Major Canadian banks are expected to make significant dividend increases as they report their results this week.
The results are the first since early November, when the Canadian banking regulator lifted restrictions on increased dividend payments and share buybacks that had been imposed as a precaution at the start of the pandemic.
Banks performed well despite COVID-19, leading Royal Bank analyst Darko Mihelic to predict an average increase in payments of 20%, while CIBC analyst Paul Holden said he expects a rise in dividends from banks ranging from 5 to 25%.
Scotiabank analyst Meny Grauman says he’s optimistic about the industry and expects a wave of payment increases, but notes that COVID-19 variants continue to pose risks, as does the potential for runaway inflation and supply chain problems.
Along with rising dividends, analysts believe loan growth could be positive for banks, while slowing capital markets and rising costs could weigh on results.
Scotiabank will kick off earnings week on Tuesday, followed by Royal Bank and National Bank on Wednesday, CIBC and TD Bank on Thursday, and BMO Bank of Montreal on Friday.