The second-quarter earnings season for Canada’s big six banks was dominated by caution, as all lenders increased provisions for potential loan defaults amid growing economic uncertainty. While TD, BMO, National Bank, and CIBC beat analyst expectations, RBC and Scotiabank fell short, weighed down by higher credit loss reserves. The results reflect concerns over slower growth and rising unemployment, even as capital markets strength and loan income helped boost earnings at several banks.

Canada’s top lifecos reported strong results, powered by growth in retirement, wealth, and asset management—especially in the U.S. and Asia. Core earnings remained solid, digital and AI investments accelerated, and capital was actively redeployed through buybacks, M&A, and dividend hikes. Despite market uncertainty, the group remains well-capitalized and focused on high-growth, capital-efficient segments.

BANK Portfolio Holdings

Royal Bank of Canada (RY)

• EPS: $3.120 reported vs Bloomberg estimate of $3.181
• Revenue: $15.672B reported vs Bloomberg estimate of $15.679B

“We saw the strength of our diversified business model reflected across our largest segments in Q2, underpinned by our robust capital position, balance sheet strength and prudent, through-the-cycle approach to risk management. Importantly, in a quarter hallmarked by macroeconomic uncertainty and market volatility, Team RBC continued to step up for our clients with the advice, insights and experiences they expect from us”… – Dave McCay, CEO.¹

RBC posted higher earnings but fell short of analyst expectations. The bank reported net income of $4.39 billion, up 11% from a year earlier. Adjusted earnings, came in at $3.12 per share—missing the $3.18 analysts had forecast. RBC raised its quarterly dividend by 6 cents to $1.54 per share and announced plans to repurchase 35 million shares. Provisions for credit losses rose to $1.42 billion, up from $920 million last year, including $568 million for performing loans, reflecting a more cautious stance amid economic uncertainty. Despite the miss, the quarter showed continued strength in core operations. RBC is also implementing a return-to-office policy, requiring employees to be in the office four days a week starting this fall. ²

Toronto-Dominion Bank/The (TD)

• EPS: $1.970 reported vs Bloomberg estimate of $1.777
• Revenue: $13.734B reported vs Bloomberg estimate of $13.434B

“TD delivered strong results this quarter, with robust trading and fee income in our markets-driven businesses as well as deposit and loan growth in Canadian Personal and Commercial Banking.”… –  Raymond Chun, CEO. ³

TD delivered strong results, beating analyst expectations with solid earnings and more conservative credit loss provisions. The bank set aside $1.34 billion for potential loan losses—lower than expected—including $395 million for performing loans based on economic forecasts. While overall provisions rose from $1.07 billion a year ago, impaired loan provisions declined, highlighting the relative strength of TD’s loan portfolio. The bank is also cutting its workforce by 2% as part of a cost-saving initiative and to address gaps in its anti-money-laundering practices. TD reported a headline profit of $11.1 billion, fueled by the sale of its stake in Charles Schwab. On an adjusted basis, earnings came in at $1.97 per share, topping analyst expectations of $1.78. The quarter showcased TD’s strong fundamentals and cautious positioning amid an uncertain economic backdrop. ⁴

Bank of Montreal (BMO)

• EPS: $2.620 reported vs Bloomberg estimate of $2.535
• Revenue: $8.679B reported vs Bloomberg estimate of $8.713B

“This quarter, we delivered strong revenue and pre-provision, pre-tax earnings growth across each operating group and ongoing positive operating leverage. Impaired credit provisions moderated again this quarter as expected, while we bolstered performing allowances. We’re executing against our plan to rebuild return on equity, including actions to optimize our balance sheet and invest for growth.”… – Darryl White, CEO. ⁵

BMO delivered a solid quarterly performance, with profit beating analyst expectations despite setting aside more funds for potential loan defaults. The bank reported net income of $1.96 billion, up from $1.87 billion a year earlier. On an adjusted basis, earnings came in at $2.62 per share, topping the $2.54 expected. BMO raised its quarterly dividend by 4 cents to $1.63 per share. Provisions for credit losses climbed to $1.05 billion—up from $705 million last year—including $289 million for performing loans, reflecting increased risk in Canadian commercial and unsecured consumer lending. While higher provisions were a headwind, strong top-line growth helped offset the impact: revenue rose 9% to $8.68 billion, while expenses grew 4% to $5.02 billion, largely due to higher staffing and technology costs. The results highlight BMO’s earnings strength and its proactive stance amid a softening credit environment. ⁶

Bank of Nova Scotia/The (BNS)

• EPS: $1.520 reported vs Bloomberg estimate of $1.556
• Revenue: $9.080B reported vs Bloomberg estimate of $9.029B

…“Amidst the continuously-evolving economic outlook, we are focused on what we can control and are executing on our strategic plan while continuing to deliver positive operating leverage. This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook. 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.” – Scott Thompson, CEO. ⁷

Scotiabank reported a weaker-than-expected quarter, with earnings falling short of analyst estimates as it significantly boosted loan loss provisions amid rising credit risks among Canadian consumers and businesses. The bank set aside $1.4 billion in provisions for credit losses, up from $1 billion a year ago and well above expectations. Net income fell 3% year-over-year to $2.03 billion, while adjusted earnings came in at $1.52 per share, missing the $1.56 consensus. The hit was most evident in the Canadian banking division, where profit plunged 31% to $613 million, even as loan balances rose 4%. Despite the challenges, Scotiabank posted stronger results in its international, wealth management, and capital markets segments. The bank raised its quarterly dividend to $1.10 per share and announced plans to repurchase 20 million shares. ⁸

Canadian Imperial Bank of Commerce (CM)

• EPS: $2.050 reported vs Bloomberg estimate of $1.885
• Revenue: $7.022B reported vs Bloomberg estimate of $6.873B

…“The CIBC of today is a modern, relationship-oriented bank with a powerful organic growth engine across borders – driven by execution, guided by purpose, and fueled by our talented team and culture. We are navigating the volatility in the global business environment from a position of strength, supported by our robust capital position, disciplined risk management and strong credit quality.” – Victor G. Dodig, CEO. ⁹

CIBC reported a strong quarter, with profit rising and beating analyst expectations. The bank earned $2 billion, up 15% from the same quarter last year. Adjusted earnings came in at $2.05 per share, surpassing forecasts. CIBC set aside $605 million in provisions for credit losses—below analyst estimates, reflecting a more cautious economic outlook. Revenue climbed 14% to $7 billion, while expenses rose 9% to $3.8 billion, driven by higher performance-based compensation. In leadership news, CIBC announced that current capital markets head Harry Culham will become CEO in October. The quarter highlighted CIBC’s earnings momentum and prudent risk management as it transitions to new leadership. ¹⁰

Manulife Financial Corp (MFC)

• EPS: $0.990 reported vs Bloomberg estimate of $0.977

“We started the year with continued strong momentum, delivering record levels of insurance new business results this quarter. We generated double-digit growth in new business value across all insurance segments, led by Asia with a 43% increase year over year, demonstrating broad-based strength in our top-line results.”… – Roy Gori, CEO. ¹¹

Manulife reported core earnings of $1.8 billion over the quarter, with core EPS up 3%. New business metrics were strong, with APE sales up 37% and new business value up 36%. The company launched a digital U.S. retirement platform, renewed its 15-year bancassurance partnership in the Philippines, and reinsured legacy blocks to free capital for share buybacks. It expanded product offerings, including new high-net-worth insurance in Asia and a U.S. ABS fund. Manulife also advanced AI tools to improve advisor support and customer engagement, and enhanced its Vitality wellness program with new health services and rewards. ¹²

National Bank of Canada (NA)

• EPS: $2.850 reported vs Bloomberg estimate of $2.402
• Revenue: $3.650B reported vs Bloomberg estimate of $3.290B

“The Bank delivered strong second quarter results, supported by solid organic growth in our business segments. We were also pleased to complete the acquisition of Canadian Western Bank during the quarter, marking a significant step forward in the acceleration of our domestic strategy and in extending the depth and reach of our banking capabilities for our clients.”… – Laurent Ferreira, CEO. ¹³

National Bank of Canada reported stronger-than-expected quarterly results, boosted by its capital markets business, even as it increased loan loss provisions. Net income dipped 1% year-over-year to $896 million, but adjusted earnings came in at $2.85 per share, well above the $2.40 analysts expected. The bank raised its quarterly dividend by 4 cents to $1.18 per share. National set aside $545 million in provisions for credit losses. Stripping out acquisition-related provisions, reserves were just above expectations, reflecting growing credit risk in the current economic environment. CEO Laurent Ferreira emphasized the bank’s strong capital position as a foundation for continued growth despite global uncertainty. Revenue surged 33% to $3.65 billion, while expenses rose 32% to $1.94 billion, driven by acquisition and integration costs. ¹⁴

Sun Life Financial Inc (SLF)

• EPS: $1.820 reported vs Bloomberg estimate of $1.711

“This quarter, we achieved strong top and bottom-line growth across all of our businesses, reflecting the trust and confidence our clients continue to place in Sun Life for their health and financial needs.”… – Kevin Strain, CEO. ¹⁵

Sun Life Financial reported record underlying earnings in the quarter, beating analyst expectations with $1.82 per share versus $1.71 forecasted. CFO Tim Deacon highlighted strong performance across all regions, with record results in Asia and solid growth in Canada and the U.S. The company’s asset management business was a key earnings driver. In Asia, Sun Life operates in eight markets, with developed regions like Hong Kong and India performing well, and scaling efforts underway in China and Southeast Asia. In the U.S., Sun Life sees potential benefits from lower drug prices, which could reduce insurance costs and expand access. The company raised its dividend to 88 cents and plans to reinvest in digital and AI, maintain a 40–50% dividend payout ratio, and pursue strategic M&A or buybacks to support long-term growth. ¹⁶

Great-West Lifeco Inc (GWO)

• EPS: $1.110 reported vs Bloomberg estimate of $1.134

“We delivered strong results in the first quarter, including double-digit base earnings growth in our Retirement and Wealth businesses.”… – Paul Mahon, CEO. ¹⁷

Great-West Lifeco reported strong results, with base earnings exceeding $1 billion, up 5% year-over-year, driven by double-digit growth in its Retirement and Wealth businesses. U.S. operations led performance, with base earnings up 13% and net earnings from continuing operations rising 32%. Total client assets surpassed $3 trillion, including $1 trillion in higher-margin assets. Wealth net flows grew across all markets, notably in Canada and the U.S., with Empower adding 270,000 new plan participants. Lifeco maintained a robust capital position with a 130% LICAT ratio and $2.5 billion in cash. Its diversified, capital-efficient business model and conservative investment approach continue to provide resilience, including minimal impact from weather-related insurance claims. ¹⁸

Power Corporation (POW)

• EPS: $1.220 reported vs Bloomberg estimate of $1.240

Power Corporation reported adjusted net earnings of $787 million, up from $710 million last year. It repurchased 3 million shares for $135 million. Subsidiary Great-West Lifeco delivered over $1 billion in adjusted earnings, led by strong Retirement and Wealth results. IGM Financial reported record-high assets under management and advisement at $275 billion, with earnings of $238 million. GBL’s net asset value was €15.4 billion, and it continued share buybacks. Sagard and GBL formed a strategic partnership with a €250 million investment plan, while Sagard also acquired a stake in BEX Capital. Power Sustainable launched a new decarbonization private equity strategy with US$330 million in commitments. ¹⁹

Sources:

1. https://www.rbc.com/investor-relations/_assets-custom/pdf/2025q2release.pdf (May 29, 2025)
2. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
3. https://www.td.com/content/dam/tdcom/canada/about-td/pdf/quarterly-results/2025/q2/2025-q2-earnings-newsrelease-en.pdf (May 22, 2025)
4. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
5. https://www.bmo.com/ir/qtrinfo/1/2025-q2/Q225_EarningsRelease.pdf (May 28, 2025)
6. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
7. https://www.scotiabank.com/content/dam/scotiabank/corporate/quarterly-reports/2025/q2/Q225_Quarterly_Press_Release-EN.pdf (May 27, 2025)
8. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
9. https://www.cibc.com/content/dam/cibc-public-assets/about-cibc/investor-relations/pdfs/quarterly-results/2025/q225newsrelease-en.pdf (May 29, 2025)
10. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
11. https://www.manulife.com/content/dam/corporate/en/documents/investors/MFC_QPR_2025_Q1_EN.pdf (May 7, 2025)
12. https://www.manulife.com/content/dam/corporate/en/documents/investors/MFC_QPR_2025_Q1_EN.pdf (May 7, 2025)
13. https://www.nbc.ca/content/dam/bnc/a-propos-de-nous/relations-investisseurs/resultats-trimestriels/2025/report-shareholder-q2-2025.pdf (May 28, 2025)
14. https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-2025/ (May 30, 2025)
15. https://www.sunlife.com/content/dam/sunlife/regional/global-marketing/documents/com/pa-e-q125-earnings.pdf (May 8, 2025)
16. https://www.sunlife.com/content/dam/sunlife/regional/global-marketing/documents/com/pa-e-q125-earnings.pdf (May 8, 2025)
17. https://www.greatwestlifeco.com/content/dam/gwlco/documents/press-releases/2025/lifeco-q1-2025-earnings-release.pdf (May 7, 2025)
18. https://www.greatwestlifeco.com/content/dam/gwlco/documents/press-releases/2025/lifeco-q1-2025-earnings-release.pdf (May 7, 2025)
19. https://www.powercorporation.com/media/uploads/reports/quarter/b2025-05-13-pcc-news-release-q1-final_AYfHBwN.pdf (May 13, 2025)

 

DISCLAIMER

Published June 9, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund (“BANK”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Leverage increases risk.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements contained herein are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Certain information contained in this document is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice.