Analysts had been expecting lower profits as banks grapple with slower mortgage growth, less business activity and the financial pressure of putting money aside for potentially bad loans.
But while there have been concerns, especially on loans to the office sector and on Canadian mortgages, banks still reported growth in most segments.
Overall, profits among the Big Six banks amounted to about
"We continue to successfully navigate through a fluid economic backdrop," said CIBC chief executive
The bank reported that it had cut its exposure to the
On Canadian real estate, Dodig repeated what bank CEOs have been saying since the
"They're employed, they're working through things. That doesn't mean they're not anxious."
Canadians are managing in part as the economy itself defies expectations.
Looking ahead, banks are no longer forecasting a recession, but instead a lull until interest rates start to come down.
"We expect North American economic growth to remain subdued in the first half of this year before recovering towards the end of the year on the back of lower interest rates," said BMO chief executive
RBC chief risk officer
"The market continues to gain confidence that interest rates have peaked to the current cycle, and the probability of a hard landing of the economy is decreasing."
Despite rising optimism, banks did all add to their provisions for credit losses this quarter as the lagging effects of higher rates still haven't fully played out. There also remains uncertainty as to when rate cuts might actually happen.
Provisions among the six banks totalled
Banks also reported that they're well-capitalized, with reserves well in excess of what regulators require.
Overall, the results show banks are taking a cautious approach that's paying off, given the financial uncertainty, said
"They continue to be stable.”
In BDO's fourth quarter debt market report, she noted loan issuance was up five per cent in the quarter, compared with nine per cent year-over-year growth in 2022.
While a clear slowdown in growth, it's still notable as the economy has defied logic by avoiding a recession, said Mishra.
She said there's clear pressure coming from higher rates, but the underlying pressures aren't substantial.
“There is nothing structurally wrong with the economy right now.”
Along with CIBC and TD,
BMO's White said the bank's results were affected by the "challenging economic backdrop."
"Our first-quarter results were impacted by revenues that fell short of expectations, due in part to environmental pressure," he said.
This report by The Canadian Press was first published
Companies in this story: (TSX:CM, TSX:TD, TSX:BMO, TSX:RY, TSX:BNS)
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