Canada’s big banks entered the third quarter under close watch, with analysts expecting a pullback in loan-loss provisions as fears over U.S. tariffs eased. After months of bracing for a harsher economic fallout from higher interest rates and trade tensions, lenders are now signalling that the damage may be less severe than initially thought. The shift in sentiment reflects growing confidence that tariffs will have a milder impact on credit quality. Bank of Montreal CEO Darryl White noted that business uncertainty tied to U.S. President Trump’s trade policies has begun to recede, underscoring a more stable backdrop for the sector heading into the latter half of the year.

BANK Holdings

Royal Bank of Canada (RY)

• EPS: $3.840 reported vs Bloomberg estimate of $3.245
• Revenue: $16.985B reported vs Bloomberg estimate of $16.082B

RBC delivered a strong fiscal third quarter, with net income rising 21% to $5.4-billion. Adjusted earnings of $3.84 per share topped analyst expectations. Provisions for credit losses came in at $881-million, up 34% year-over-year but well below the $1-billion analysts anticipated, and sharply lower than the $1.42-billion set aside last quarter amid peak tariff concerns. Growth was driven by robust performance in commercial banking and capital markets, where profit climbed 13% to over $1.3-billion. CEO Dave McKay cautioned that persistent trade tensions remain the key risk to the outlook, but highlighted strong revenue momentum across global markets and corporate banking.¹

Toronto-Dominion Bank/The (TD)

• EPS: $2.200 reported vs Bloomberg estimate of $2.054
• Revenue: $14.067B reported vs Bloomberg estimate of $13.783B

TD posted a fiscal third-quarter profit of $3.34-billion, compared with a loss a year ago tied to a US$3-billion regulatory fine. Adjusted earnings of $2.20 per share beat analyst expectations of $2.05, even after $595-million in restructuring charges related to U.S. asset sales and staffing reductions. TD’s Canadian retail banking profit rose 4% to $1.95-billion, while U.S. retail banking earned $760-million after last year’s loss, despite loan balances falling 7% under the regulatory cap. Wealth management and insurance surged 63% to $703-million, and wholesale banking gained 26% to $398-million. Provisions for credit losses totaled $971-million, below forecasts, underscoring improved credit performance.¹

Bank of Montreal (BMO)

• EPS: $3.230 reported vs Bloomberg estimate of $2.964
• Revenue: $8.988B reported vs Bloomberg estimate of $8.905B

BMO posted a strong fiscal third quarter, with profit rising 25% to $2.22-billion. Adjusted earnings reached $3.23 a share, ahead of analyst expectations. Results were supported by lower provisions for credit losses, which fell to $797-million from $906-million a year ago, as economic risks tied to tariffs eased. BMO also expanded its share buyback program to 30 million shares, up from 20 million, highlighting capital strength. Its Tier 1 capital ratio climbed to 13.5%. Analysts pointed to stronger credit performance and the enlarged buyback as key positives, reinforcing BMO’s momentum in returning capital to shareholders.¹

Bank of Nova Scotia/The (BNS)

• EPS: $1.880 reported vs Bloomberg estimate of $1.731
• Revenue: $9.486B reported vs Bloomberg estimate of $9.317B

Scotiabank opened Canadian bank earnings season with a stronger-than-expected quarter, reporting profit of $2.53-billion. Adjusted earnings of $1.88 a share beat analyst forecasts of $1.73. Revenue growth and lower credit-loss provisions supported results, with return on equity rising meaningfully year-over-year. While Canadian banking earnings slipped 2% to $958-million, strength came from capital markets, up 29% to $473-million, and wealth management, up 14% to $417-million. CEO Scott Thomson highlighted share buybacks and balance sheet strength. The quarterly dividend was held steady at $1.10 per share, following a recent increase. Provisions for credit losses fell slightly to $1.04-billion.¹

Canadian Imperial Bank of Commerce (CM)

• EPS: $2.160 reported vs Bloomberg estimate of $2.002
• Revenue: $7.254B reported vs Bloomberg estimate of $7.034B

CIBC delivered a strong fiscal third quarter, with profit rising 17% to $2.1-billion. Adjusted earnings of $2.16 topped analyst expectations of $2.00. Results were fuelled by an 87% jump in capital markets profit to $540-million on robust trading revenue, while Canadian personal and business banking earnings climbed 17% to $812-million. Provisions for credit losses totaled $559-million, below forecasts and down from last quarter’s peak, signalling easing tariff concerns. CIBC maintained its quarterly dividend at 97 cents and announced a 2.2% share buyback. The strong results come ahead of a leadership change, with Harry Culham set to succeed Victor Dodig as CEO in November.¹

Manulife Financial Corp (MFC)

• EPS: $0.950 reported vs Bloomberg estimate of $0.967
• Revenue: $15.637B reported

Manulife Financial reported a strong second quarter, with net income rising to C$1.79-billion, up from C$1.04-billion a year earlier. Results were powered by Asia, where core earnings climbed 13% to US$520-million, supported by business growth, favourable claims, and strong new business momentum. Annual premium equivalent surged 15%, underscoring Asia’s role as a key driver. Wealth and asset management also delivered, with earnings up 19% to C$463-million. Manulife announced it will acquire 75% of Comvest Credit Partners for US$937.5-million, expanding its private credit platform. Despite underperforming rival Sun Life year-to-date, Manulife’s earnings highlight growing strength across core businesses.²

National Bank of Canada (NA)

• EPS: $2.680 reported vs Bloomberg estimate of $2.702
• Revenue: $3.449B reported vs Bloomberg estimate of $3.482B

National Bank posted a fiscal third-quarter profit of $1.07-billion, up from $1.03-billion last year. Adjusted earnings held steady at $2.68 per share, just shy of analyst expectations of $2.70. Revenue climbed to $3.45-billion from $3-billion, supported by strength across business lines. Personal and commercial banking net income edged up to $370-million, while wealth management jumped 12% to $244-million. Financial markets rose 5% to $334-million, and U.S. specialty finance and international surged 13% to $178-million. Provisions for credit losses increased to $203-million from $149-million. The bank also unveiled plans for a new buyback program of up to eight million shares.¹

Sun Life Financial Inc (SLF)

• EPS: $1.790 reported vs Bloomberg estimate of $1.710
• Revenue: $9.199B reported

Sun Life Financial reported stronger second-quarter results, with profit rising to $716-million, up from $646-million a year earlier, fuelled by record underlying income in its Asia business. Adjusted EPS of $1.79 narrowly topped analyst expectations. Growth was led by Asia’s protection and wealth operations, which offset softer results in U.S. markets. Group health and protection earnings rose 7% to $326-million, while individual protection slipped 10% to $299-million. Wealth and asset management income held steady at $455-million. CEO Kevin Strain highlighted Asia as a key driver of momentum. The company also announced David Healy will succeed Dan Fishbein as President of Sun Life U.S. on September 1, 2025.³

Great-West Lifeco Inc (GWO)

• EPS: $1.240 reported vs Bloomberg estimate of $1.162
• Revenue: $10.772B reported

Great-West Lifeco reported record base earnings in the second quarter, highlighting strong capital deployment and shareholder returns. Base earnings rose 11% from last year to more than $1.1-billion, or $1.24 per share, while base ROE reached 17.4%. Net earnings came in at $894-million, or 96 cents per share, down 11% year-over-year. The insurer maintained a robust balance sheet with a LICAT ratio of 132%, $2.1-billion in cash, and book value per share up 8% to $27.38. Great-West repurchased 6.3 million shares for $321-million in Q2 and announced plans for an additional $500-million in buybacks through 2025, underscoring its focus on returning capital to shareholders.⁴

Power Corp of Canada (POW)

• EPS: $1.380 reported vs Bloomberg estimate of $1.289
• Revenue: $12.350M reported

Power Corporation of Canada reported solid second-quarter results, with net earnings from continuing operations rising to $772-million, up from $730-million a year earlier. Adjusted net earnings climbed to $883-million, or $1.38 per share, while adjusted net asset value per share increased to $64.76. Book value per share also edged higher to $35.90. The company highlighted a 21% increase in the valuation of Wealthsimple to $2.7-billion, reflecting strong business momentum. Subsidiaries also delivered strong results: Great-West Lifeco posted 11% adjusted earnings growth and announced an additional $500-million in buybacks, while IGM Financial’s adjusted earnings rose 15% with record AUM of $283.9-billion. Power repurchased 4.4 million shares for $209-million in Q2.⁵

 

Sources:

1. https://www.theglobeandmail.com/business/article-canada-banks-earnings-third-quarter-2025-tariffs/ (August 27, 2025)
2. https://www.theglobeandmail.com/business/article-manulife-posts-higher-quarterly-profit-boosted-by-asia-unit-strength/ (August 6, 2025)
3. https://www.theglobeandmail.com/business/article-sun-life-posts-rise-in-quarterly-profit-on-strong-asia-unit/ (August 7, 2025)
4. https://www.greatwestlifeco.com/content/dam/gwlco/documents/reports/2025/q2/lifeco-q2-2025-earnings-release.pdf (August 5, 2025)
5. https://www.powercorporation.com/en/news/press-releases/2025/power-corporation-reports-second-quarter-2025-financial-results-122681/ (August 7, 2025)

 

Source for estimated and reported EPS and Revenue data: Bloomberg, as at August 27, 2025. Figures in USD. 

Source: Getty Images Credit: Javier Ghersi

DISCLAIMER

Published September 3, 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.

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