Canadian Banks: OSFI capital reset syncs with pro-growth agenda

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Canadian Banks: OSFI capital reset syncs with pro-growth agenda

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Canadian Banks

OSFI capital reset syncs with pro-growth

agenda

Price Objective Change

Capital action supportive of premium stock valuations… 22 June 2026 Corrected

We see OSFI’s action on Friday to lower minimum capital requirements, specifically the Equity

upper bound on the Domestic Stability Buffer (DSB) to 3% from 4%, as supportive of Canada

premium valuations for the group. The relative permanence of the change should allow Banks-Multinational/Universal

investors to confidently discount EPS/ROE upside potential, even though the timing (and Ebrahim H. Poonawala

form) of excess capital deployment remains uncertain. See page 3 for a recap OSFI’s Research Analyst

briefing. Relevant research report: Canadian Banks: BofA Expert Insights: OSFI BofAS+1 646 743 0490

Superintendent Peter Routledge / Time for an OSFI DSB reset? December 2025. ebrahim.poonawala@bofa.com

Michael Campos

…and Carney administration’s growth agenda ResearchBofAS Analyst

In addition to syncing with easing capital requirements globally, OSFI’s action signals +1 646 855 3912 michael.c.campos@bofa.com

that the Canadian economy should have ample credit availability to support an

Gabriel Angelini

investment cycle—not that there was any shortage even prior to Friday. The focus is Research Analyst

now squarely on whether the pro-business tone championed by PM Mark Carney can BofAS

+1 646 855 3081

translate into a pick-up in investment activity, especially given persistent uncertainty gabriel.angelini@bofa.com

tied to US trade negotiations (CUSMA) that continues to weigh on business sentiment.

Relevant research report: Expert Insights: Canadian bank stocks are flying, the

economy is not. Exhibit 1: PO changes