Banks, insurers and financial intermediaries lift operating profit by nearly $6 billion in three months
Canada’s financial services were the driver of a rebound for corporate Canada in the third quarter of 2025.
The overall corporate sector recorded operating profit of $200 billion in Q3, an increase of $7.4 billion (+3.8%) from the previous quarter according to new figures from Statistics Canada. Financial industries were the primary source of this growth, outperforming the non-financial side of the economy and highlighting how crucial financial services have become to Canada’s overall corporate performance.
Nearly half of all corporate operating profit in the quarter originated within the financial sector with operating profit in up by $5.4 billion (+6%) to reach $95.5 billion, while non-financial industries posted a more modest increase of $1.9 billion (+1.9%), bringing their total to $104.5 billion.
Banking and other depository credit-intermediation companies posted a $2.7 billion (+10.1%) rise in operating profit. This improvement was supported by reduced provisions for credit losses (-3.9%) along with notable gains in non-interest income (+48.6%) and net interest income (+7.6%).
Firms involved in other types of financial intermediation, including those that buy or sell financial contracts, increased profit by $2.0 billion (+9.6%), helped by an 8.3% rise in investment related non-interest income.
Property and casualty insurers also generated a strong quarter, adding $821 million (+19.3%) to operating profit as revenues climbed 2.3% and investment income gained 5.1%, partially offset by a 6% increase in claims and related expenses.
However, not all financial services segments improved. Operating profit in the securities and commodity exchanges and portfolio management industry declined by $363 million (-2.6%), reflecting a 3.2% drop in non-interest income.
Lower credit-loss provisioning, stronger fee-based revenue and improved investment income played central roles in lifting banking and insurance performance. At the same time, portfolio management firms appear to be feeling the effects of market pressures or shifting income dynamics.
Statistics Canada notes that starting in the second quarter of 2025, the series now reports operating profit (excluding tax and non-operating items) to improve comparability between industries. The next release, covering Q4 2025, is scheduled for February 25, 2026.
