Canadian Bank Earnings: Why BMO Now Leads the Pack for Value in 2026

Canadian bank stocks have rallied sharply following strong earnings from BMO, TD, and CIBC, reversing some of the skepticism that’s lingered over the sector for the past few years. Improving credit trends, more resilient U.S. operations, and early signs of revenue diversification are all helping restore confidence.

But while momentum is encouraging, investors still need to differentiate between banks that are simply recovering and those that are genuinely positioned to outperform into 2026.

After reviewing this quarter’s results and breaking them down on BNN Bloomberg, here’s where I see the most attractive opportunities today.

Key Takeaways

• BMO now offers the strongest value opportunity among the big banks, with cleaner credit trends, strong U.S. performance, and diversified revenue streams.
• TD remains a hold, but offers selective upside for investors comfortable with a more speculative, longer-term view.
• CIBC stays a hold, with solid earnings but higher relative risk due to domestic mortgage exposure and less revenue diversification.
• Royal Bank is still a high-quality franchise, though current pricing makes it less compelling for new investment compared to BMO.
• Valuations across the sector require caution after a strong equity run. Opportunities will improve as prices normalize.

BMO: From Hold to Buy and Our Top Value Pick

We officially moved BMO from hold to buy following this quarter’s results  and the shift came with conviction.

What changed?

• Credit conditions have cleaned up significantly, especially in the U.S.
• The business is showing strong and balanced revenue diversification, which we put real weight on.
• Relative to peers, valuation now looks exceptionally compelling.

BMO has been a core position for us for years, but today it offers something even more important: a high-quality franchise at a price that still makes sense. This is where new capital is going to work in our portfolios.

TD: A Strong Report, But Still a Hold

TD delivered a solid quarter, and long-term shareholders should feel good about where things are heading. The bank is navigating its U.S. challenges well, and the trust-rebuild process is underway.

For now, though, TD remains a hold.

Before upgrading, I’d like to see:

• More meaningful contributions from wealth management
• Better growth from insurance
• A broader mix beyond net interest income

TD will figure this out  they always do but from a value perspective, BMO is simply more attractive today.

CIBC: Solid Performance, But Higher Relative Risk

CIBC posted another strong quarter and continues to improve operationally. However, the bank’s heavy exposure to the Canadian mortgage and lending market introduces more risk at a time when household debt remains elevated.The lack of broad revenue diversification compared to peers also tempers enthusiasm.

CIBC remains a hold, though investors willing to take on more risk may see potential upside. For most portfolios, more balanced banks offer better risk-adjusted value today.

Royal Bank: High Quality, But Valuation Matters

Royal Bank is a perennial favourite  and for good reason. It’s one of the highest-quality franchises in the country, with strong diversification and consistent execution.But quality doesn’t always mean buy today.

Right now, valuation is the only barrier. If Royal were priced more attractively, it would quickly move up the priority list. Until then, we continue to hold it as a core long-term position while deploying new dollars elsewhere.

Why Investors Should Be Cautious After the Rally

The recent run in Canadian bank stocks is encouraging, but it shouldn’t overshadow one important reality: pricing matters. Even great companies become harder buys when valuations stretch. Domestic lending risk, slower credit growth, and elevated consumer debt levels are all areas that investors need to keep on the radar.

This is not a sector to chase  it’s a sector to enter selectively.

The Bottom Line

The latest earnings season showed meaningful improvement across the banking sector, but the opportunities are not evenly distributed.

Our stance today:

• BMO - Buy
• TD - Hold
• CIBC - Hold
• Royal Bank -Hold

As always, our approach is grounded in long-term value, diversification, and disciplined entry points. If you’re reviewing your bank exposure or wondering how these developments affect your portfolio, we’re here to help.

Catch the full BNN Bloomberg segment

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^{Grant White is a Portfolio Manager /Investment Advisor at Endeavour Wealth Management with iA Private Wealth Inc., an award-winning office as recognized by the Carson Group. Together with his partners, he provides comprehensive wealth management planning for business owners, professionals and individual families. This information has been prepared by Grant White, who is a Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained here in may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered.}

^{*Insurance products and services are offered through Endeavour Wealth Management Inc, an independent and separate company from iA Private Wealth Inc. Only products and services offered through iA Private Wealth Inc. are covered by the Canadian Investor Protection Fund.}