Canada's Big Six Banks' Big Earnings Week

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 |  Includes: BMO, BNS, CM, LRCDF, RY, TD
by: FP Trading Desk

The coming week promises to be a busy one for the financial sector, with four of Canada's Big Six banks releasing second quarter results on Thursday alone and all six by Friday.

The festivities begin on Tuesday with the Bank of Montreal (NYSE:BMO). The Bank of Nova Scotia (NYSE:BNS), CIBC (NYSE:CM), National Bank of Canada [TSX:NA], and TD Bank (NYSE:TD) all follow with their results on Thursday, and Royal Bank (NYSE:RY) closes out Bank Week on Friday.

Laurentian Bank (OTCPK:LRCDF) will also put out its second-quarter findings on Wednesday.

Blackmont financial services analyst Brad Smith has put together a nice compilation of consensus estimates versus his own for diluted cash earnings per share as well as revenue (tax equivalent basis). Banks will collect various financial estimates from industry analysts just prior to each quarterly release period, then release the consensus numbers to all involved parties.

As far as the numbers go, the greatest variance in EPS figures are with the Bank of Nova Scotia and Royal Bank. Mr. Smith predicts C$.85 per share earnings for BNS, compared to C$.80 for everyone else. Meanwhile, Mr. Smith expects Royal Bank to earn $.08 less per share (C$.85 cents) than industry predictions (C$.93 cents).

For revenues, the greatest differences lie with the Bank of Montreal and, again, the Bank of Nova Scotia.

Mr. Smith predicts C$3.13-billion in consolidated revenue for BMO, C$277-million more than consensus of C$2.86-billion. And despite a higher EPS than the average, he predicts a lower revenue for BNS at C$3.37-billion, C$90-million less than the C$3.46-billion posted by consensus.

"Our expectation on operating efficiency [for Royal Bank] appears to be less optimistic than consensus," he said, explaining the variance in EPS.

Meanwhile, Blackmont has pegged Bank of Nova Scotia's loan loss provisions at C$336-million for the quarter, C$16-million (2 cents) less than consensus.

Overall, Blackmont is optimistic on revenue (four of six are above consensus) but hesitant on EPS (three in the red).

Here's a quick summary:

EPS:

BMO: Blackmont C$.92; Consensus C$.90; +2 cents

BNS: Blackmont C$.85; Consensus C$.80; +5 cents

CM: Blackmont C$1.38; Consensus C$1.39; -1 cent

NA: Blackmont C$1.20; Consensus C$1.23; -3 cents

RY: Blackmont C$.85; Consensus C$.93; -8 cents

TD: Blackmont C$1.15; Consensus C$1.15; unchanged

Revenue:

BMO: Blackmont C$3.13-billion; Consensus C$2.86-billion; +$277-million

BNS: Blackmont C$3.37-billion; Consensus C$3.46-billion; -$90-million

CM: Blackmont C$2.87-billion; Consensus C$2.71-billion; +$163-million

NA: Blackmont C$989-million; Consensus C$1.01-billion; -$20-million

RY: Blackmont C$6.5-billion; Consensus C$6.35-billion; +$155-million

TD: Blackmont C$4.69-billion; Consensus C$4.5-billion; +$194-million

For more, check out some recent notes from Desjardins and UBS.