Canada’s biggest banks

allocated a higher amount of money for

staff bonuses

in fiscal 2025 compared to 2024, as they made higher profits due to better performances in their

capital markets

and

wealth management

businesses despite Canada’s uncertain economy.

Overall, performance-based, incentive and variable

compensation

among the

Big Six

increased by about 15 per cent in 2025 compared to 2024, which is higher than the 12 per cent increase in 2024 from 2023.

National Bank of Canada

allocated about $1.9 billion for performance-based compensation in 2025, about 24 per cent higher than the $1.54 billion reported last year. Similarly,

Bank of Montreal

and

Bank of Nova Scotia

increased their bonuses to $4.1 billion and $2.59 billion, respectively, reflecting respective increases of 10.81 and 19.35 per cent from last year.

Despite

comfortably beating analysts’ expectations

, most bank executives talked about how the economy was still uncertain.

Big Six profits

were largely driven by capital markets, which help large companies raise funds and deal with activities such as trading, and wealth management, which is a financial service for people with significant assets.

For employees in these business segments, especially capital markets, performance-based pay plays a key role in their compensation packages. Banking analysts, in their earnings preview commentary, predicted compensation expenses would increase for the Big Six due to a rise in dealmaking in fiscal 2025.

John Aiken, an analyst at Jefferies Inc., said employees from other segments such as retail banking who deal with services provided to individuals rather than large corporations could also “see some increasing” variable compensation.

“But generally … a far greater proportion of compensation is related to bonuses in capital markets than it is in retail banking,” he said. “If you look at the senior players within capital markets, the vast majority of compensation is coming from bonuses, so they disproportionately participate in the ups and the downs because of the volatility of that sector.”

Royal Bank of Canada

allocated $9.98 billion for variable compensation, which was 13 per cent higher than the $8.83 billion reported in 2024, but comes on top of a 16 per cent increase in 2024 from 2023.

Canadian Imperial Bank of Commerce’s

increase in performance-based compensation was also lower compared to 2024. It allocated $3.5 billion in 2025, a 17 per cent increase from $2.99 billion in 2024, which was about 19 per cent higher than in 2023.

Toronto-Dominion Bank

, which is undergoing a restructuring program that’s expected to reduce three per cent of its workforce, reported incentive compensation of $5.1 billion this year, which is higher than the $4.48 billion in 2024. The 13.8 per cent hike was also higher than the 10.34 per cent hike in 2024.

  • Bank balance sheets benefiting from falling interest rates
  • TD, BMO and CIBC beat analysts’ estimates despite uncertain economy

• Email: nkarim@postmedia.com