Are Canadian bank stocks falling?

Bank buildings in Toronto's financial district. Canadian bank stocks may have further to fall. Photo by Peter J. Thompson/Financial Post Struggling bank stocks haven’t hit the floor yet because of the threat of recession and the uncertainty around interest rates, analysts say.

Why are bank stocks crashing this year?

Bank stocks are crashing this year. For the year, the S&P/TSX Capped Financials Index is up only 0.8% and down 8.4% from its March 2023 highs. It’s not hard to see why this is happening. In March and April of this year, several U.S. banks failed after they suffered bank runs and lacked the liquidity needed to pay off depositors.

Why do Canadian banks have a higher dividend yield?

Part of the reason these Canadian banks have a higher dividend yield than the rest is because the share price is indeed down. That being said, shares are now undervalued at these levels. BMO stock and CIBC stock both offer huge returns in the near future as the market recovers.

Are Canadian banks affected by the banking crisis?

Canadian banks weren’t affected by the banking crisis, but sentiment toward them dimmed when investors became aware of the risks caused by rising interest rates. Second, Canadian banks’ earnings have been lukewarm this year. Whereas the biggest U.S. banks mostly saw high double-digit earnings growth last quarter, Canadian banks barely grew.