Dec. 12, 2014, 12:13 PM
- Analyst Kevin Choquette and team are "net upgrading" the sector as they expect the Canadian banks can weather a potential economic slowdown and continue to generate plenty of capital.
- Diving a bit further, Choquette, expects Ontario and Quebec to benefit from lower energy prices and the weaker loonie at the expense of Western Canada (mainly Alberta). TD Bank (TD -1.2%), RBC (RY -2%), and Bank of Montreal (BMO -1%) all have the largest exposure south of the border, and with BMO's upgrade today, all are rated Outperform.
- CIBC (CM -2.8%), on the other hand, has the highest domestic exposure, the highest concentration in mortgages, and higher reinvestment and operating leverage pressures, and is thus downgraded to Underperform.
- Previously: Rosie a buyer of Canadian banks (Dec. 12, 2014)
Dec. 12, 2014, 10:04 AM
- "The baby has been thrown out of the bathwater with this latest market selloff and it may be time to start getting our feet wet and add in more exposure," says Gluskin Sheff's David Rosenberg.
- Some metrics according to Rosie: Canada's lenders are trading at a 30% discount to the S&P/TSX index based on trailing P/E, and are also at a discount to U.S. banks ... This at the same time they're offering a 100 basis point dividend yield premium to the TSX and a 150 basis point premium to 10-year Canadian government paper.
- The only other time in the last 15 years this combination occurred was in 2012, which was followed by a period of outperformance for the group, he says.
- In other news, Credit Suisse buys the dip in Bank of Montreal (BMO +0.3%), upgrading to Outperform.
- The rest of the group: Scotiabank (BNS -0.4%), RBC (RY -1.1%), CIBC (CM -1.4%), TD Bank (TD -0.4%), National Bank of Canada (OTCPK:NTIOF -1.2%).
Dec. 10, 2014, 2:48 PM
- One of the Canadian banks' more reliable and profitable sectors for lending business is the stumbling oil industry, and another is the bubbly property sector.
- A check of last week's earnings reports finds the big Canadian banks do up to 20% of their lending to the resource sector, and borrowing plans are no doubt falling alongside the price of oil.
- The trouble in those areas come just as the banking sector looks to have put its Caribbean write-downs behind it. Scotiabank (BNS -2.9%) - which opened its first Caribbean branch in 1889 - said it would book a $451M charge , and CIBC (CM -2.4%) earlier this year expensed $543M related to the region. RBC (RY -3%) expects its remaining Caribbean operations to be profitable in 2015 after the sale of its Jamaican unit.
- Bank of Montreal (BMO -2.5%), TD Bank (TD -1.4%)
Dec. 2, 2014, 10:38 AM
- Bank of Montreal (BMO -2.1%) boosted the dividend and set a 15M share buyback, but missed estimates thanks to weak action in capital markets, with profit of $191M down 12% year-over-year thanks to a 21% decline in trading revenue to $186M. Underwriting and advisory fees, however, climbed 6.4% to $166M.
- "We are inclined to view the quarter as a neutral, given that BMO did beat our estimates in Canada [retail banking] and U.S. [retail banking], but EPS was below consensus."
- Royal Bank of Canada (RY -2.6%), Bank of Nova Scotia (BNS -1.4%), CIBC (CM -0.5%), TD Bank (TD -0.7%).
- Previously: BMO misses estimates, boosts dividend, sets buyback
Dec. 2, 2014, 7:46 AM
- BMO FQ4 adjusted net income of $1.111B up 2% Y/Y/ adjusted EPS of $1.63 up 1%.
- Adjusted ROE of 13.7% down 130 basis points from a year ago.
- Quarterly dividend boosted by $0.02 to $0.80. Announces 15M share repurchase plan, roughly 2.3% of the float.
- Canadian Personal & Commercial Banking adjusted net income of $525M up 14% Y/Y, with loan growth of 4% and deposit growth of 10%.
- U.S. Personal & Commercial Banking adjusted net income of $163M up nearly 50% Y/Y, driven by lower credit loss provisions.
- Wealth Management adjusted net income of $253M up 28% Y/Y after excluding a security gain from last year. AUM of $242B up 44% Y/Y thanks to the F&C purchase. Excluding F&C, AUM grew 17% thanks, in part, to strong markets.
- Capital Markets net income of $191M down 12% Y/Y, with revenue up 2%.
- Previously: Bank of Montreal misses by C$0.04, misses on revenue
Dec. 2, 2014, 7:35 AM| Comment!
Dec. 1, 2014, 5:30 PM
Sep. 9, 2014, 10:01 AM
- Bank of Montreal (BMO -0.8%) made its biggest acquisition ever three years ago with the purchase of Milwaukee-based Marshall & Ilsley for $3.7B, a deal which doubled U.S. deposits and branches at what's now called BMO Harris Bank.
- "The accretion and cost savings have come in at or above their expectations," says KBW's Brian Klock. "They have the market share in Chicago that they want on the deposit side and it seems like they’re growing loans faster now.”
- "We’ve gone from rationalizing the business to now the business is growing again, and we expect the business to continue to grow,” said CEO William Downe following FQ3 results late last month.
- BMO earned 15% of its profit from U.S. operations this year, and its success comes alongside TD Bank which spent over $25B on U.S. purchases over the last decade and now gets over 25% of its profit here. Royal Bank of Canada, meanwhile, sold its money-losing North Carolina-based RBC Bank in 2012 after nearly eleven years.
Aug. 27, 2014, 10:55 AM
- Scotiabank's (BNS -0.1%) underlying results were weak, with international operations continuing to falter, says Credit Suisse, pulling its Outperform rating on the stock. TD Securities pulls the name from its Action List Buy, but still rates the bank a Buy.
- Previously: Bank of Nova Scotia misses by C$0.01, beats on revenue
- Liking what it saw from Bank of Montreal's (BMO +2.2%) sizable earnings beat, TD boosts the stock to a Buy from Neutral.
- Previously: Bank of Montreal beats by C$0.07
Aug. 26, 2014, 7:45 AM
- FQ3 adjusted net income of $1.162B or $1.73 per share up 4% from a year ago.
- Canadian P&C adjusted net income of $528M up 8%, on revenues higher by 6%. Loan growth of 7%; deposit growth of 9%; expenses higher by 4%.
- U.S. P&C adjusted net income of $158M up 1%, with the size of the core C&I portfolio up 18%.
- Wealth Management adjusted net income of $212M down 4%. Adjusted net income in traditional wealth of $164M up 27%, with about 60% of the increase coming from the F&C purchase. Adjusted net income in insurance of $48M down 48% thanks to a $22M charge from unfavorable movements (down) in interest rates (last year rates provided a $42M benefit).
- BMO Capital Markets net income of $306M up 14%.
- Dividend remains at C$0.78 per share.
- Conference call at 2 ET
- BMO flat premarket
Aug. 26, 2014, 7:15 AM
Aug. 26, 2014, 7:00 AM| Comment!
Aug. 25, 2014, 5:30 PM
Aug. 8, 2014, 5:25 PM
- Canada’s six biggest banks - Toronto-Dominion Bank (NYSE:TD), Royal Bank of Canada (NYSE:RY), Bank of Nova Scotia (NYSE:BNS), Canadian Imperial Bank of Commerce (NYSE:CM), Bank of Montreal (NYSE:BMO) and National Bank of Canada (OTCPK:NTIOF) - had their outlooks cut to negative from stable by Standard & Poor’s because of regulatory changes that could affect bondholders.
- S&P says the outlook revision reflects its "expectation of reduced potential for extraordinary government support arising from implementation of the proposed new elements of the resolution framework for Canadian banks."
Jul. 30, 2014, 9:07 AM| Comment!
Jul. 25, 2014, 12:48 PM
- Checking the Q2 results of the big U.S. banks and extrapolating to Canada, CIBC's Rob Sedran says Bank of Montreal (BMO +0.2%) and Royal Bank of Canada (RY +0.2%) are poised to see the largest benefit from trends in commercial lending and capital markets. TD Bank, however, is more exposed to consumer lending, which continues to slow.
- “The weakness in personal lending [at banks in the U.S.] was more than offset by strength in commercial and industrial loan growth, which came in at just over 8%," says Sedran, noting BMO is most exposed to better C&I business in the States.
- For RBC, the bright spot, says Sedran, was U.S. capital markets business performing better-than-expected (how could it not), including robust M&A activity.
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