Adds details from conference calls in paragraph 5-6, additional details, graphic

By Nivedita Balu and Pritam Biswas

May 28 (Reuters) - Canadian lenders Royal Bank of Canada RY.TO, TD Bank TD.TO and CIBC CM.TO on Thursday beat second-quarter profit estimates, helped by strong domestic growth and bucking concerns arising from trade uncertainty and the impact of Middle East conflicts on the economy.

The six large banks, which dominate the Canadian banking landscape, all surpassed analysts’ estimates for second-quarter profits, navigating a challenging economic landscape hit by higher commodity prices that have weighed on consumers’ finances.

“At this point of the cycle, and with inflation, that is for sure putting pressure on consumers, but if you look at our PCL… it is below the midpoint (of our expectation), so that means that the consumer continues to be resilient, even though there's pressure,” TD Bank’s CFO Kelvin Tran said in an interview.

“The way to not get into trouble is actually thinking about it when you underwrite the loans at the beginning,” he said.

However, the near-term outlook for Canada hinges on U.S-Canada trade talks and how long the Middle East conflict persists, which will have an impact on client demand, supply chain stability, and the direction of monetary policy, bank executives said.

"So far, weakness in tariff-exposed sectors has not spread to the broader economy... However, uncertainty remains elevated," RBC CEO Dave McKay told analysts.

STRONG EARNINGS

The banks reported income growth at their personal banking segments in Canada, the segment most exposed to consumer wallets, and benefited from loan growth or lower loan loss provisions from a year ago when trade disruptions had weighed on performing loans.

Personal banking segments grew 17% and 15% at RBC and CIBC, while commercial banking rose 43% and 12%, respectively. At TD, that business grew 15%. Capital markets earnings rose between 23% and 46%.

Net interest income - the difference between what the bank earns on loans and pays out on deposits - rose 5.5% at RBC, 14.7% at CIBC and 9% at TD.

RBC's adjusted earnings of C$3.90 per share topped average analysts' estimates of C$3.78, according to LSEG data. TD's earnings of C$2.38 beat estimates of C$2.26, while CIBC's earnings of C$2.54 per share comfortably beat the estimate of C$2.44.

Some banks have also added performing reserves to reflect ambiguity around the duration of the Middle East conflict.

CIBC SELLS CARIBBEAN UNIT

CIBC said it would sell 91.7% of its stake in CIBC Caribbean to Bermuda-based Bank of N.T. Butterfield & Son NTB.N for about $1.6 billion, as the Canadian lender prioritises its North American business.

The move would consolidate CIBC's business within the North American corridor, a region that has been largely preferred by the Canadian banks for growth prospects as options to expand in the domestic market became limited.

Earlier this month, CIBC agreed to buy a minority stake in U.S. health management firm Ampersand Partners, growing its exposure south of the border.

Scotiabank BNS.TO in 2023 laid out a fresh plan under its new CEO to focus on the North American trade region and exit some unprofitable businesses in South America. Since then, the bank has sold some businesses in Colombia and Costa Rica and bought a stake in U.S.-based regional bank KeyCorp.

The deal includes $1 billion in cash and the rest will be paid with Butterfield’s shares, CIBC said. The deal is expected to close in the first half of 2027.

Once the deal closes, RBC and Scotiabank will be the only two Canadian lenders with exposure to the region.

($1 = 1.3861 Canadian dollars)