Getting people to agree about things can often be a challenge. But the more people that agree about a thing, the more it genuinely looks like an issue. And for the big six Canadian banks—TD Bank (TSE:TD), Canadian Bank of Commerce (TSE:CM), Royal Bank of Canada (TSE:RY), Bank of Nova Scotia (TSE:BNS), Bank of Montreal (TSE:BMO) and National Bank of Canada (TSE:NA)—the issue of the day is tariffs. Friday morning’s trading brought mixed performances for the big six as they looked to the Canadian government in unison to address the issue.
For a while, tariffs looked like they might have been a theoretical problem only. The United States’ new president, Donald Trump, went looking for key concessions on border security and stopping drugs, and in many cases, got said concessions. But then the topic changed to issues of trade imbalances, and the tariffs came roaring back.
The big banks, therefore, got together to petition the Canadian government mainly for relief from their “regulatory burden,” reports noted. With tariffs potentially able to mean job losses and hampered growth in Canada, Canadian banks want to be able to respond without playing “Mother, May I” with Ottawa. More specifically, the banks want a “head of deregulation” to be appointed, someone to cut through the “unproductive red tape” that Canadian banks routinely face.
Is It Really a Problem?
So while the big banks look to get Ottawa’s boot—or perhaps hockey skate—off their collective neck, the banks seem to be doing pretty well as things stand. One report noted that all six banks turned in earnings reports recently—some of which we covered right here—and all six managed to beat expectations. Some of them even managed to succeed while dealing with a lot of collateral issues, like TD Bank.
While the impact from the tariffs has not really been felt yet, and the banks are looking to get out in front of potential problems, we may see such impact soon enough. For the banks, therefore, to try and address the problem before it hits is more prudent than anything else.
Which Canadian Bank Stocks are a Good Buy?
Turning to Wall Street, the leader in the sector is BNS. This Moderate Buy-rated stock offers a 17.2% upside potential against an average price target of C$154.12 per share. Meanwhile, the laggard, with just a 1.8% upside potential, is TD, as this Moderate Buy-rated stock has an average price target of C$87.86 per share.
