The Canadian Investor - Canadian Banks Deliver Big Earnings as Uncertainty Rattles Markets

Episode Date: March 5, 2026

In our very first YouTube Live (also released on the podcast feed), we pivot from a planned “all-banks” episode after major U.S. and Israeli strikes on Iran pushed markets into risk-off mode. We break down the key market transmission mechanism—energy—through the Strait of Hormuz, rising shipping risk, and why yields can rise during conflict when inflation expectations jump. From there, we shift into what Canadian investors actually own: the banks. We recap earnings and credit trends across Royal Bank (RBC), TD, National Bank (NA), and CIBC, including loan/deposit momentum, net interest margin commentary, and what provisions/allowances are signaling. We also discuss the “do nothing” historical playbook for geopolitical shocks—plus why oil-driven conflicts can be the exception—and wrap with how we’re thinking about positioning (cash, Canadian energy exposure, and watching for opportunities if volatility expands). Tickers mentioned: RY.TO, TD.TO, NA.TO, CM.TO, LMT, RTX, NOC.   Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switch to the new EQ Bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers. And to sign up quick and fully online, no branch visits because, let's be honest, no business owner has time for that.

We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at eCubank.ca slash business. Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals. Don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time.

Welcome to the Canadian Investor Podcast. Our first YouTube live episode, we'll also have it on the podcast player. release this Thursday. It should be a fun one. We originally wanted to do it all about the banks, but at the end of the day, something happened over the weekend before we actually scheduled this. I'm sure all of you are aware it's crossed the news everywhere with the U.S. and Israel launching some strikes on Iran, and we're pretty much in a full-blown Middle East war at this point, it feels like. But before we get started on that, and we'll be talking about the impacts on the markets. and of course Canadian investors. Dan, how's it going?

How's it feeling? First YouTube live. Yeah, never done it. So yeah, I guess forgive us if there's any mistakes or I guess we should probably hit the start button when we're actually ready next time. Less and learn. But yeah, I mean, it's been a pretty ugly day on the markets today. I mean, at one point they were down like two and a half percent.

They've come back. But yeah, I mean, the market really never likes stuff like this. I guess we'll get into that when we chat about the whole conflict. But yeah, thanks for popping in. Hopefully, you know, you can drop some comments. I don't think we'll answer any questions like right away. But if you go into the in the comment section there, if you drop some questions, we can maybe set some time at the end to answer them. So they won't go unseen.

No, exactly. I think that's the best way that we can do it is just go through the podcast. And then if you have some questions, we'll try to answer a bit at the end. We'll probably just remove that from the actual podcast episode that's released on the RSS feed. But yeah, let's get started. as you were talking here. Not that great when you're looking like a CNBC website and you're seeing all this read. Clearly, the markets have been pretty jittery since yesterday.

Yesterday was down and finished a day up. Today it's looking a bit worse as escalations have started over the weekend. So essentially, the biggest impact I think most people would know here is energy. So there's going to be some big impacts on that. But just to get started here, here, just getting my notes here. I did quite a bit of reading on that over the weekend. I just listened to some experts too. I read some, listened multiple YouTube videos, read a bunch of articles because I'm not an expert on this topic whatsoever, Dan, you're not as well. But the

biggest risk that I can see is the conflict seems to be centered on essentially the risk around what happens to the Iranian leadership that is currently in place. There's a lot of uncertainty around that. Of course, the news came out that the Supreme Leader, was killed by U.S. and Israeli strikes. And Iran's constitution assigns the selection of the supreme leader by the assembly of expert, which consists of 88 mujahids. Something I was not familiar with, so I had to do some research on that. And one of the expert mentioned it was designed to essentially survive the fall of a single person.

So he compared that a little bit and obviously was not saying it's the same thing at all, but just so people would understand is a bit in the U.S., right? So if the president gets killed, for example, the vice president would take over. If he's gone or she's gone, then the head of Congress would take it. So there is this kind of, you know, the government or the apparatus stays, keeps working even if one person or several people falls. So I think the logic is kind of the same thing here with Iran, not comparing the two regimes whatsoever, but this was the way of the expert of trying to explain how it works. And there seems to be three main outcomes.

Limited retaliation where decision marked, where decision are marked to prioritize regime survival. So Iran is really looking after itself and the regime in place wants to survive. I don't know if we're kind of out of that one already based on what happened yesterday. The second outcome, and these are like big buckets outcome, sustained regional war. And the third one, regime destabilization or collapse. So, again, it's hard to say where this is going is just a few days in, but the straight of Hormuz is already being impacted with Iran saying there's a full blockade on. And that's what we'll talk a little bit because that has probably one of the biggest economic impacts here.

And we're already seeing prices of oil spiking with Brent and WTI up, I think around 15% each, respectively over the last couple trading days. So essentially since trading started over the weekend. And then, if you wanted to mention a few comments here, I'll just kind of show the charts we're seeing here with Brand Crude. So essentially, this is more of the, for those not familiar, this is more of an indicator for kind of international prices, a bit more reflective of Europe. And then you have WETI, which is the West Texas Intermediate,

and then that's the U.S. A bit less impact on that in terms of actual price, but you're still seeing the increase pretty significant. So the markets are starting to brace with the idea that there may be some supply constraints here for oil at the very least. Yeah, I think they had mentioned that I believe 20% of like global supply goes through that straight. So I mean, if it's if there's a blockade there, then it becomes much more of an issue. I really don't pay attention to this much outside of like the impacts to the market. Like especially when we're talking about regimes and all that type of stuff like that is.

Just stuff I don't really spend a lot of time on. I mean, my element here is mostly through, like, I'll speak on, you know, eventually once you're done kind of going over what has happened, unless you want me to move into it right now, like kind of the impacts on inflation and like what the conflict, like historical conflicts have done to the market. But if you're still going to. Yeah, let's just keep. Yeah, a few things.

Just keep going. Just to provide some context. But I think there's a lot of stuff happening over there. And clearly there's some inflation expectation that are starting to be baked in. And we'll talk a bit more about that later. But I think that's really well reflected into the U.S. 10 year and 30 year. They've increased about 15 basis points in terms of yield 10 to 15, depending if you're looking at the 10 or 30 since the conflict started.

So you're starting to see the market price in some inflation expectation. And that typically what you'll see as well with these type of conflicts is you'll actually see treasury yields go down because there's a flight for safety. But I think the market is weighing a bit more of inflation impacts that could result out of this. And unfortunately, the conflict seems like it is not like we've seen before. The U.S. last night urged its citizens to leave the Middle East, the region in general, because they're starting to see attacks. I think different attacks by Iran and some of its proxies across different countries here. Canada is having a similar kind of messaging for its resident. We're seeing airports, air travel disrupted here.

Israel is fighting afront now on its Lebanese side of the border against Hezbollah attack. So you're seeing this potentially evolve into a broader conflict. Obviously, it's not great, but I think we've talked about it time and time again. we tend to, well, I invest not in the world I wish we had, but in the world we live in. And that is a, that's the reality of it. It's not great. I don't like to see war. I don't think anyone really likes to see armed conflicts going on, whatever the reason is.

I don't like to see death. But that is what is happening. And just before we move on here on about inflation, the last thing I'll mention is natural gas is a bit different. So a lot of people are talking about natural gas or oil and they're interchanging them. But natural gas really has a massive different in price depending if you're looking at Europe, for example, pricing in North America because it's very abundant in North America. And it is difficult because you have to liquefy it to be able to transport it to other countries. So natural gas is really, it's seeing an increase as well because it's being impacted, especially in Europe.

But you're still seeing that discrepancy in prices. but natural gas is also seeing some spike in prices both in North America but also in European pricing. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investors. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move.

You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. The Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to Questrade.com, open and fund your account with code TCI and receive $50. Conditions apply.

My wife and I are planning a big spring trip to Vancouver. It'll actually be my first time visiting the West Coast. We're looking for a place on Airbnb close to the water so we're looking for a place on Airbnb close to the water, we can wake up to those ocean and mountain views every morning. We can already picture ourselves walking the seawall, exploring Vancouver's neighborhoods, and then making our way toward the Rockies for a couple of unforgettable hikes. Finding the perfect home base on Airbnb will make the trip perfect. It also got us thinking about our own place while we're away.

If another family's home can be the backdrop for our first West Coast adventure, maybe ours could be that for someone else. Hosting our home on Airbnb would let travelers make their own memories in our beautiful neighborhood, while giving us extra money to put toward all those Vancouver meals and our Rockies excursions. And the nice thing is flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca.

Smart investing doesn't have to be complicated or time-consuming. With BMO all-in-one ETFs, you get a complete diversified portfolio wrapped up in a single ticker. It's easy. Whether you're conservative investor or more aggressive, BMO has an all-in-one solution for you. And now, it's even more cost-effective. BMO has cut management fees to just 0.15% on select asset allocation ETFs, helping you keep more of what you earn. Simplify your investing today at BMOetFs.com. Let's talk a bit about inflation and we can talk about what we think could be the impact on different kind of assets, including stocks, sectors and things like that.

Yeah. So I think this is probably the most interesting thing because, I mean, we go over CPI on the podcast all the time. And it's like one of the main driving factors downward has been energy really, like lower gas prices, all that type of stuff. And they call energy like the master resource. effectively because it's prime it's it's it's the primary input for pretty much everything we do so i mean you're talking food it's got to go from truck to truck to store like facility whatever it may be like all along the way a higher energy costs mean ultimately the more costs are passed on to you because i mean when those prices go up the shippers are going to pass the costs on the grocery stores are going to pass the costs on and so on and so on shelter i mean even if you think of shelter you can talk about, you know, shipping and production can raise shelter prices. I mean, more cost to ship lumber, more cost to produce, you know, vinyl siding, plumbing material, whatever it may be.

And then there's the obvious one, which is gasoline prices. So shelter and energy, as I mentioned, have been having massive downward impacts on inflation, at least here in Canada. But if you get to the situation where energy starts to creep back up again, you know, gasoline and natural gas start to go up. You have a situation where pretty much two of the three things that everyone is exposed to in regards to CPI, you're talking shelter, you're talking food and you're talking energy prices. They're going up. So as you had mentioned, that straight of Hormuz, which was, it's effectively controlled by Iran. It was shut down, well, it was shut down a few days ago. I have yesterday, obviously, because I wrote my notes a while ago, but 20% of the world's oil reserves

move through here. And then in regards to you mentioning the European kind of LNG, like Qatar halted LNG production, I don't know if they've ramped it back up again, but that knocked out 20% of global output. So I'm pretty sure that caused natural gas to go like through the roof price wise because, again, I don't know these markets all that well. I'm far from an expert on this, but I would imagine when you knock out 20% of the supply over there, you start to get kind of a bidding more for potentially supply elsewhere, which could bump prices pretty much everywhere. And I think, like, they often say inflation is kind of too much money chasing too few of goods. And I think this time it could be, you know, too high of energy prices, effectively impacting

everything, everything we purchase. And I think, like, the last thing North America needs is higher inflation. I mean, we already have like a K-shaped economy where, you know, those with money are spending and those without are not. but you could get an amplified effect here if inflation ramps back up because the U.S. might have to keep interest rates high. Like what are they now, four and a half percent or something like that? No, they're lower. They're lower than that?

Yeah, I think they're below four, they're below four, slightly below four, if I remember correctly. So they're much higher than Canada. And I mean, in this case, if you get inflation creeping back up, like the U.S. might have to keep rates. Well, they might have to raise rates. They might not be able to lower them, which is kind of, you know, the bullish case. for an economic rebound. So if you get that, if that is the case, you'll probably see construction remain very slow. You'll probably see borrowing remain pretty low.

You'll probably see, you know, consumers, especially like lower income consumers will continue to hoard cash, which ultimately is not not the best. And I mean, here in Canada, we kind of already took our shot at, you know, kind of trying to kickstart the economy. Like we were much lower policy rate wise than the U.S. You could see a situation in Canada where. the economy is bad. What we went down, we declined like 0.6% or something, the last GDP report they put out.

Yeah, I can't recall exactly the meeting. But yeah, and I think people also forget as shippers are taking. So these large shipper container ships, I think Mazurk is the largest in the world. So they are seeing increased risk. So probably shipping costs will be going, at least overseas shipping will be going up because of that increased risk. And the street of Ormoos, what's interesting, I had done some reading is it's actually like fairly wide, right? Like it's around 30 kilometers and width.

But the issue is the actual safe passage for boats to make sure that they don't get stuck is actually just a couple miles wide. So it's actually quite easy for Iran to start targeting that. So that could create, like you said, that's a big part for inflation. In terms of what we could do for assets, I think in flat assets that should do well in inflationary environment will do pretty well here. So I'm thinking for me, I think honestly, people will know that I own some gold in my portfolio, but gold has been up and down ever since the conflict here. So it started the week, I think close to 4,400, 5400 U.S. and then has been down a bit more here, as people can see around 5,500 U.S.D.

It's been up and down. What we're seeing is the U.S. dollar actually gaining a bit of strength, but U.S. treasuries are. struggling with higher yield. So I think there's probably a liquidity premium happening right now where people are kind of, or investors are looking at cash a bit more. But I think if this goal is on for an extended period of time, gold will ultimately be seen as a hedge against inflation, but also as a safety asset. And you're looking like defense contractors. I know Daniel, Lockheed Martin, they should do pretty well, RTX, Northrogrammen. These should all do well. Unfortunately, obviously, this is situation, but if there is a war going on, defense contractor will inevitably do see some pretty

big tailwinds amongst that. And in terms of stocks, I mean, it's really hard, right? So we've talked about a lot about AI recently, a lot of pressure, especially on software stocks, even the mega caps are facing some pressure recently. I think sentiment is down a little bit on AI and the amount of CAPEX spending. It will be interesting whether there's a bit more of flight to safety or not. So that's kind of my big sense. I mean, I guess the last thing, too, for those who own Canadian oil company that have little to no exposure to the Middle East, I think that should be pretty good for Canadian oil companies. I think, you know, Canadian oil is starting to look pretty good. And we were actually texting about that is, you know what would be easy for Trump

in the U.S. is if they want to tame inflation with the midterms coming up would be to an easy fix would be to remove that, what, 10% tariff on Canadian oil, on Canadian energy products. So that would be an easy, probably Carney would have to, like, give him something to, like, give Trump a win. So that's removed. But I think that would be an easy way for them to actually lower that. The other way would be the SPR, the Strategic Petroleum Reserve in the U.S., which had the estimates that I saw was $415 million barrels of oil.

So that could be used to offset it a little bit. So increase the supply in the market offset the price. But it is a bit of a head scratcher why they Trump would have given the green light to this with all these inflation risk. But I think that's a good overview. Anything you wanted to add before we actually move into Canadian banks and hopefully what people are here to see. Yeah. I mean, do you want me to go over the historical or do we want to skip? Yeah, let's do that.

Let's wrap up and then we'll move on to the Canadian banks. Yeah. So I mean, a lot of people are going to be asking like what. to do, obviously, and something like this. And I mean, you know, historically the best case has been to do nothing. The market is usually pretty quick to forget conflict. I mean, I'll go over a few caveats in a bit here, why this is a bit different. But historically, I mean, there's short-term panic followed by long-term profits.

So if you go to recent events like Russia, Ukraine conflict, the market's bottomed in 13 days and they took only 23 to recover. 9-11 took 11 to bottom and 31 to recover. and then the Israel Hamas situation, 14 to bottom, 19 to recover. So 85% of the time when there's a geopolitical conflict like this, the markets are higher 12 months after. So the average return of the markets is in the high single digits. So generally, again, you've been better off just kind of letting the fog clear at holding because the market will often price in the worst case scenario immediately.

And then, you know, it kind of sorts its way through things. In this instance, I'm not really sure if it has because the S&P is only 3% off highs. Like I've noticed a lot of people are like talking about how, you know, by the dip. I mean, we're at like last week's prices. Like I think, you know, maybe. It's a small dip. Yeah, it can get going sideways for.

Yeah. Better part of this year if we're being honest here. I think like we've been kind of trained over the last. I mean, you can guess like six plus years to not think the markets can get as bad as they can get. Like, you know, the other instances I mentioned, like there's 20. 20 plus percent decline. So I don't think we're really there yet. But the interesting element here is when we isolate the geopolitical conflicts to where the price of oil was impacted, like significantly,

they tend to drag on a bit longer. So the 1973 oil embargo was absolute worst case situation. Like the price of oil quadrupled. That was when inflation went through the roof. Markets bombed. The 1979 Iran-Iraq war was another one. The price of oil nearly tripled. So the markets were flat, flat for over two years, very volatile over that timeline. In 1990, the price of oil doubled in three months. The S&P 500 fell quite a bit, took over a year to recover. And then obviously we have the most recent one is the Russia-Ukraine conflict. And I don't really think this conflict started the bear market.

Like we were sliding well before that. I remember late 2021, the market started kind of tanking. But they were down around. six percent heading into, you know, that whole conflict and then they fell about another 19 percent after that. So the recovery was pretty quick. But generally, I mean, you've just done well, just kind of holding. I don't really think you should be making any short term moves based on something like this. Like, you never know how long it's going to last. And you just never know the true impacts. Yeah. And for me, from an investing perspective, I do have a little bit

of cash on the sidelines. So I'm really just waiting and seeing. If I see there's some sectors, some areas are really hit hard in terms of bearishness. And there are some good opportunities. That's what I'll pounce on. So I'm kind of a bit of a wait and see. That's what I mentioned to our Patreon subscribers and our monthly update is I don't have anything on my radar per se right now. I'm just waiting and seeing. Obviously, I have some decent oil exposure as well, mostly Canadian oil. So I'm like from that perspective, I think I'm pretty well positioned, not crazy big allocation. But it is, I think, for me, a wait and see. I think the duration and the magnitude of the conflict will have the biggest impact here.

But again, if we start seeing inflation go up, I don't know. I feel like all bets are off, right? Yeah. Yeah. Well, I mean, yeah, you want to dig into the banks? Yeah, let's dig into the banks. So I just shift to something, you know. Yeah.

And most Canadian vetsers love. So Canadian banks, so do you want to start us off with the smallest of them all, Royal Bank? Yeah, just a tiny little $200 billion plus company. Yeah, the tiny Royal Bank here. Yeah. It was a pretty good quarter from Royal, but I think, like, we were just at really expensive valuations. I mean, I guess I'll say this across all the banks. Like, they all posted pretty good results, but like a lot of people probably be confused

because pretty much every one of them fell after earnings. And I think there's just a lot of, I would call it price to perfection. I mean, Royal Bank was 15 year highs in terms of price to earnings multiples. So you would have had to knock it out of the park, which, I mean, it was a very good quarter. Earnings increased 13%. Revenue increased 7%. But, I mean, it just wasn't enough to move the needle provisions were. I mean, Royal Bank is off like 34% without dividends.

So just a pure price appreciation over the last year. year. So clearly, yeah, it's, if you've been holding the banks, congrats, the Canadian banks over the last year, congratulations, you've done pretty well. Yeah. And I, a lot of people I know own, you know, they took the 25% leverage ETFs, which are doing even better. But yeah, they, I mean, this is why you own companies long term and just forget about all the, this type of short term noise, because it is a good quarter. It's just a market's kind of priced it in beforehand. So provisions were up mid single digits, much like any of the other banks, they're practically all impaired provisions now. So the company actually reported a decline in performing provisions year over year,

and performing provisions now make up like less than two and a half percent of total PCLs. So performing is being paid, potential to go unpaid, and impaired is there's been some sort of default. So there was, I can't remember when it was during Liberation Day, maybe the banks reported like big performing. provisions because these loans were getting paid, but they didn't really know what the macro environment would be moving forward. So you'll kind of see them cycle in between those. So capital markets has slowed. They're up only 3%, but they're growing off a much larger base. And I know the last podcast episode where we went over the banks, like I mentioned like the capital markets is

what was driving a ton of revenue, a ton of earnings growth through these companies. So I think this was also a level that maybe caused a bit of a sell-off. It's just not going to continue to grow at the levels we've seen last year forever. They've more than made up for that on the banking side of things, though. So personal banking up 9%, commercial up 4. The company's personal banking segment is pretty much best in class, and I don't even think it's close. Return on equities, return on equity in the P&C segment is 26.3%. Net interest margins expanded another 14 basis points and its efficiency ratio. So what this does is takes effective non-interest expenses, like company expenses and compares them to their revenue and non-interest income. It keeps declining.

So most banks would be efficient if it was below 50%. So the lower the better. Royals at 38% on the personal commercial side. So just to give you an idea, National, who I think is kind of the best outside of that is 50%. So deposits were flat. flat, loans were up 3%, mortgages remained pretty strong. And on the commercial side of things, deposits are up 5%, loans 4%. And the interesting thing here is small business loans were up 8%. It's kind of a drop in the bucket, but I mean, it kind of looks like, you know, there might be a bit of a recovery there. And then just finally, insurance struggled, but we've pretty much seen that everywhere. Berkshire, Fairfax, Royal Bank, intact, earnings were down 22% on the insurance side of

the business. So good quarter, but. just too pricey, I guess. So it took a bit of a slide after. Yeah. Yeah. And let's move on to the second largest Canadian bank, so TD Bank over here. So adjusted earnings per share was up 20% compared to last year. And PCL, so provisions for credit losses were $1.04 billion, which was down from last year, but up compared to Q4. So PCL came in at 0.43% for the quarter. And they anticipate that, to be between 40 and 50 basis point in the next quarter. The allowance for credit losses, so money on the balance sheet that they have for bad loan is 0.9%.

And I know sometimes we get questions about people getting a bit confused between both. So the provisions for credit losses that they'll announce that will make headlines are usually the provisions that they just set aside, the additional money they set aside in a given quarter. But of course, it's something that's constantly moving. Right. So you have, you know, they'll be riding off some loans and then they'll be recouping some and so on. So it's constantly moving. So what's a really good indication is really seeing those allowance for credit losses on the balance sheet compared to the total loans and how far is going or how quickly it's moving. So TD is actually stabilizing. So it was going up and now it's starting to stabilize. And I was looking at most of the bank and I don't know if you had looked. I think Royal Bank as well. Well, it's all stabilizing a little bit. They're all pretty stable now.

Yeah, they're pretty stable. So I think that's a good news. That's probably the bank saying that they see things may be, you know, getting slightly better. Yeah, improving. But let's keep in mind that this quarter now has been done for a little bit in reality. So with their recent developments, what we're seeing in Iran, it's going to have some impact in Canada.

That's just the reality of it. So it'll be interesting with this, the upcoming quarter, how those provisions actually shift, especially when you factor in the trade war with the U.S. And they're making progress CD on the anti-money laundering remediation with a new U.S. AML program. They're making a push into adding frontline staff by adding 300 business banker and 200 financial planner, which is interesting. We're seeing so much job cuts with AI. So I guess seeing him at some additional.

addition I wanted to mention that here. The net interest margin came in at 1.85%. That will vary from bank to bank, just to keep in mind so you don't need to check. Oh, TD has 1.85 and I'm just throwing numbers out there. Royal has 1% percent. Like, it will vary from bank to bank depending on the composition of their loan portfolios and what their main business lines did. But what has been interesting for TD, it's been steadily increasing now for over, like,

more than a year. So they've been increasing that. They continue to implement AI across the business. They provide an example of AI to simplify the pre-adjudication process for real estate secured lending. So they reduce a time frame from 15 hours to just minutes. So that's kind of the almost, I guess, the pre-approval phase, right? That would be part of it. You would think so.

Yeah. So just showing how they can use these efficiencies to really help the business. And having worked in my previous employer was export development Canada, which is essentially a government of Canada, Crown Corporation, but it's still a bank the way it works. I can tell you that banks have a lot of manual processes still. You'd be surprised how much manual stuff they still do. Is something you wanted to add that? No, I just like, I would see AI is going to replace a lot of, I think it's going to replace a lot of loan underwriting and a lot of, well, I don't, I guess what you would. I wouldn't say replace, but like it's going to be making more efficient.

Very automated. And probably like I know, well, actually another company that reported earnings today, but propel like a subprime lender. They do that on the subprime front. Like a lot of their underwriting is AI based. I think it's inevitable. And it's probably going to make these banks more efficient, I would say, because you just remove human error.

Yeah, yeah, exactly. So you could really see, I mean, it could be a tailwind for banks when you think about it, they can become more efficient and just have better loans because of AI in general. So better credit risk. That could be something really interesting. Their return on equity of 14.2% was a bit of an adjustment. The adjusted ROE, should I say, a bit of an improvement versus previous quarters. In terms of their separate segments here, net income saw an increase of 12% year over year for Canadian banking.

They saw lower PCLs for that segment. Revenues increased 5% to hit a record, 5.4 billion. They saw increased loans and deposit volumes and the highest quarterly credit card acquisition in over a decade, which is interesting. It's kind of the banks doubling down on the credit card market, which, again, with economic uncertainty, there's some added layer of risk. But TD is clearly putting more efforts in Canada because they're restricted in the U.S. You don't have to look very far.

can just look at their results over the last few quarters here. US retail banking, they saw net income go up 20% primarily due to the impact of restructuring efforts and the resolution of the AML investigation that hit earnings the year prior because, and of course lower PCLs again on the US side. Government costs, governance costs from the AML investigation are weighing down on profits.

However, for that segment, wealth management and insurance, net income was up slightly more than 11% for that segment, TD Direct Investing saw 10% increase in trades per day. So that was, I thought that was interesting. Just look at the markets right now. It's crazy. Yeah, crazy. But a lot of TD indirect investing is actually, it actually charges per trade too. They have like a free option, but if you want the more robust platform, you have to pay per trade. So that was interesting to see that. I guess a lot of people will go on their platform. My parents included because it's just tied to their banking. It's just easier for them. So that's probably it. But wholesale banking, net income more than doubled. And for those not familiar,

wholesale banking is typically more like large client. Think of institution. So the banking they do with those across large companies, governments and stuff like that. It was led by strong execution across global markets, corporate and investment banking, which just tells us a whole lot of nothing. but I thought it was interesting to put that because sometimes you will see some things that are mentioned in the earnings release and you think about it for a second or two and it's like oh okay that's I guess so. There's a lot of filler in there. Yeah, a lot of filler in that. So I wanted to mention that because you'll see that a lot and just in earnings in general sometimes you'll see lines. You're just kind of head scratching like what the hell does that even mean? I just wanted to highlight that. But overall I think TD just like Royal pretty strong. solid quarter. TD has its own issues to deal with, but despite that pretty solid quarter, anything you want to add before we move on to National Bank? I guess the final thing I'll add is on the filler. I mean, again, if we go back to

Propel, I mean, they reported like a 55% earnings decline, or quarter over quarter, but they only had good things to say in the report. So, yeah, there's a lot of fluff in a lot of these reports, but we're filing for bankruptcy, but it's a good thing. Don't worry. JK There is an old saying in investing It's not about timing the market But time in the market The most successful investors

Aren't usually the ones trying to catch Every top and bottom They're the ones who spend the most time in the market I've been a quest trade user For over five years And the reason I stick with them Is that they remove the friction of regular investing With no commissions on stock and ETF trades

You don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to to avoid fees. Ready to invest, head over to questray.com, open and fund your account with code TCI and receive $50. Conditions apply. My wife and I are planning a big spring trip to Vancouver.

It'll actually be my first time visiting the West Coast. We're looking for a place on Airbnb close to the water so we can wake up to those ocean and mountain views every morning. We can already picture ourselves walking the seawall, exploring Vancouver's neighborhoods, and then making our way toward the Rockies for a couple of unforgettable hikes. Finding the perfect home base on Airbnb will make the trip perfect. It also got us thinking about our own place while we're away. If another family's home can be the backdrop for our first West Coast adventure, maybe ours could be that for someone else.

Hosting our home on Airbnb would let travelers make their own memories in our beautiful neighbor. while giving us extra money to put toward all those Vancouver meals and our Rockies excursions. And the nice thing is flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca. Smart investing doesn't have to be complicated or time consuming. With BMO All In One ETFs, you get a complete diversified portfolio wrapped up

in a single ticker. It's easy. Whether you're conservative investor or more aggressive, BMO has an all-in-one solution for you. And now, it's even more cost-effective. BMO has cut management fees to just 0.15% on select asset allocation ETFs,

helping you keep more of what you earn. Simplify your investing today at BMOetFs.com. National Bank, probably, like, They reported a very, I mean, I own national and I was kind of getting worried after the final two few quarters of 2025 because it was pretty rough. Their provisions were escalating and they just weren't reporting very good quarters. But it seems like, you know, they got back on track. Revenue this quarter grew 21% and earnings by 11%. But if you strip out the Canadian Western contribution, revenue still grew 11%.

So you're talking about 10% help, I guess you could say, from Canadian Western. And it kind of seems like this company was completely sandbagging the expected Canadian Western like synergies. And the reason I say this is the company is already realizing like 30 to 40% higher revenue and earning synergies than it had guided to when it bought Canadian Western. So I can't imagine they missed the mark by this much. And I know initially I don't even think the market liked when. national bank was buying Canadian Western. That's probably because, you know, they, I just think they sandbag the guidance because it's way ahead of Target.

Return on equity was 16.6%. I believe this is the second highest next to Royal. I believe Royals like 17 something. And the company is going to ramp up its buyback plan and buy quite a bit as well. So they're going from 8 million shares to 14. And I'm going to talk about results here excluding Canadian Western because. it would look like National is growing at the rate of a tech stock if I didn't. But personal mortgages were up 11%.

Commercial loans up 12%. And its personal commercial segment actually grew by 7% year over year total. So again, it looks like the capital market segment is leveling out. It's going to be the same for pretty much every bank. However, they're still kind of growing at one of the faster rates year over year, 9%. And again, much like Royal, you're growing off that larger base. So it's pretty impressive. Net interest margins, another thing that they were reporting like in 2025 when I was starting to get worried, there was three straight quarters where National was facing downwards pressure on net interest margins.

But this quarter, they reported a five basis point bump that effectively gets them back to where they were a year ago. I didn't actually put the net interest margin. I think it's 2.26, I want to say, for national. So again, like you said, like the banks, they're very different in terms of loan makeup. So when you're looking at NIMS, just look at the company and kind of the progression in that individual company. Loans and deposits very strong, up 9% and 12% year over year. And this is excluding Canadian Western. If you include it, it's much higher.

And provisions were flat sequentially from what would it be Q4, 2025, which is a pretty good sign because they really spiked from Q3 to Q4. So when you get quarters like this, you kind of want to see a quick turnaround or the market will punish the bank. You can look to Bank of Montreal. They had kind of rising provisions. It was probably two years ago now. CIBC went through it as well. If you see these escalate like quarter over quarter over quarter, the market will eventually hammer the stock just like it did. Those two have recovered.

But over the short term, you can see some difficulties. And the bank is one of the more conservative like allowance and, you know, A, CIS. PCL and PCL situations out of the big six. And I mean, the results kind of back it up at this point in time. And the fact that they're ramping up guidance and bumping return on equity targets kind of makes me feel like they think the worst is over here. And the environment will improve moving forward. Nationals up 65% over the last year. I don't think that's including dividends.

So you're looking at North a 70% in terms of dividends. So yeah, it's a very good run for a lot of the banks. Mm-hmm. Yeah. Yeah, I mean, National just keeps surprising. Clearly the market liked their quarter because it seems like most of the banks it was kind of flattered down and they just had a big spike from earnings. I'm probably from that sandbagging that they did. Well, and I think what happened is National was not doing good to end 2025. So they weren't, you know, they didn't run up as much, I guess you could say. I'm just completely guessing in that regard. But yeah, they were the worst performing for, you know, the last two quarters, but probably

the best bank to report this quarter. Okay. Now, let's do, I think the last one here. So we did four. I think you have a few notes on Scotia Bank, but we can always do Scotia and BMO on a different episode. Yeah, exactly. Yeah, exactly.

Just because we didn't anticipate what would happen with US, Israel, and Iran. And obviously, in terms of the markets, you can't really not talk about it because it does have an impact on the markets as we're seeing. So we condensed it a little bit in terms of the bank earning. but CIBC adjusted earnings per share was up 25% year over year. PCLs were about flat versus last year, but again down 6% versus Q4. And that's something we've talked about. With banks, you always want to look both like previous quarter and year over year,

kind of a bit of combination of both. But for the most part, previous quarter is sometimes it is a bit of better indicator. The allowance for credit losses, so the money on the balance sheet that they have set aside compared to the total loan portfolio. So that is at 0.9%. It's one of the highest in Canada, but it is stabilizing. I think they're,

them and TD and Scotia Bank are really the highest, if I remember correctly. Scotia Bank is like you're talking ACL ratio. Yeah. Scotia Bank is 98 basis points. Okay. And they reported. I think those three are on the higher.

Yeah. Right. Okay. Yeah. They started integrating. And actually just on that. point. So RBC and National Bank on their lower end typically for those ACLs. Yeah, just so people give a little bit of context here. Let me see here. You keep going over CIBC. Yeah, I'll keep talking.

So I'll get that. So they've started integrating AI prudently through three areas of focus, enhancing client experience, operational efficiency and reduction of manual work. So this is kind of constant we're seeing here, just a reduction of manual work and risk mitigation. So fraud prevention, credit monitoring and AML. Maybe TD should take some notes there. And net interest margins came in at 1.48% so you can notice that it is different from some of the other banks just because of the loan composition here. Again, if you're owning CIBC, you're definitely, you want exposure to the Canadian housing market. They have the largest exposure when it comes as a percentage of their loan portfolio.

Of course, RBC will have more exposure than them because they're just larger in general. general as a pure dollar value, but as a percentage of their loan portfolio, it's always around 50%. Every time I check, it's right around there. So just keep that in mind. They've achieved an adjusted return on equity of 17.4%. And it's actually significantly better than they saw over the last few quarters, typically closer to 14 to 15% here. Did you find anything? Royal is 0.73. I can't find national. National is around 0.7. Yeah, they're pretty low. I think they're the lowest.

So they're pretty low. Yeah. Yeah. So, but just I like to bucket them. So I kind of, I can't remember. I think BMO is like in between if I remember correctly. And then you have, you have National Bank, RBC that have the lowest allowances. And then you have really the 3TD, Scotia Bank and then CIBC that are on the IRA.

Yeah. It's just a good mental framework, just to understand a little bit how much you're setting aside. And of course, if there's, setting aside higher percentage, it's just their risk management team that says, okay, we have to set more aside because there's more risk in our portfolio. That's essentially what it means. Yeah, and they'll, they'll usually post if you go into their reports, like they'll have kind of their outlooks, like, you know, depending if rates are here, if rates are here, like if GDP is here or here, like they'll, there's a lot of work that goes into this. And if you see higher provisions

among, you know, different banks, it doesn't necessarily mean that. one bank is worse. It's just one is planning for a different situation. I mean, you can get a situation where the loan portfolio is worse, which would result in higher provisions, but it's just predictions by the bank. So they can overshoot it or they can undershoot it. And with CIBC, I mean, they overshot it back a few years ago. And then, you know, they started reporting a lot lower provisions over the last few years. Or just even really, I think they had releases. Yeah, and that's why CIBBC has crushed it in terms of stock price over the last while. It's probably been the best Canadian bank to own over the last.

I mean, if we go back to late 2023, it's up 170%. It's been crazy. Okay, well, to continue here, again, just CIBC continuing, Canadian retail and business banking, net income up 25%. It was really driven by higher revenues from loan growth and higher net interest margins. PCL was higher and non-interest expenses weighed down on earnings. So it could have been actually better than that if those were more in check. Canadian commercial banking and wealth management, net income was up 9% versus last year.

And it also saw higher expenses in PCL for this segment. They saw higher loan volume to businesses. And on the wealth management side, they saw increased fee revenues from higher assets under management. Not a surprise if you've been listening to the podcast or looking at earnings from a Black Rock, for example, as the markets go up, asset under management inevitably go up as well. And, you know, your fees are typically a percentage of those asset under management. So it's definitely a tail win for revenues.

U.S. commercial banking and wealth management, net income was up 19% driven by higher volumes, higher net interest margin, and actually lowered PCL for the U.S. segment here. The wealth management side of things was actually mixed bag with lower revenues from performance-based funds, but higher revenues from AUM. So kind of a little bit, a mix of both. And capital markets here, net income was up 42%, saw lower PCLs, higher revenue driven by higher equities and commodities trading, along with higher equities and debt underwriting.

So overall, again, I think really solid quarter from CIBC from the banks in general. It'll be interesting how the year progresses, because the one thing I think we have to remember, and we talked about it on the podcast before is, I think so far this year, especially with the orange men down south, is that you have to expect the unexpected. Like,

let's just take a moment to think how much stuff has happened since the start of the year. Like, it's crazy. Like, in terms of, like, big moves,

if you think of just Venezuela, which seems like it was, like, years ago now when you're thinking about the Iranian conflict going on, but all the different things, that are happening on the trade front. You had also the Greenland question. I kind of forgot about that one for a second.

But yeah, everything that's happening and rattling market and affecting investor confidence, you have to keep in mind that all of this stuff we saw in two months. So I think we will be seeing a whole lot of different things this year, especially leading up to the midterms. And I know we're Canadian investing podcast. By the end of the day, the U.S. is the elephant in the room. It impacts our economy, our stock market, our investments, a lot more than we'd love to admit. And it's just going to be, I think there's just going to be a whole lot of volatility.

And yeah, I think I'm positioned my portfolio is definitely as more of a macro approach. I try to look at things and invest based on what I think will do well in a variety of scenarios. So yes, I invest in businesses, but I also have index fund. I have some gold. I have some Bitcoin, I have some short-term U.S. treasuries. I have a good mix of things that should do well in a variety of scenario. But I think for investors, it's really important to remember, are you well positioned for a variety of scenarios or are you overly concentrated?

And I know we both know people that are super concentrated in tech and I've had a really tough start to the year. And in some cases, people have had a rough end to last year as well. So I think it's just something to remember is that, Just be aware how your portfolio is built and realize that there might be some things that no one sees coming that will happen in the next couple of months. Oh, absolutely. As you had mentioned, like, we've seen so much stuff over the last, like we're going on a year now. It seems like the markets are like numb to any sort of news. Like the S&P, like it's down.

Until they're not, right? And then stuff will happen. Yeah, but it's down. But I'm in gold, right? And like on January 31st, you saw that big run up and then got smashed. And then until like the drawdown a little bit earlier today, I mean, it was almost getting back to January highs. Like it's been crazy. Yeah.

It's going to be it's going to be a roller coaster. It can get like it can be nothing or it can get a lot worse. I mean, you always kind of have to prepare for it to get a lot worse. You know, like historically a lot of the times, you know, if this escalate, and lasts a long time, usually it would drag the markets into, I mean, I guess at best case, flat, worst case, you know, you get, you get a bare market. But I mean, if your time horizon is long, doesn't really matter anyway. In terms of the Canadian banks, like, I'm just shocked how well the Canadian segments have done for so long, which is why you see like banks like CIBC,

Royal and National do so well. Like if you think about how bad of shape the Canadian economy has been in for quite some time for like all these banks to just continue reporting like double digit earnings growth in the Canadian segments. Yeah, it's pretty wild. I don't think anybody would have better. Yeah. Yeah.

Yeah. No. It just shows you how hard it is to predict because if you ask most people like what would struggle on the Canadian side of things, they probably would have said P&C banking in Canada, but it's done. exceptionally well. Yeah. I'll just say for those on the podcast, thank you for listening. Yeah, thank you for all the support. If you want to catch us, we'll try to do a bit more of these YouTube lives. We'll probably get better as we do them more often as well. So make sure you join

our YouTube channel and thanks for listening. So we'll just stay on for a little bit here. The one thing I guess I'll say for the podcast listeners is like drop a comment, because this will go on YouTube posted afterwards and like drop a comment like on the time like if the time was bad like what would be a better time to launch the lives like we really don't know so feedback would help for sure because we have no idea we just kind of launched this and if noon is a bad time then maybe suggest a different one because i think we're pretty flexible yeah yeah exactly and you'll be able to see recorded i think we'll figure out post it on stock trades channel as well the recording because the collaboration doesn't work if we're doing the live ones you can

go unless you like kind of do a multi live string but we're trying to keep this on the tsi podcast channel but yes well i guess we'll end it here for um the actual podcast portion the canadian investor podcast should not be construed as investment or financial advice the host and guest featured may own securities or assets discussed on this podcast always do your own due diligence or consult with a financial professional before making any financial or investment decisions.