In the last quarter, three of Canada’s largest banks witnessed their profits either more than double or quadruple. Some experts see this as a sign that the worst of the economic impact of the pandemic is behind us. The biggest bank in Canada, The Royal Bank of Canada, reported a profit of $4 billion for the three-month period ending in April. Last year, at the same time period RBC posted $1.5 billion in profit which is far less.
TD Bank, the second-largest bank was not too far behind after profiting $3.7 billion and being up 144 per cent from last year. Then CIBC was next with a quarterly profit of $1.6 billion, which is more than four times the amount they made last year. Scotiabank the last of the big banks has still not reported its earnings for the quarter.
The reasoning for the massive surge in profit can be linked to banks being able to use the money they set aside to cover loans that might go bad. For example, the money would be used for business or consumers not being able to pay their bills. This is known as a loan-loss provision and protects banks as they feared they could default from the pandemic.
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