12:18 PM EDT, 09/11/2024 (MT Newswires) -- UBS on Wednesday reviewed the performance of Canada's largest banks following the end of the fiscal third-quarter results season for the sector.

"Exiting earnings season, we highlight four key themes: 1) moving through the cycle; credit quality in focus: overall, credit quality metrics held up ok, but there was some dispersion as we saw elevated PCLs at BMO. Third quarter earnings showcased the relative resilience of the Canadian banks (expectations of gradual PCL increases from here); however, we also had reminders about the variability potential in commercial; 2) on the arc of NII... where are we now? there was NII upside for some (helped by ALM/Treasury gains in certain instances). Higher interest rates, modest loan demand and good deposit flows were positives. Going forward, differentiators will be volume growth, mix and NIM dynamics in determining the path of NII; 3) loan loss reserve adequacy... ACLs have been built for nine quarters in a row which should increase confidence in the manageability of macro slowing; also more manageable in light of both earning power and existing balance sheet strength; 4) on capital adequacy... across the group, CET 1 ratios are well above required minimums (average 13.2%); buyback programs for some; book value per share was up 3% qtr/qtr and 10% yr/yr, on median, across the Big Six," the investment bank noted.

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