$4 billion for the three-month period which ended in April, which was a significant rise from the $1.5 billion reported the same time last year, when the pandemic was just beginning. Meanwhile, TD Bank, Canada’s second biggest bank, posted a 144 per cent rise in profits from last year, to $3.7 billion for the quarter. The next on the list was the CIBC, which reported an even bigger leap of more than four times to $1.6 billion in quarterly profits. Moreover, the Bank of Montreal’s profits for the quarter stood at just over $1.3 billion, which was nearly two times of what was reported during the same period last year.
This profit bonanza reported by the major banks in the country are considered to be quite significant because in Canada, if the consumers or businesses which have borrowed money are having difficulties in repaying, this will show up on the banks’ books. Therefore, this remarkable growth in profits may suggest that despite the pandemic, Canada’s businesses and consumers are not entirely struggling.
One of the main reasons for this is that most of these banks set aside funds to cover loans which they thought might go bad owing to the impact of the pandemic. However, for the most part, this hasn’t been the case, with just over 2,500 companies going insolvent, which is well below the 3,500 companies that went insolvent in the previous year, even when there was no such global health crisis. This means that majority of the consumers and businesses have been able to stay on top of their debt, thereby enabling banks to move these funds set aside from the liability side to the asset side of the ledger.
