Adds comments from banks' conference calls throughout, shares, PIX

By Nivedita Balu

Dec 4 (Reuters) - Canadian lenders TD Bank <TD.TO>, Bank of Montreal <BMO.TO> and CIBC <CM.TO> topped analyst estimates for fourth-quarter profit on Thursday, boosted by their capital markets businesses that benefited from a rebound in dealmaking and higher trading revenue.

All of Canada’s big six banks - including Royal Bank of Canada <RY.TO>, Bank of Nova Scotia <BNS.TO> and National Bank NA.TO - have wrapped up fiscal 2025 with earnings that exceeded expectations. This was despite challenges from a sluggish economy in Canada and tariff uncertainties due to trade policy changes by the United States.

Top banking executives said Canada's economy remains resilient and were encouraged by Prime Minister Mark Carney's initiatives to invest in Canada and diversify trade relationships to strengthen the economy, as trade uncertainty persists pending the review of the U.S.-Canada-Mexico trade agreement.

"There continues to be a high degree of uncertainty... particularly to industries facing the highest tariffs, such as steel and aluminum. While economic uncertainty has impacted business and consumer confidence, Canada's economy and employment remain largely resilient," TD's CEO Raymond Chun told analysts.

BMO's executives said they expect capital markets and wealth management to remain strong in 2026. Both segments, which are high-margin and fee-based, have boosted earnings.

But uncertainty remains.

"The trade uncertainty is never really helpful, but we do take that into account. We're going to have to monitor it very closely, though right now we're on track," TD's CFO Kelvin Tran said in an interview, highlighting the bank's forecast for 2026 of 6% to 8% earnings per share growth shared during investor day in September.

TD is also undergoing a remediation in the United States after regulators fined the lender $3 billion for failures in its anti-money laundering system. Tran said conversations were ongoing with regulators and the bank was on track towards its multi-year remediation work. For fiscal 2026, TD expects remediation-related investments of about $500 million before tax.

"We'll focus on what we can control," he said.

In the first quarter, TD expects to record additional restructuring charges of about C$125 million pre-tax. The program is expected to generate total savings of about C$750 million, including savings from a 3% staff cut.

'NOT THE BEST CASE' FOR STOCKS

Canadian banks are fully valued, analysts have said, and have feared that any shortfall in earnings would hurt their stocks.

TD's stock has soared 53.8% so far this year, while BMO has added 27% and CIBC has gained 34%, while RBC, Scotiabank and National have gained an average of roughly 27%. The broader Toronto Stock Exchange has appreciated 26% in the same time period.

"Market sensitive businesses are powering through but as we step back, credit losses may be higher for longer, especially in Canada," said Rob Poole, co-head of equities at Canadian banks investor PICTON Investments. "That's not the best case for these stocks near term."

TD's wholesale banking segment reported adjusted net income of C$529 million, nearly double its earnings a year ago. BMO's capital market segment reported earnings growth of 97% while that of CIBC rose 58%.

TD reported adjusted earnings of C$2.18 per share, beating average analyst estimates of C$2.03, according to LSEG data. BMO earned C$3.28 per share, 25 Canadian cents higher than estimates. CIBC’s adjusted earnings of C$2.21 per share was also above the estimate of C$2.08.

CIBC shares rose 3% and TD was up 1.6%. BMO shares were down 1.5%.

($1 = 1.3971 Canadian dollars)

(Reporting by Pritam Biswas, Ateev Bhandari and Prakhar Srivastava in Bengaluru and Nivedita Balu in Toronto; Editing by Shailesh Kuber, Bernadette Baum and Nick Zieminski)

((Pritam.Biswas@thomsonreuters.com;))