🍁 Net Interest Margin (NIM) of Big 6 Canadian Banks (Q3 2022 - Q3 2024)

October 7, 2024
🍁 Net Interest Margin (NIM) of Big 6 Canadian Banks (Q3 2022 - Q3 2024)
  • πŸ”Ή NIM is around 1.5% for Big 5, including trading capital.
  • πŸ”Ή Excluding low-interest-earning trading assets, NIM rises above 2%.
  • πŸ”Ή Despite rate hikes and cuts by the Bank of Canada (and the Fed), NIM has remained stable.
  • πŸ”Ή Write-off rates remain low at 0.09% to 0.29% (last year), reflecting cautious risk strategies.

NIM & Write-offs Percentages for 2024 Q3:

  • TD: NIM (1.71%) & Write-offs (0.18%)
  • RBC: NIM (1.59%) & Write-offs (0.12%)
  • Scotiabank: NIM (1.48%) & Write-offs (0.31%)
  • BMO: NIM (1.52%) & Write-offs (0.20%)
  • CIBC: NIM (1.50%) & Write-offs (0.18%)
  • National Bank: NIM (0.72%) & Write-offs (0.06%)

NIM is a major factor in bank profitability, but other key elements include:

  • Operating costs: Efficiency is crucialβ€”banks with lower non-interest expenses (e.g., salaries, operations) can increase profits even with a low NIM.
  • Non-interest income: Banks rely on other incomes (e.g., monthly fees, trading income, wealth management) to boost earnings.
  • Default risks: Higher risks can bring higher rewards, but defaults reduce profits. Each quarter, banks account for future credit losses through Provision for Credit Losses (PCL), which is treated as an expense.

Follow us on social media for more posts

Best 5-Year Fixed Mortgage Rates in Canada CanadaLeaf
Select Mortgage Term:
Fixed
Variable

Disclaimer:

  • Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
  • The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
  • Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
  • Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.