Canada's three biggest banks, witnessed improved earnings in the second quarter but fell short of the forecast on Thursday. The results were disappointing according to the analysts, but it was a case of elevated levels of expectations, which are very difficult to fulfill. Royal Bank, TD Bank and CIBC took hits from a lot of factors.

Bank of Montreal was blamed, as it soared above what analysts had expected. It was the first big Canadian bank to report second-quarter earnings on Wednesday.

Brad Smith, senior financial services analyst at Stonecap Securities said, “BMO set it up nicely, because they came with better-than-expected results... there was no concentration with where the outperformance was, it was just kind of everywhere”.

Royal Bank posted a $1.3-billion profit, vastly improved from a $50-million loss a year ago, but still it was considered one of the biggest disappointments. According to Thomson Reuters, the per share cash earnings was 96 cents, which is far less than $1.08, according to analyst expectations.

The stronger Canadian dollar was blamed by Royal, as it hurt both its profit and revenue in the quarter. Finance Minister Jim Flaherty will make a law by which federally regulated Canadian banks and trust companies will fail to use their websites to promote non-authorized insurance products, as it would be considered illegal.