Canada’s major banks are preparing for economic uncertainty as US tariff risks raise concerns about credit losses.

Why It Matters

While analysts previously expected strong earnings from rising net interest margins and capital markets activity, new trade tensions could force banks to set aside more funds for potential bad loans.

What Analysts Are Saying

Paul Holden (CIBC): “We had expected credit losses to peak, but with tariff risks, that outlook is now uncertain.”
Darko Mihelic (RBC): “Banks may increase their loan loss reserves and revise economic forecasts toward a more recessionary outlook.”

 Which Banks Are Most at Risk?

BMO & Scotiabank – Already setting aside more money for loan losses. Scotiabank’s Mexico exposure makes it particularly vulnerable.
TD Bank – Facing higher compliance costs due to anti-money laundering reforms in the US.

 What’s Next?
The Big Six banks will release their Q1 earnings next week:

Feb 25: BMO & Scotiabank
Feb 26: National Bank
Feb 27: RBC, TD, CIBC

With trade tensions rising, could we see stricter lending policies and slower loan growth ahead? Let’s discuss in the comments!