Big banks boast strong first quarter: Fitch

The big banks delivered strong revenue and earnings growth in their latest quarterly results, Fitch Ratings says.

In a new report, the rating agency said that aggregate revenues for the domestic systemically important banks were up 11% on a year-over-year basis for their fiscal first quarters (ended Jan. 31), as they generated broad-based gains across all business lines.

Revenue from Canadian personal and commercial banking was up 3% in the quarter, “backed by modest loan growth and a steady net interest margin,” it said. International banking, meanwhile, generated a 7% revenue increase, “due to improved volumes and margin expansion.”

Alongside the core banking business, the banks also recorded growth in their other major segments.

“Wealth management benefited from market appreciation, higher assets and elevated transactional revenue from client activity,” Fitch said. “Capital markets saw strong fixed income and equities trading, elevated underwriting and advisory activity, and robust client activity in corporate banking.”

On the strength of robust revenue growth, the banks posted a 10% increase in aggregate adjusted net income, it noted.

Credit loss provisions were up 4% in the first quarter, “as banks reserved for some deterioration in unsecured lending and potential headwinds in Canadian residential mortgages and commercial lending due to ongoing macroeconomic uncertainties,” Fitch said.

As a result, the ratio of provisions to gross loans ticked up by two basis points from the previous quarter to 0.4% in the first quarter — but the ratio remained below the 0.47% posted in the same quarter a year ago.

And, while the volume of impaired loans “ticked up slightly,” Fitch said that the median gross impaired loan ratio was unchanged at 0.86% in the first quarter.

The banks’ capital positions strengthened slightly too, it said, with the median common equity Tier 1 ratio coming in at 13.7%, up from 13.5% in the fourth quarter of 2025.

“Banks continue to prioritize capital deployment for organic growth opportunities, followed by share buybacks, with most banks increasing dividends for the quarter,” it said.