Highest profit margin banks will continue to outperform, says BMO analyst

Daily roundup of research and analysis from The Globe and Mail's market strategist Scott Barlow BMO bank analyst Sohrab Movahedi expects the sector winners - the highest margin banks- to keep on winning, "With Q2/25 behind us, we reflect on three key takeaways from the quarter: (1) Profitability: the "Big 6" delivered an ROE of 12.5 per cent on ROA of 64bps, with capital ratios comfortably above regulatory minimums and higher performing reserve builds; (2) Credit: performing reserve builds (led by Royal Bank of Canada) resulting in elevated PCLs given trade-related uncertainties and a softer economic outlook; and (3) Trading:…