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Canada's biggest banks defy sluggish economy, reporting higher profits

TORONTO — Canada's six biggest banks saw their profits climb higher over the past year, despite concerns that the sluggish economy, a slowdown in consumer borrowing and rock-bottom interest rates would take a bite out of their books.

Combined, the six largest lenders — Royal Bank, TD Bank, Scotiabank, the Bank of Montreal, CIBC and National Bank — earned $34.88 billion in net income during fiscal 2015, up almost five per cent from $33.27 billion last year.

In revenue, the banks raked in a combined $129.79 billion during the past year, up from $124.72 billion in 2014.

Banking analysts have been warning since late last year that the sharp decline in the price of crude could lead to higher loan losses for the banks as oilpatch companies and laid-off workers may struggle to repay their debts.

Concerns have also been swirling that lending growth will slow as overburdened Canadians are becoming hesitant to take on more debt.

Nonetheless, the banks have continued to report strong, and in some cases record-high, results.

During Royal Bank's fourth-quarter conference call Wednesday, CEO David McKay said the bank's $10.03 billion in net income for the year marks a new record for Canadian companies.

For the quarter, the six banks had $8.61 billion in collective profits, up from $7.73 billion during the same quarter last year. Revenue for the quarter totalled $32.06 billion, up from $30.80 billion a year ago.

Follow @alexposadzki on Twitter.

Alexandra Posadzki, The Canadian Press

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