01:06 PM EST, 01/10/2025 (MT Newswires) -- UBS, in its January Guidance Tracker on Canadian banks, says it is "generally constructive" following Big Six Bank CEO remarks at a conference this week.

"Overall commentary suggests a fairly constructive outlook for 2025 despite numerous uncertainties. Guidance was generally reiterated; more details on macro outlook, strategic plans, ROE improvement levers, capital allocation, mortgage market, etc," UBS said.

The brokerage also noted a shift in tone since early December.

There was less talk about credit quality and more air time around potential areas of growth, said UBS. On the former, credit normalization (particularly unsecured consumer credit) will continue, but incremental reassuring commentary around mortgage resilience; highlighted by the fact that a meaningful portion of the 2025 renewal wave entails consumers renewing at lower rates (vs. higher). Regarding growth, while uncertainties remain (tariffs/trade, geopolitics, etc.), the banks are excited about the growth prospects in the U.S., while highlighting continued growth opportunities in Canada.

The banks expressed preparedness for the upcoming mortgage renewals; with goals for high retention rates and perhaps customer acquisition. There is enthusiasm for markets sensitive businesses including capital markets and wealth management. Organic growth is the priority, but uses of capital could also include buybacks for some.

F2025 Guidance remains unchanged, as expected:

Adjusted cash EPS: Average guidance range is mid-single digit year-over-year growth;

NIM: Stable to biased up;

Loan growth: Demand to pick up with economic growth;

Expenses: Average range of mid-single digit year-over-year growth;

PCLs: Average impaired PCL guidance is ~35 bps; total PCL guidance ~45 bps, on average, and

Capital: CET1 ratio > 13% operating level for F2025; BMO, CIBC, RBC deploying capital via share buybacks.

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