Canada’s biggest banks have been setting aside hundreds of millions of dollars in case customers can’t pay off their loans, including mortgages.This comes as economic uncertainty and the heightened cost of living weigh on Canadian households and businesses.Royal Bank of Canada, TD Bank, CIBC, Scotiabank, Bank of Montreal and National Bank reported quarterly earnings this week and all said they have topped up their loan loss provisions.At the same time, the banks have reported multi-billion-dollar profits i ...

Core Insights - The complaint alleges that Klarna and its executives violated federal securities laws by making false or misleading statements regarding the risk of increased loss reserves shortly after the IPO [2] - Klarna reported record revenue for its third quarter, exceeding estimates, but also set aside more provisions for credit losses, leading to a net loss of $95 million [3] - Provisions for loan losses amounted to $235 million, surpassing analyst estimates of $215.8 million, which contributed to a 9.3% decline in Klarna's stock on November 18, 2025 [3] Financial Performance - Klarna's revenue surged in the third quarter, beating estimates [3] - The company reported a net loss of $95 million due to increased provisions for potentially souring loans [3] - Provisions for loan losses represented 0.72% of gross merchandise volume, an increase from 0.44% a year ago [3] Legal Proceedings - A lead plaintiff has been appointed to oversee the litigation on behalf of the class of investors affected by Klarna's alleged misconduct [4] - The law firm Faruqi & Faruqi is encouraging individuals with information regarding Klarna's conduct to come forward [5]

Market Overview - The U.S. stock market showed signs of stabilization on Friday, with banks recovering some losses from the previous day [2] - The S&P 500 decreased by 0.2%, while the Dow Jones Industrial Average increased by 23 points (0.1%), and the Nasdaq composite fell by 0.5% [3] Banking Sector - Bank stocks stabilized after several institutions reported stronger-than-expected profits for the latest quarter, including Truist Financial, Fifth Third Bancorp, and Huntington Bancshares [5] - Zions Bancorp. saw a 2.8% increase after a 13.1% loss, while Western Alliance Bancorp rose by 1.3% following a 10.8% decline [6] Loan Quality Concerns - Increased scrutiny on the quality of loans made by banks followed the Chapter 11 bankruptcy filing of First Brands Group, a supplier of aftermarket auto parts [8] - Jefferies Financial Group, potentially affected by the bankruptcy, rose by 5.1% after losing approximately 30% of its value since mid-September [8] Economic Sentiment - There is uncertainty regarding whether the issues faced by lenders are isolated incidents or indicative of broader industry problems [9] - JPMorgan CEO Jamie Dimon highlighted concerns about potential underlying issues in the banking sector, suggesting that the current situation may not be an isolated case [9][10] Market Reactions - Trading on Wall Street has been volatile, with stocks frequently fluctuating between gains and losses, particularly after President Trump's tariff threats against China [10] - Treasury yields stabilized after significant declines, with the yield on the 10-year Treasury rising to 4.00% from 3.99% [12] Gold Market - The price of gold decreased by 1.3% to $4,247.40 but remains up over 60% for the year, driven by concerns over tariffs and expectations of interest rate cuts by the Federal Reserve [13]

Group 1 - Regional banks are facing challenges due to some smaller banks recording higher-than-expected loan loss provisions, impacting the sector negatively [1] - Despite the difficulties in the sector, some banks reported positive earnings results, indicating not all are affected equally [1] Group 2 - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]

Core Viewpoint - CarMax Inc experienced a significant decline in its second-quarter performance, with earnings and revenue falling short of analyst expectations due to weaker retail sales and increased loan loss provisions [1][2]. Financial Performance - The company reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09 [1]. - Quarterly sales totaled $6.594 billion, down 6% year over year, and also missed the expected $7.024 billion [1]. - Total gross profit was $717.7 million, a decrease of 5.6% compared to the same quarter last year [6]. Segment Performance - CarMax Auto Finance (CAF) reported income of $102.6 million, down 11.2%, primarily due to higher loan loss provisions [2]. - Retail used vehicle unit sales declined by 5.4% to 199,729, with comparable store used unit sales down 6.3% [3]. - Wholesale vehicle unit sales decreased by 2.2% to 138,302, while wholesale revenues edged down 0.4% [3]. Sales and Operations - Combined retail and wholesale used vehicle unit sales fell 4.1% to 338,031 [2]. - The company purchased a total of 293,000 vehicles in the second quarter, a 2.4% decrease from the previous year [4]. - The company opened three new store locations and a stand-alone reconditioning/auction center to support market operations [6][7]. Margins and Expenses - Unit margins remained solid, with gross profit of $2,216 per retail used unit and $993 per wholesale unit [6]. - Quarterly SG&A expenses decreased by 1.6% to $601.1 million compared to the prior-year quarter, with plans for further efficiency improvements [7].