Seeking Alpha

Canada's banks set to report earnings

  • Reporting Q4 earnings this week, Canadian banks are set to post single-digit Y/Y earnings gains, with the exception of Bank of Montreal (BMO -0.9%) which has a tough comparison to a big quarter one year ago - it's expected to show a 4% Y/Y drop in profit.
  • CIBC (CM -0.5%) - with 80% of its total loans to Canadian consumers - is most exposed to any slowdown in domestic lending. BMO and TD Bank - on the other hand - have extensive U.S. retail operations, while Scotiabank (BNS -0.6%) does substantial business in Latin America and Asia. The slowdown in trading activity took a big toll on U.S. bank results in Q3, and Royal Bank of Canada (RY -0.8%) operates the largest capital markets operation of any of the country's Big 5.
  • Canadian lenders often announce dividend hikes as part of their earnings releases, and analysts expect them from BMO and CIBC (Scotia, RBC, and TD boosted payouts last quarter).
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