Aggregate adjusted earnings across the group (including Desjardins which reported quarterly earnings in June) decreased 7% year-over-year and 5% quarter-over-quarter.
Most banks saw capital markets revenues decline, despite an investment banking backlog, with uncertainty about valuations and delayed closings weighing on market sentiment.
The largest declines in capital markets earnings were posted by RBC (58%) and BMO (53%) with large US loan underwriting markdowns among the factors.
Mortgage growth
Loan growth offset some of the declines across the big six, but while mortgage loans proved resilient in the quarter, the softer housing market conditions already being experienced are set to impact future gains.
Fitch’s opinion is that “the banks’ mortgage books entered the housing market slowdown in healthy shape, with manageable uninsured exposures to high loan-to-value and low credit scoring borrowers.”
