Unable to post the entire article so here's the link.
https://www.adviceforinvestors.com/news/blue-chip-stocks/keep-buying-canadas-big-banks-2/#gsc.tab=0
Keep buying Canada's big banks
Canada’s big banks have regularly earned more and paid higher dividends. There’s fear that a recession will hurt their financial results. This gives you an opportunity to buy the banks cheaply. Our view is that there are also a number of factors working for the banks.
The big five banks are all expected to earn more this year and trade at attractive (price-to-earnings or P/E) multiples. They also regularly raise their dividends. The big five banks areCanadian Imperial Bank of Commerce (TSX—CM; NYSE—CM), Royal Bank of Canada(TSX—RY; NYSE—RY), Toronto-Dominion Bank (TSX—TD; NYSE—TD), Bank of Montreal (TSX—BMO; NYSE—BMO) and The Bank of Nova Scotia (TSX—BNS; NYSE—BNS).
The banks’ dividends provide generous yields (roughly four to five per cent). Growing numbers of income-seeking retirees will continue to bid up their share prices in the years ahead. Outside of the big five is National Bank of Canada (TSX—NA) also remains a buy for long-term share price gains as well as high and growing dividends.
One positive factor for the banks is that interest rates are higher and rising. This should strengthen the banks’ traditional business. It widens the difference between the interest banks pay on liabilities such as deposits and the interest they earn on assets such as loans. Over complete fiscal cycles, the net interest margin should improve.
We expect interest rates to go up further. The Bank of Canada, the Federal Reserve and the European Central Bank plan to raise interest rates by larger-than-usual amounts. That’s because it looks like they were ‘asleep at the switch’. Inflation surged faster than expected. Now the central banks want to eliminate it before it permanently unmoors long-term inflation rate expectations. Even so, inflation doesn’t unduly affect the banks.
Many are in decent financial shape
Many Canadians are in decent financial shape. Those who worked from home spent less on transportation, at restaurants and bars, on clothing and dry-cleaning and so on. They built up substantial savings.