The Financial Post reports in its Saturday, Aug. 23, edition that Canada's major banks post third quarter earnings this week, which could provide insights into the economy's health amid the U.S. trade war. A Canadian Press dispatch to the Post reports that in recent months, bank stocks have outperformed the broader market as initial fears surrounding U.S. tariffs have somewhat subsided. Additionally, the banking sector benefited last quarter from a surge in trading revenue due to increased activity in the volatile market.
Analysts do not expect the same level of trading gains in the upcoming results, nor do they see banks significantly increasing their provisions for bad loans, as they did following President Donald Trump's tariff announcement in April. National Bank's Gabriel Dechaine notes the credit outlook -- the amount banks set aside for potential loan losses -- remains the primary source of uncertainty for forecasts this quarter.
So far this year, the Big Six bank stocks have outperformed the broader TSX index by one percentage point. BMO and Scotiabank are set to report results on Tuesday, followed by RBC and National Bank of Canada on Wednesday, and CIBC and TD will conclude the reporting on Thursday.
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