Canadian Banks Raise Dividends After Q2 Results
Canadian banks raise dividends after stronger Q2 results as lower credit-loss provisions and higher fee revenue support payouts and income-focused flows.
KEY TAKEAWAYS
- BMO reported Q2 net income up 34% to C$2.63 billion and diluted EPS of C$3.53.
- The board declared a quarterly common dividend of C$1.71 per share, up C$0.04 sequentially.
- Scotiabank also raised its common dividend after Q2 net income rose to C$2.63 billion and EPS to C$2.00.
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BMO Financial Group and The Bank of Nova Scotia raised common dividends after reporting stronger second-quarter results on May 27, 2026, as Canadian banks raise dividends amid earnings gains driven by lower provisions for credit losses and higher fee revenue.
BMO Q2 Results and Dividend
For the quarter ended April 30, 2026, BMO Financial Group reported net income of C$2.63 billion, a 34.0% increase year over year, with diluted earnings per share rising 41.0% to C$3.53, the company said in its results release. The provision for credit losses fell by C$315 million to C$739 million, supporting the earnings improvement alongside stronger fee-based revenue. Reported return on equity rose to 13.0%, while the common equity tier 1 capital ratio stood at 13.0%.
The board declared a quarterly common-share dividend of C$1.71 for the third quarter of fiscal 2026, up C$0.04, or 2.0%, from the prior quarter and C$0.08, or 5.0%, from a year earlier. It also set a C$0.426 dividend on Class B preferred shares.
Year to date, BMO reported net income of C$5.12 billion, up 25.0% from the prior year, with adjusted net income of C$5.28 billion. Reported earnings per share for the period were C$6.92, and adjusted EPS was C$7.15. Provisions for credit losses declined by C$580 million to C$1.49 billion, lifting reported and adjusted returns on equity to 12.5% and 12.9%, respectively. The bank’s analyst presentation highlighted broad-based segment contributions and progress toward profitability targets.
Scotiabank Q2 Results and Dividend
Scotiabank reported net income of C$2.63 billion for the quarter ended April 30, 2026, up from C$2.03 billion a year earlier, with diluted earnings per share rising to C$2.00 from C$1.48, according to its press release and shareholder report. The profit increase was broad-based across business lines and supported by lower provisions for credit losses.
The bank increased its common-share dividend, consistent with its quarterly earnings performance, as disclosed in the shareholder report. Management noted a more uncertain credit backdrop but emphasized revenue growth and expense discipline.
The coordinated dividend increases by BMO, Scotiabank, and other large Canadian lenders, including National Bank of Canada, reflect easing credit pressures and stronger fee revenue that have created capacity for higher shareholder distributions as Canada’s big-bank earnings season opened.
