Summary
Fitch Ratings upgraded debt and deposit ratings for seven Canadian banking groups and five related subsidiaries after publishing revised bank rating criteria on May 8, 2026. The rating actions were driven by enhanced creditor protections stemming from resolution debt buffers at the country’s major banks, according to Fitch.
Details of the upgrades
Five of Canada’s largest banks - Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce - saw their long-term senior unsecured debt and deposit ratings raised to "AA+" from "AA". In parallel, these institutions had their derivative counterparty ratings increased to "AA+(dcr)" from "AA(dcr)", which Fitch noted are two notches above their stated "aa-" viability ratings.
National Bank of Canada received an increase to "AA" from "AA-" for its long-term senior unsecured debt and deposits, while its derivative counterparty ratings were moved to "AA(dcr)" from "AA-(dcr)". Federation des Caisses Desjardins du Quebec had its deposit rating lifted to "AA+" from "AA".
Short-term deposit and senior unsecured debt ratings were affirmed at "F1+" across all institutions covered by the actions.
Impact on U.S. subsidiaries
Several U.S. bank subsidiaries tied to these Canadian parents also benefited from the revisions. City National Bank, TD Bank N.A. and BMO Bank N.A. had their long-term deposit ratings upgraded to "AA+" from "AA", reflecting support from parent banks' resolution debt buffers and the existence of depositor preference in the U.S. CIBC Bank USA's long-term deposit rating rose to "AA" from "AA-".
Resolution buffers and criteria changes
Fitch highlighted resolution debt buffers as a central factor in the rating actions. At the end of the first quarter of 2026, these buffers at the major Canadian lenders ranged from 15% to 19% of risk-weighted assets, providing what Fitch described as greater creditor protection.
The revised rating criteria introduced finer notching differentiation among deposits, senior unsecured debt and senior resolution debt for banks operating in jurisdictions with developed resolution regimes. Despite the moves on debt and deposit ratings, long-term issuer default ratings for the named Canadian banks remained unchanged; Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce retained "AA-" issuer default ratings.
Key takeaways
- Fitch's upgrades reflect increased creditor protection from resolution debt buffers at major Canadian banks.
- The updated criteria introduced greater notching differentiation for deposit and senior debt instruments in developed resolution regimes.
- U.S. subsidiaries of the Canadian parents also received upgrades to long-term deposit ratings, tied to parent buffers and depositor preference.
Context and limits
The rating actions described above follow the publication of Fitch's updated bank rating criteria on May 8, 2026. The agency's reference to resolution debt buffers and their proportions of risk-weighted assets at first quarter 2026 are part of the factual basis Fitch used for its assessments. Fitch did not change the long-term issuer default ratings for the five largest Canadian banks mentioned.
Note: Short-term deposit and senior unsecured debt ratings remain at "F1+" for all institutions referenced.