Three major Canadian banks expressed cautious optimism about the economy on Thursday, in contrast to the concerns voiced by numerous small businesses navigating the challenges of a full-scale trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC unveiled their financial results before the Toronto Stock Exchange’s opening bell. Combined, these banking giants hold assets worth up to $6 trillion on their balance sheets. With extensive portfolios covering mortgages, auto loans, and other debt products, along with client networks across Canada and the U.S., these banking behemoths have a unique perspective to assess the impact of tariffs.
RBC CEO Dave McKay highlighted the resilience of the Canadian economy, citing improvements in employment and GDP in Q2 as reasons for a cautiously optimistic outlook on continued economic expansion. Meanwhile, TD Bank CEO Raymond Chun referred to a potential “super cycle” of investment in Canada driven by government spending on infrastructure and national defense projects. CIBC CEO Harry Culham expressed measured confidence about the latter half of the year, emphasizing a need for vigilance as the trade environment evolves.
BMO Capital Markets projected that the latest U.S. tariffs could trim approximately half a percentage point from Canadian growth, mainly due to weakened business confidence and investment. The CEOs of Bank of Montreal and Scotiabank separately indicated that they view the Canada-U.S. trade war as manageable. Despite these challenges, shares of Canada’s major banks on the Toronto Stock Exchange remain close to record highs, with the BMO Equal Weight Banks Index ETF surging nearly 50% over the past year.