Trending News

Blog Post

Market

Canada’s CIBC, TD earnings beat estimates but loan growth performance diverges By Reuters 



© Reuters. FILE PHOTO: TD Bank, CIBC and Bank of Montreal are seen in the financial district in Toronto, Ontario, Canada June 24, 2020. REUTERS/Carlos Osorio/File Photo

By Nichola Saminather

TORONTO (Reuters) – Toronto-Dominion Bank (TD) and Canadian Imperial Bank of Commerce (CIBC) both beat estimates for third-quarter profits on Thursday, driven mostly by releases of reserves to cover bad loans, but CIBC’s strong loan growth from a year earlier eluded TD.

CIBC’s lending climbed 8% as of July , while TD’s fell 0.5% from a year earlier, as declines in the latter’s U.S. lending offset strong loan growth in Canada. This contributed to flat revenues at TD, while CIBC’s rose 7%.

CIBC, the fifth-biggest bank, reported adjusted pre-tax, pre-provision (PTPP) earnings that jumped 7% from a year earlier, while TD’s grew a more subdued 2.7%.

“In the U.S. relief programs for consumers and businesses have been quite significant,” Riaz Ahmed, Chief Financial Officer at TD, Canada’s second-largest lender by market value, said in an interview. “That build up in liquidity among customers and business owners has been quite significant and resulted in loan growth being anemic.”

U.S. loan growth is expected to pick up as liquidity shrinks, he said.

CIBC’s loan volume growth offset the impact of exchange rates and lower rates, the bank said.

Both banks benefitted from strong growth in wealth management revenues from a year earlier, which drove a 13% increase in non-interest income in TD’s Canadian retail unit, and a 25% jump in CIBC’s.

That helped ease the impact of a 1% decline in revenues for CIBC’s capital markets division. TD’s steeper 22% drop was driven by a weaker trading environment that higher advisory fees failed to offset.

TD posted adjusted earnings of C$1.96 per share, compared with C$1.25 a year earlier and analysts’ estimates of C$1.92 a share, as it recovered loan-loss reserves of C$37 million, versus expectations it would take C$155.6 million.

CIBC reported adjusted income of C$3.93 versus C$2.71, beating expectations of C$3.41. It released loan-loss reserves of C$99 million, compared with analysts’ expectations it would take provisions of C$151.6 million.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Related posts

Leave a Reply

Required fields are marked *