Wrapup 3: Canada's big banks BMO, Scotiabank, National beat profit estimates

National Bank of Canada

27/05/2026 12:44

(Adds details in paragraphs 6-7 from National Bank call, updates
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        *    Three banks kick off Q2 earnings      

        *    All three banks beat adjusted earnings estimates     

        *    Earnings driven by strength in the domestic, capital
markets business     

        *    CEOs encouraged by Canada's undertaking of major
projects      

  
    By Nivedita Balu and Arasu Kannagi Basil
       May 27 (Reuters) - Canadian banks BMO Financial
 BMO.TO , Bank of Nova Scotia  BNS.TO  and National Bank of
Canada  NA.TO  on Wednesday beat analysts’ estimates for
quarterly profits, strengthened by domestic business and capital
markets income, while signaling an optimistic outlook for Canada
despite tensions in the Middle East. 
    The three banks are the first to report for the quarter, in
which big lenders faced continued uncertainty from U.S.-Canada
trade tensions, as well as broader economic challenges from the
Middle East conflict and higher commodity prices weighing on
consumer wallets.
    "I'm actually relatively optimistic about the outlook for
Canada, despite the war ... We're an oil-exporting nation,
you've got a new business-friendly government that is trying to
get things done," Scotiabank CEO Scott Thomson told analysts.
    "You've seen a lot of foreign money leave Canada, and now
you have a lot of foreign money looking at Canada for foreign
direct investment," he said. Canadian pension funds are also
investing more domestically, he said.
    BMO's CEO Darryl White said clarity on U.S.-Canada trade and
new infrastructure investments could drive a stronger growth
outlook in the medium term, but the Canadian economy remains
mixed amid inflation and employment challenges.
    National Bank CEO Laurent Ferreira said there was a lull in
business investment, but added he was encouraged by the
government's focus on infrastructure projects.
    "This uncertainty could further impact business investment
... but if we look beyond the near term, Canada is well
positioned to benefit from ongoing efforts to reindustrialize
our economy," Ferreira told analysts.
    The big banks, which control over 90% of the market, tend to
benefit from key projects and also play a role on the advisory
side.
    For the quarter, Scotiabank’s domestic retail business grew
53%, benefiting from growth in personal day-to-day and savings
deposits and a 3% rise in loans. At BMO, earnings were supported
by strong fee-driven income at its capital markets segment,
where adjusted net income grew 46%. National Bank's profit was
helped by an 18% rise in earnings in both personal banking and
wealth management.
     
    CHALLENGES REMAIN
    Canadian banks, renowned for their resilience, have built
strong reserves underpinned by robust regulatory oversight,
diversified their businesses and maintained conservative lending
practices, allowing them to withstand challenges that have
gripped the global banking industry.
    Still, the banks are preparing for uncertainty by putting
aside large chunks of money for potentially souring loans to
shield their profits. Scotiabank's loan loss provisions stood at
C$1.22 billion ($881.95 million), while analysts had projected
C$1.11 billion, according to LSEG data. BMO recorded provisions
of C$739 million, compared with estimates of C$787 million.
National Bank's provisions of C$233 million were lower than the
estimate of C$255 million. 
    BMO's Chief Risk Officer Piyush Agrawal said there is
pressure building with delinquency rates rising, but the lender
was working with consumers to help them. Scotiabank executives
said high energy costs, trade uncertainty, and higher
unemployment are pressuring both consumers and businesses.  
    "There is resilience, yes. But does that continue?" Michael
Dehal, a senior portfolio manager at ​Dehal Investment Partners
at Raymond James said, pointing to Equifax data that showed
insolvency volumes have increased to levels not seen since 2009.
"I think that's where you're going to see cracks with these
banks performing going forward." 
    BMO, the country's third-largest bank by market
capitalization, recorded adjusted earnings of C$3.67 per share,
compared with the average analysts' estimate of C$3.45.
Scotiabank reported earnings of C$2.02 per share, comfortably
beating the estimate of C$1.94, while National Bank's earnings
of C$3.23 beat the estimate by 10 Canadian cents.
    Scotiabank shares were up 1% in Toronto and BMO was
marginally up. National Bank's shares were down 2.4%.
     
    ($1 = 1.3833 Canadian dollars)

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(Reporting by Arasu Kannagi Basil, Pritam Biswas, Pragyan Kalita
in Bengaluru and Nivedita Balu in Toronto; Editing by Jonathan
Ananda, Chizu Nomiyama, Rod Nickel)
((Nivedita.Balu@thomsonreuters.com ; +1-343-401-6776))