RBC, National Bank, Scotiabank: A breakdown of the big banks’ fourth-quarter earnings so far

Canada’s biggest banks report their fourth-quarter earnings this week, covering the three months that ended Oct. 31, as the cost of borrowing drops and swaths of fixed-rate loans come up for renewal.

Analysts anticipate that the large banks’ fourth quarter bank earnings will begin the transition out of a year marked by rising loan loss provisions, higher expenses and muted profits – estimating that earnings could grow between 4 per cent to 11 per cent on average.

Analysts also expect that the banks’ fourth quarter could be the final slump in a year of muted loan growth before falling interest rates are expected to spur housing demand next year. More than half of all Canadian mortgages are renewing in 2025 and 2026, and that changing landscape could thrust the country’s banking sector into a mortgage war.

“Although payment shock is declining, a significant proportion of mortgagors will still have higher mortgage payments – creating a strong incentive to shop around for the lowest available mortgage rate,” RBC Capital Markets analyst Darko Mihelic said in a note to clients.

Royal Bank of Canada and National Bank of Canada both posted profits that beat analyst estimates. Meanwhile, Bank of Nova Scotia posted earnings that missed analyst estimates. Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce will wrap up earnings week for the Big Six lenders on Thursday.

Here’s a breakdown of the fourth-quarter earnings so far.

Bank of Nova Scotia

• Earnings Q4 2024: $1.69-billion ($1.22 per share)
• Earnings Q4 2023: $1.35-billion ($0.99 per share)
• Adjusted EPS: $1.57 per share
• Analysts’ expectations: $1.60 per share (adjusted)
• Dividend: $1.06 per share

Bank of Nova Scotia BNS-T reported higher fourth-quarter profit but missed analysts’ estimates as the lender boosted revenue and set aside fewer provisions for loans that could default.

Scotiabank earned $1.69-billion, or $1.22 per share, in the three months that ended Oct. 31, compared with $1.35-billion, or $0.99 per share, in the same quarter last year.

Adjusted to exclude certain items, including impairment charges related to Scotiabank’s investment in China-based Bank of X’ian Co Ltd. and severance provisions, the bank said it earned $1.57 per share. That fell below the $1.60 per share analysts expected, according to data from the London Stock Exchange Group.

Scotiabank is one year into its new strategic plan aimed at reallocating more money to its North American businesses, where it believes it has bigger opportunities for growth than in its Latin American operations, and growing its deposit base. In August, the lender took a 14.9-per-cent ownership stake in Cleveland-based KeyCorp.

The bank kept its quarterly dividend unchanged at $1.06 per share.

In the quarter, Scotiabank set aside $1.03-billion in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated, but included $1.04-billion against loans that may not be repaid, based on models that use economic forecasting to predict future losses. The higher impaired loans were slightly offset by a $13-million recovery in performing loans.

In the same quarter last year, Scotiabank had a set aside of $1.26-billion in provisions, as the bank rebuilt its reserves from the recoveries it made during the COVID-19 pandemic.

Total revenue rose 3 per cent in the quarter, to $8.53-billion, while expenses decreased 4 per cent to $5.3-billion.

Royal Bank of Canada (RBC)

• Earnings Q4 2024: $4.2-billion ($2.91 per share)
• Earnings Q4 2023: $3.9-billion ($2.76 per share)
• Adjusted EPS: $3.07 per share
• Analysts’ expectations: $2.99 per share (adjusted)
• Dividend: $1.48 per share

Royal Bank of Canada RY-T reported higher fourth-quarter profits that beat analysts’ estimates as the lender pulls in higher revenue as it integrates its takeover of HSBC Bank Canada.

RBC earned $4.2-billion, or $2.91 per share, in the three months that ended Oct. 31, compared with $3.9-billion, or $2.76 per share, in the same quarter last year.

Adjusted to exclude certain items, the bank said it earned $3.07 per share. That edged out the $2.99 per share analysts expected, according to Refinitiv.

For the full fiscal year, RBC’s acquisition of HSBC Bank Canada increased net income by $453-million.

The bank increased its quarterly dividend by 4 per cent to $1.48 per share.

In the quarter, RBC set aside $840-million in provisions for credit losses. That was higher than analysts anticipated, and included $640-million against loans that are unlikely to be repaid, based on models that use economic forecasting to predict future losses.

In the same quarter last year, RBC set aside $733-million in provisions.

Total revenue rose 19 per cent in the quarter, to $15.07-billion, driven by net interest income from the HSBC Canada takeover and higher volumes in personal and commercial banking. But expenses climbed 12 per cent to $9.02-billion, which the bank said was driven by added costs from integrating HSBC Canada, as well as ongoing technology investments, higher operating expenses and staff-related costs.

National Bank of Canada

• Earnings Q4 2024: $955-million ($2.66 per share)
• Earnings Q4 2023: $751-million ($2.09 per share)
• Adjusted EPS: $2.58 per share
• Analysts’ expectations: $2.57 per share (adjusted)
• Dividend: $1.14 per share

National Bank of Canada NA-T reported higher fourth-quarter profit that topped analysts’ estimates as a boost in revenue helped offset larger provisions for loans that could default.

National Bank earned $955-million, or $2.66 per share, in the three months that ended Oct. 31, compared with $751-million, or $2.09 per share, in the same quarter last year.

Adjusted to exclude certain items, the bank said it earned $2.58 per share. That narrowly beat the $2.57 per share analysts expected, according to data from the London Stock Exchange Group.

The bank raised its quarterly dividend by 4 cents to $1.14 per share.

In the quarter, National Bank set aside $162-million in provisions for credit losses. That was higher than analysts expected, and included $145-million against loans that the bank believes may not be repaid, based on models that use economic forecasting to predict future losses.

In the same quarter last year, National Bank set aside $115-million in provisions.

Total revenue climbed 15 per cent in the quarter to $2.94-billion as expenses fell to $1.59-billion.