The ‘Goldilocks’ period for Canadian banks, characterised by unusually benign credit, has come to an end, ushering in a period of normalisation. And after a remarkably stable three years, headwinds have started blowing in the Canadian economy.
For now, it is a breeze rather than a gale, but Canada’s biggest banks have not been spared. The third-quarter earnings for 2019 of Canada’s big six reflect that, with three – Bank of Montreal (BMO), Toronto-Dominion Bank (TD Bank) and Royal Bank of Canada (RBC) – falling short of analysts’ expectations. Overall, the group’s collective net income exceeded C$12bn ($9bn), up 3.7% year on year in the quarter ending July 31, but was flat sequentially.
