Big Six Q2 earnings week: all six beat, five raised dividends, capital markets drive profits
Key Questions
How did Canada's Big Six banks perform in Q2 earnings?
All six banks—BNS, BMO, NA, RY, TD, and CIBC—beat expectations. Capital markets profits rose 27% and contributed significantly to results.
Which banks raised dividends after Q2 earnings?
Five of the six banks increased dividends: RBC by 7%, TD to $1.12, BMO to $1.71, NA to $1.32, and BNS also raised its payout. RBC additionally announced a share buyback.
Are Canadian bank stocks overvalued after their recent gains?
Analysts note overvaluation with TD trading at 16x earnings, CIBC at 15.5x, and yields below 4%. RY's DCF intrinsic value is estimated at $172 versus its $200 price, supporting a trim-don't-sell approach.
What new risks are facing Canadian banks?
Credit stress is building despite TD's PCLs coming in below expectations. Uncertainty around CUSMA ratification adds a macro headwind for future earnings and dividend growth.
What is the long-term outlook for Canadian banks?
Articles highlight the sector's boring resilience and 194-year track record of stability. BMO expressed optimism for 2027 profitability, reinforcing the thesis of reliable long-term dividend growth.
Q2 earnings week complete: BNS, BMO, NA (Wed) and RY, TD, CIBC (Thu) all beat expectations. Capital markets profits surged 27%. Five of six banks raised dividends (RBC +7%, TD to $1.12, BMO to $1.71, NA to $1.32, BNS raised). RBC announced buyback. Credit stress building but TD's PCLs came in below expectations. Post-earnings analysis notes overvaluation (TD at 16x, CIBC 15.5x, yields below 4%), reinforcing trim-don't-sell. RY DCF intrinsic $172 vs $200. A new contrarian article notes P/E multiples haven't budged. TD Asset Management piece questions rally sustainability. OSFI cut DSB to 3.0% effective Oct 31. New risk: CUSMA uncertainty (Carney signals no signing) adds macro headwind for bank earnings and dividend growth. A recent article reinforces the 'boring resilience' of Canadian banks, supporting the long-term dividend stability thesis. Today's reading included a BMO article expressing optimism for 2027, contrasting with the sluggish economy narrative but not changing the overall picture.