TORONTO — Canada’s banking sector is showing unexpected resilience as Bank of Montreal and Bank of Nova Scotia reported stronger-than-expected quarterly results despite mounting trade and economic pressures.

BMO and Scotiabank both beat analysts’ profit expectations, supported by stronger capital-markets activity and solid performance across their Canadian operations. BMO reported a 45% increase in capital-markets income, while its Canadian banking business grew 15%. Scotiabank recorded 37% growth in global banking and markets income, with Canadian operations up 12%.

The results come as Canadian financial institutions navigate an uncertain economic environment, including the escalating Canada-U.S. tariff dispute and concerns about its potential impact on businesses and consumers.

BMO shares rose following the results, while Scotiabank also gained in the market. Scotiabank CEO Scott Thomson described the quarter as a record quarter, with the bank reporting a 14% return on equity.

BMO has also announced plans to repurchase up to 25 million shares, representing approximately 3.6% of its outstanding shares, subject to regulatory and exchange approval.

The results provide a positive signal for Canada's financial sector, although banks remain exposed to changing economic conditions, credit risks and the potential fallout from prolonged trade tensions.