01:57 PM EDT, 06/23/2025 (MT Newswires) -- In his review of the Canadian banks' second quarter results, BMO analyst Sohrab Movahedi flags three key takeaways from the quarter.

The "Big 6" delivered an ROE of 12.5% on ROA of 64bps, with capital ratios above regulatory minimums and higher performing reserve builds; the second was that performing reserve builds (led by RBC) resulted in elevated PCLs given trade-related uncertainties and a softer economic outlook; and market volatility drove increased trading revenue (led by National Bank).

Movahedi notes that the banks look prepared for an anticipated slowdown with strong allowances for credit losses, and capital and liquidity levels well above regulatory requirements.

"We see limited re-rating opportunities and expect the higher ROE banks, namely NA, RY, and CM to retain their relative valuation gains for the foreseeable future. '

National Bank, CIBC, RBC and TD remain Outperform-rated, with Movahedi expressing a "slight preference" towards the more Canadian-centric higher-ROE banks (RBC, National Bank and CIBC.)

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