Banks beat across the board in Q2, outlook is mixed
The big-6 Canadian banks beat across the board in Q2, though in a less convincing fashion than last quarter despite continued strength in wealth management and capital markets - with AUM, trading activity, and advisory work all up big Y/Y. The durability of those earnings tailwinds was a focus for analysts which represents downside risk for the group, given the majority of NIM expansion is in the rearview and credit risk remains sticky. Alongside some company-specific factors for CIBC (H2 guide, Caribbean sale) and National (expense growth), those dynamics drove weak trading - as investors assess whether the backdrop is supportive of peak post-GFC multiples.
