Big Six Banks Crush Estimates with Record Q1 Earnings Growth

Canada’s largest banks delivered a clean sweep of earnings beats in their first quarter reports, signaling resilience despite trade war fears and Middle East tensions. All six major lenders posted higher profits than analysts expected, driven by strength across retail banking, capital markets, and wealth management divisions.

Royal Bank of Canada led with record net income of $5.79 billion, up 13 percent from last year. Adjusted earnings per share hit $4.08, crushing the $3.84 consensus. Return on equity reached 17.6 percent, the highest among the Big Six. Wealth management and capital markets both contributed meaningfully as higher market levels boosted fee-based revenue. RBC’s Common Equity Tier 1 ratio rose to 13.7 percent, reinforcing its capital strength.

Toronto-Dominion Bank posted the most dramatic turnaround with net income jumping 45 percent to $4.04 billion. The bank earned $2.44 per share on an adjusted basis, topping the $2.26 estimate. TD took a final $200 million restructuring charge tied to its anti-money-laundering remediation efforts, but the cleanup appears largely complete. Strong performance across all business lines drove the beat, including improved U.S. retail operations.

CIBC added $3.1 billion in profit, rising 43 percent year-over-year. Revenue climbed 15 percent to $8.4 billion with record results across all operating segments. BMO Financial earned $2.49 billion, beating forecasts with adjusted EPS of $3.48 versus the $3.21 estimate. The bank is targeting a 15 percent return on equity as it reshapes its U.S. footprint.

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Credit quality remains the key variable for 2026. Banks increased provisions for credit losses slightly, reflecting cautious outlooks for consumer stress in markets like the Greater Toronto Area. RBC reserved $1.09 billion while other lenders flagged higher retail losses through the year.

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Investors should watch for any deterioration in loan performance, particularly in over-leveraged housing markets where affordability pressures continue to mount.