Earlier we highlighted buyback activity among the Canadian names had been ramping up, reaching levels not seen since slack came back into the market post-COVID.

This time around the main driver has been the financials sector, in comparison to heightened activity from resources names (energy & mining) in the previous cycle.

Within the financials sector, the big banks have been driving the bus…

… but even the life insurance names have been mopping up shares recently.

For the banks, the decision is partly due to a deceleration in low growth…

… as tariffs have slowed down risk appetite from the private sector…

… and the other main driver has been their capital positions, which sit well above regulatory minimums…

… something both the banks and life insurers have in common.

Regardless though, a ramp up in buybacks comes at the expense of other uses of capital - meaning the group isn’t seeing market returns high enough to forgo repurchases.

For the banks trading relatively cheap versus their long-term average book value multiples, this might not be such a bad thing. For the lifecos… let’s see.