Wrapup 3: Canada's RBC, TD and CIBC top profit estimates on domestic strength

Royal Bank of Canada

28/05/2026 12:48

(Adds shares in paragraph 9)

        *    Big six banks beat profit estimates despite
uncertainity     

        *    Consumers remain resilient, executive says      

        *    CIBC to divest majority stake in Caribbean unit     

  
    By Nivedita Balu and Pritam Biswas
       May 28 (Reuters) - Canadian lenders Royal Bank of Canada
 RY.TO , TD Bank  TD.TO  and CIBC  CM.TO  on Thursday beat
second-quarter profit estimates, helped by strong domestic
growth and bucking concerns arising from trade uncertainty and
the impact of Middle East conflicts on the economy.
The six large banks, which dominate the Canadian banking
landscape, all surpassed analysts’ estimates for second-quarter
profits, navigating a challenging economic landscape hit by
higher commodity prices that have weighed on consumers’
finances. 
    “At this point of the cycle, and with inflation, that is for
sure putting pressure on consumers, but if you look at our PCL…
it is below the midpoint (of our expectation), so that means
that the consumer continues to be resilient, even though there's
pressure,” TD Bank’s CFO Kelvin Tran said in an interview.  
    “The way to not get into trouble is actually thinking about
it when you underwrite the loans at the beginning,” he said.
However, the near-term outlook for Canada hinges on U.S-Canada
trade talks and how long the Middle East conflict persists,
which will have an impact on client demand, supply chain
stability, and the direction of monetary policy, bank executives
said.
    "So far, weakness in tariff-exposed sectors has not spread
to the broader economy... However, uncertainty remains
elevated," RBC CEO Dave McKay said.
    STRONG EARNINGS 
    The banks reported income growth at their personal banking
segments in Canada, the segment most exposed to consumer
wallets, and benefited from loan growth or lower loan loss
provisions from a year ago when trade disruptions had weighed on
performing loans. 
    However, some banks have also added performing reserves to
reflect ambiguity around the duration of the Middle East
conflict. CIBC recorded a rise in Canadian consumer losses.
That, paired with weaker net interest margin sent the stock down
5%. Shares of RBC and TD, which have outpaced the broader
exchange this year, were also down.
  
    Personal banking segments grew 17% and 15% at RBC and CIBC,
while commercial banking rose 43% and 12%, respectively. At TD,
that business grew 15%. Capital markets earnings rose between
23% and 46%.  
    RBC's adjusted earnings of C$3.90 per share topped average
analysts' estimates of C$3.78, according to LSEG data. TD's
earnings of C$2.38 beat estimates of C$2.26, while CIBC's
earnings of C$2.54 per share comfortably beat the estimate of
C$2.44. 
     
     
    CIBC SELLS CARIBBEAN UNIT
    CIBC said it would sell 91.7% of its stake in CIBC Caribbean
to Bermuda-based Bank of N.T. Butterfield & Son  NTB.N  for
about $1.6 billion, as the Canadian lender prioritises its North
American business.
    The move would consolidate CIBC's business within the North
American corridor, a region that has been largely preferred by
the Canadian banks for growth prospects. 
    Earlier this month, CIBC agreed to buy a minority stake in
U.S. health management firm Ampersand Partners, growing its
exposure south of the border. 
  
    Scotiabank  BNS.TO  in 2023 laid out a fresh plan under its
new CEO to focus on the North American trade region and exit
some unprofitable businesses in South America. Since then, the
bank has sold some businesses in Colombia and Costa Rica and
bought a stake in U.S.-based regional bank KeyCorp. 
    CIBC said its deal includes $1 billion in cash and the rest
will be paid with Butterfield’s shares and is expected to close
in the first half of 2027.  
    Once the deal closes, RBC and Scotiabank will be the only
two Canadian lenders with exposure to the region.
     
    ($1 = 1.3861 Canadian dollars)

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Segment growths in Canada's top lenders    https://www.reuters.com/graphics/BANK-SEGMENT/dwpkywnmkpm/chart.png
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(Reporting by Pritam Biswas, Utkarsh Shetti in Bengaluru and
Nivedita Balu in Toronto; Editing by Jonathan Ananda and Chizu
Nomiyama)
((mailto:Pritam.Biswas@thomsonreuters.com;))