Canadas big banks to build reserves amid tariff uncertainty – National [Video]

Canada’s big six banks are expected to build more credit loss provisions as they brace for uncertainty surrounding the U.S. tariff threat, analysts said, potentially weighing on first-quarter earnings and beyond.

The banks have already been putting aside more funds to cover any souring loans due to continued high Canadian unemployment, which has fuelled investor concerns despite some more robust economic data recently. Also called provisions for credit losses, a rise in those funds dents profits for the banks.

U.S. President Donald Trump’s threat to impose a 25 per cent tariff on all non-energy Canadian imports starting in March means banks are likely to set aside yet more rainy-day funds, even as they are expected to benefit from a boom in capital markets activity and strong wealth management earnings in the first quarter.

“(We) expect large banks to build larger performing provisions for credit losses than we previously believed… we also believe pessimistic scenario assumptions may …