When the stock market gets bumpy, most investors find themselves looking for safe ground. Some rush to cash, others hide in gold. But for Canadians who want income, stability, and long-term growth, our biggest banks tend to be the go-to move. Not only have these proven to weather economic storms, but they also tend to dish out reliable dividends, even when markets take a nosedive. If you’re putting together a defensive portfolio, three of the best bank stocks remain Royal Bank of Canada (TSX: RY), Toronto-Dominion Bank (TSX: TD), and Canadian Imperial Bank of Commerce (TSX: CM).
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RBC
Let’s start with Royal Bank of Canada. It’s the largest bank in the country and frankly one of the most dominant businesses on the TSX. In its most recent earnings report for the first quarter of 2025, RBC reported a net income of $5.1 billion, up 43% from the same quarter in 2024. Adjusted net income hit $5.3 billion, and diluted earnings per share rose to $3.62, an impressive 27% jump. Part of that performance came from the successful integration of HSBC Canada, which added $214 million to RBC’s bottom line.
Beyond the numbers, what makes RBC stand out is its ability to stay strong across all its divisions. Whether it’s wealth management, commercial lending, or capital markets, it’s a steady performer. Its return on equity came in at 16.8%, and its CET1 ratio, a key measure of a bank’s ability to absorb shocks, was 13.2%. Those are solid numbers that show RBC has plenty of cushion. If you’re worried about market dips or economic slowdowns, this is exactly the kind of financial foundation you want in your corner.
TD
Next is Toronto-Dominion Bank, which offers a slightly different angle. It’s not only one of Canada’s largest banks, but it also has a big presence in the United States. That makes it a nice way to get some cross-border diversification without leaving the comfort of Canadian dividend stocks. For the first quarter of 2025, TD reported adjusted net income of $3.6 billion. While that’s flat compared to last year, it’s important to look deeper.
Revenue was up 9% year-over-year to $15 billion, thanks largely to strength in its U.S. retail and wealth management businesses. Adjusted earnings per share (EPS) landed at $2.02. TD’s CET1 ratio was 13.1%, and the bank expects it to rise above 14% thanks to the sale of its Charles Schwab stake and a big share buyback. TD also continues to invest in its digital platforms, keeping it competitive as banking increasingly moves online. The stability of the Canadian operations combined with the growth potential in the U.S. makes TD a bank stock with both defensive and offensive strengths.
CIBC
Then there’s CIBC. Often viewed as the underdog of the Big Five, CIBC has quietly turned in strong results that deserve more attention. In Q1 2025, it reported adjusted net income of $2.2 billion, up 23% year-over-year. Adjusted EPS climbed to $2.20, with return on equity at 15.3%. Revenue came in at $7.3 billion, growing 17% from the prior year. CIBC’s performance was supported by solid results across the board – personal banking, commercial banking, and wealth management all delivered.
The bank’s CET1 ratio hit 13.5%, showing it’s well-capitalized and ready for whatever comes next. CIBC may not always be the flashiest bank stock, but it tends to reward long-term shareholders who stick around. With a higher-than-average dividend yield and a history of steady income, it’s a solid pick for anyone trying to weather market ups and downs.
Bottom line
Altogether, these three bank stocks offer more than just safety. They offer income, stability, and a path to long-term wealth. RBC gives you the strength of a well-diversified global bank. TD provides cross-border growth and digital innovation. CIBC offers attractive value and reliable income. All three are comfortably profitable, well capitalized, and committed to rewarding shareholders through dividends. And all three make a powerful combo, especially if you’re investing for the long haul.
