3 High Yield Canadian Banks

Income investors looking to diversify their dividend stock investments, should consider Canadian stocks. In particular, we like the Canadian bank stocks, as they tend to have lower valuations, and higher dividend yields than their U.S. banking peers.

As a result, income investors should not ignore Canadian bank stocks. The following 3 Canadian banks are attractive for income investors.

Royal Bank of Canada (RY)

The Royal Bank of Canada is the largest bank in Canada by market capitalization, and the country’s largest bank by total assets. RBC offers banking and financial services to customers primarily in Canada and the U.S. and is a member of the Big 5 Canadian banks. 

The financial institution operates in these core business units: Wealth Management (34% of FY 2025 revenue), Personal Banking (30%), Capital Markets (22%), and Commercial Banking (13%). RBC is cross-listed on the Toronto Stock Exchange and the New York Stock Exchange, trading under the ticker RY on both exchanges. 

On 02/26/26, RBC reported fiscal Q1 2026 results. The bank reported year-over-year revenue growth of 7.3%. Management put aside a reserve of C$1.1 billion in the form of provision for credit losses (“PCL”), up 3.8% year over year (“YOY”). Additionally, non-interest expense rose 2.2%. 

Net income climbed 13% YOY with diluted earnings-per-share (“EPS”) climbing 14% to C$4.03. Adjusted net income came in 12% higher at C$5.9 billion, and its adjusted diluted EPS was C$4.08 (up 13%). The bank’s capital position remained solid with a Common Equity Tier 1 ratio at 13.7%, up from 13.2% a year ago. The PCL on impaired loans rose to 0.40% (versus 0.39% a year ago). Its return on equity remained solid at 17.6% (versus 16.8% a year ago).

RBC makes strategic acquisitions to grow its business for the long haul. For example, in September 2022, it announced the completion of its acquisition of Brewin Dolphin, an award-winning wealth-management firm in the U.K., for £1.6 billion. Subsequently, it acquired HSBC Canada for C$13.5 billion in March 2024. From FY2016-2025, RBC increased its adjusted EPS by 8.7% per year.

RY has increased its dividend for 15 consecutive years and currently yields 3.0%.

Toronto-Dominion Bank (TD)

Toronto-Dominion Bank traces its lineage back to 1855 when the Bank of Toronto was founded. It is now a major bank with C$1.9 trillion in assets. The bank produces about C$14 billion in annual net income each year.

TD reported fiscal Q1 2026 earnings results on February 26th, 2026. Canadian Personal & Commercial Banking results were stable with net income rising 12% to C$2.0 billion.

U.S. Banking adjusted net income increased 20% to C$1.0 billion, while Wealth Management and Insurance net income rose 11% to C$757, and Wholesale Banking adjusted net income rose 65% to C$561 million.

For the quarter, TD generated adjusted revenue growth of 11% to C$16.6 billion. Provision for credit losses fell 14% to C$1.0 billion.

Adjusted net income came in 16% higher to C$4.2 billion with the adjusted earnings per share rising 12% to C$2.44. Its

PCL ratio as a percentage of average net loans and acceptances was 0.43%, down from 0.50% from a year ago. Net impaired loans as a percentage of net loans and acceptances were 0.41%, up from 0.38% a year ago.

The adjusted return on equity was 16.9%, down from 17.2% a year ago. The bank’s capital position remained solid with a common equity tier 1 ratio of 14.5%, up from 13.1% a year ago.

TD has increased its dividend for 15 consecutive years and currently yields 3.4%.

Bank of Nova Scotia (BNS)

Bank of Nova Scotia (often called Scotiabank) is the fourth-largest financial institution in Canada behind the Royal Bank of Canada, the Toronto-Dominion Bank and Bank of Montreal.

Scotiabank reported its fiscal Q1 2025 results on 02/24/26. Overall, it was a strong start for the fiscal year based on adjusted results.

Revenue rose 1.8% year over year to C$9.6 billion, while non-interest expenses fell 18% to C$5.3 billion. Provision for credit losses rose 1.2% to C$1.2 billion.

Net income came in C$2.3 billion, up from C$993 million a year ago. Approximately 81% of the bank’s Q1 earnings were from North America: 47% from Canada, 14% from the U.S., 11% from the Caribbean, and 10% from Mexico.

Canadian Banking earnings rose 5% YOY to C$960 million, primarily driven by revenue growth and expense management, offset by higher PCL.

International Banking earnings climbed 7% YOY to C$737 million, thanks to margin expansion and positive operating leverage.

Global Wealth Management adjusted earnings climbed 18% YOY to C$491 million, driven by revenue growth from higher mutual fund fees, brokerage revenues, and net interest income across its Canadian and International wealth businesses.

Diluted earnings per share was C$1.73, up from C$0.66 a year ago. Return on equity (ROE) was 11.1% compared to 5.5% a year ago. Adjusted net income came in at C$2.7 billion, up 14% from a year ago. Adjusted EPS rose 16% year over year to C$2.05.

Scotiabank forecasts double-digit EPS growth in fiscal 2026.

BNS stock currently yields 4.2%.