Wealth management led the way in the third quarter for the big banks, which posted solid earnings and revenue growth overall, according to Fitch Ratings.
Aggregate revenues were up 6% on a quarter-over-quarter basis for the Big Six banks and Desjardins Group, the rating agency reported — and, aggregate adjusted net income was up by 10%.
Revenue gains during the third quarter were strongest for the banks’ markets-driven businesses, with wealth management and capital markets revenues up 7% and 6%, respectively.
The wealth business was buoyed by strong market conditions and growth in fee-driven client assets, Fitch said, while the drivers of capital markets gains varied from bank to bank — with some banks enjoying strong trading activity, and others getting a boost from investment banking.
The banks’ international segments also saw revenues rise 6% in the quarter, which Fitch said was “mainly due to loan growth.” Their domestic banking revenues were up just 4% amid weaker loan growth, but some improvement in net interest margins, and a longer quarter.
While credit loss provisions were mixed across the sector, in aggregate they declined by 5% quarter-over-quarter, Fitch said, “as the credit picture improved, mainly due to recoveries on performing loans.”
The average ratio of provisions to gross loans declined to 0.37% in the quarter from 0.40% in the second quarter, it noted — adding that most of the banks maintained their guidance for 2026 provisions, which it currently expects to be in line with 2025.
“However, renewed tariff tensions with the U.S. could prompt banks to reassess their performing PCL as economic impacts become clearer,” it said.
For now, impaired loan pressure remain concentrated in specific commercial sectors, “such as real estate, transportation, telecommunications/cable and consumer goods manufacturing,” it said.
Additionally, Fitch noted that aggregate deposits increased by 3% in the quarter, amid “a structural shift from higher-cost term deposits to transactional and savings accounts.”
Finally, it said that the banks’ capital positions remain strong, with the median common equity Tier 1 ratio stable at 13.5%.
“This provides a 200 [basis point] buffer above regulatory minimums, which Fitch considers prudent in the current economic environment,” it said. “Banks continue to prioritize capital deployment for organic growth, followed by share buybacks, and most increased dividends for the quarter.”