Top Canadian banks to see stable NII, easing credit concerns in 2025, brokerage says
** Brokerage National Bank of Canada sees easing credit worries and stable net interest income (NII) - difference between earnings on loans and payouts on deposits - for the country's largest lenders in 2025
** Expects Bank of Montreal BMO.TO and Bank of Nova Scotia BNS.TO to have the biggest EPS upside potential next year
** Banks have forecast largely stable NII with upward potential at Canadian Imperial Bank of Commerce CM.TO and Scotiabank, brokerage adds
** Analysts expect easing competition for deposits, acceleration of commercial loan growth and securities repricing to offset a hit from lower interest rates
** "The Big-6 have outperformed the market by ~150 bps this year. However, if we exclude TD (Toronto-Dominion TD.TO) from the mix, the group has actually outperformed by around 800 bps, with a surge in second half performance" - National Bank
** Earlier this month, TD warned of a challenging 2025 and suspended its medium-term earnings forecast after pleading guilty to violating a U.S. federal law and agreeing to pay over $3 bln in penalties
** National Bank adds Canadian bank stocks have been buoyed by rate cuts, de-intensification of regulatory capital requirements and the outcome of the U.S. election
Here is how Canada's largest banks have performed so far this year:
Bank | Stock performance YTD | Market value |
|---|---|---|
Royal Bank of Canada RY.TO | +32% | C$251.76 billion |
Toronto-Dominion | -12.2% | C$132.12 billion |
Bank of Montreal | +7.15% | C$102.99 billion |
Bank of Nova Scotia | +21.5% | C$97.58 billion |
CIBC | +47.5% | C$89.33 billion |
National Bank NA.TO | +31.3% | C$45.37 billion |
Reporting by Manya Saini in Bengaluru
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
