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Canada’s Big Six banks had a blockbuster start to the year, with all of them exceeding earnings expectations for the first quarter.

Together, the banks hit about $19 billion in profit, up from approximately $14 billion in the same period last year.

One analyst says it is because they have done a “wonderful job” managing their capital.

“We’ve said for years and years that Canadian banks are the most excellent stewards of capital in the world,” Brian Belski, CEO and chief investment officer at Humilis Investment Strategies told BNN Bloomberg.

He says last year, banks were beginning to use excess reserves they built the year prior, and the benefits are now flowing through into the first fiscal quarter of 2026.

Going forward, Belski says Scotiabank will “set the trend” for the rest of the banks, signalling a positive capital markets backdrop and strong volumes for the quarter.

Scotiabank: Expected to ‘set the trend’

Scotiabank’s first-quarter net income surged to $2.3 billion from $993 million a year ago, primarily because last year’s results were dampened by a $1.4 billion impairment charge.

The bank’s Canadian banking division reported a profit of $960 million, marking a five per cent increase from the $913 million earned during the same period last year.

“They’ve kind of righted some of the branding ships and some of the issues that they’ve had there,” says Belski, adding that currently, Scotiabank is one of the favourable bank stocks.

“This is a company that has consistently raised its dividend over time and has great free cash flow yields above the dividend yield,” says Belski.

He says, tactically, over the next 12 to 18 months, the Royal Bank of Canada and National Bank of Canada are good stock picks.

CIBC: ‘Probably had the best quarter among the group’

CIBC reported a 43 per cent surge in first-quarter profit, reaching $3.1 billion for the period ending Jan. 31, 2026, which is up $2.17 billion from the year before.

The bank says growth was fuelled by a strategic pivot toward wealthy clients and U.S. operations.

“CIBC, we think, probably had the best quarter among the group,” says analyst Mike Clare who is senior vice president and portfolio manager at Brompton Funds.

Clare says the bank showed strong results across all business units and a strong performance in its strategy of targeting the mass affluent customer in Canada, which tends to be a higher profitable customer, lower credit losses, better returns.

Royal Bank of Canada: ‘The bar is very high for them’

The Royal Bank of Canada’s quarterly profit climbed to $5.79 billion, up from $5.13 billion year over year.

It says its earnings rose to $4.03 per share for the period ending Jan. 31, 2026, compared to $3.54 in the first quarter of 2025.

“First of all for Royal Bank, which we still think is the number one bank in Canada, fundamentally, does trade at a premium valuation, so the bar is very high for them,” says analyst Mike Clare who is a senior vice president at Brompton Funds.

He says one point of weakness for the bank is that its credit losses remain somewhat elevated.

Clare says the bank has had several quarters of declining new impaired loans, but saw an uptick in the current quarter driven by residential mortgages, particularly in Ontario, which has seen a large impact from tariffs.

“Having a loan go impaired doesn’t necessarily mean you take a loss… but it’s something to watch to see if that trend continues in the coming quarters,” says Clare.

National Bank and BMO: ‘Their ROE targets went a little bit higher’

National Bank of Canada’s quarterly earnings reached $1.25 billion, a jump from $997 million a year earlier, helped by its acquisition of Canadian Western Bank.

It outperformed its peers in the domestic market, with its personal and commercial segment reporting a 47 per cent jump in net income to $427 million.

The Bank of Montreal’s profits rose and topped expectations, even after paying for staff layoffs.

BMO reported a first-quarter profit of $2.49 billion, an increase from $2.14 billion during the same period last year. For the period ending Jan. 31, BMO’s quarterly earnings reached $3.39 per diluted share, a jump from $2.83 reported during the same window last year.

A lot of things worked in favour of the two banks, including a strong economy and a strong rate structure, says John Zechner, chairman and founder of J. Zechner Associates.

“We really expected they’d be ahead of expectations. But I think what both National and BMO did was even a little bit better than that,” he says.

“Their ROE (return on equity) targets went a little bit higher in the process, and the loan loss provisions dropped.”

Zechner says the issue going forward is determining where growth will come from.

“Clearly, you haven’t got much revenue growth, not much top line growth,” says Zechner.

“So it’s the guys who can best cut costs, increase the ROE, do share buybacks. And probably the banks that have the most upside are the ones that can still consolidate their recent acquisitions.”

TD: ‘Nothing could go right for TD until about a year ago’

Zechner says TD has been doing well now that it has excess capital, commerce has done well, and it has gotten rid of its discount multiple.

“Nothing could go right for TD until about a year ago,” says Zechner.

“I’d be very surprised if they didn’t, you know, meet and beat.”

The bank exceeded expectations, with its net income climbing to $4.04 billion this quarter, a significant increase from $2.79 billion a year earlier.

On a diluted basis, earnings reached $2.34 per share, up from $1.55 in the same period last year.

Zechner says earnings will be driven by capital markets, trading, and activities that are cyclical in nature.

“There is not much top line growth, and that’s probably the worry down the road because they’re going to get an incursion from electronic banking and other things,” says Zechner.