio stood at a sector-leading 14.3 per cent, providing significant flexibility for future growth and shareholder returns.
Investors watching for sector-wide trends
As this wave of earnings reports washes up on investor watchlists, several themes are emerging across the Canadian banking sector. Wealth management businesses continue to benefit from higher equity markets, capital markets divisions are experiencing strong client activity, and net interest margins are showing signs of stabilization.
At the same time, banks remain cautious about credit quality. While provisions for credit losses remain elevated compared with historical lows, the increases have generally been manageable and are being offset by stronger revenue growth.
A Q3 for the books
This wraps up a marathon week for Canadian banks logging Q3 financial reports, which saw National Bank of Canada (TSX:NA) income of C$1.31 billion, up 23 per cent year-over-year, with diluted earnings per share rising 26 per cent to C$3.25. Meanwhile, BMO’s (TSX:BMO) adjusted profit rose 19 per cent, driven by strong capital markets performance and growth in its Canadian and U.S. banking businesses. Scotiabank’s (TSX:BNS) profit increased as higher net interest income, record wealth management earnings, and strong capital markets results boosted revenue.
About the banks
Canadian Imperial Bank of Commerce offers a range of advice, solutions and services across Canada, in the United States and around the world.
The Toronto-Dominion Bank’s segments include Canadian personal and commercial banking, which provides financial products and services to personal, small business and commercial customers.
Royal Bank of Canada is one of the largest banks in the world, based on market capitalization, and has a diversified business model. Its segments include personal and commercial banking, wealth management, insurance and capital markets.
CIBC stock (TSX:CM) last traded at C$118.20 TD Bank stock (TSX:TD) last traded at C$165.87 and RBC stock (TSX:RY) last traded at C$288.11. All of these stocks have risen between 20 to 30 per cent since the year began.
Join the discussion: Find out what everybody’s saying about these bank stocks at the Royal Bank of Canada Bullboard, CIBC Bullboard, and the TD Bank Bullboard, then check out other hot topics about stocks at Stockhouse’s stock forums and message boards.
