Wed, Mar. 11, 7:07 AM
- UBS has poached a U.S. team of some 15 oil and gas investment bankers from Bank of Montreal (NYSE:BMO), significantly weakening the energy deal making capacity at Canada’s fourth-largest bank, Reuters reports.
- Those leaving BMO are part of a specialist group dubbed Acquisitions & Divestitures. The group carries out the complex engineering and technical research needed to value oil and gas deposits far beneath the earth's surface.
Thu, Mar. 5, 8:28 PM
- The minimum Tier 1 common capital ratio for banks is 5%, according to the Fed, and here's how the 31 lenders stacked up under the central bank's severely adverse scenario vs. a year ago (h/t: WSJ):
- Deutshce Bank (NYSE:DB): 34.7%, not tested a year ago
- DIscover (NYSE:DFS): 13.9% vs. 13.2% a year ago
- Bank of New York Mellon (NYSE:BK): 12.6% vs. 13.1%
- American Express (NYSE:AXP): 12.5% vs. 12.1%
- Northern Trust (NASDAQ:NTRS): 12.3% vs. 11.7%
- State Street (NYSE:STT): 11.8% vs. 13.3%
- Citizens Financial (NYSE:CFG): 10.7% vs. 10.7%
- KeyCorp (NYSE:KEY): 9.9% vs. 9.2%
- Capital One (NYSE:COF): 9.5% vs. 7.8%
- PNC Financial (NYSE:PNC): 9.5% vs. 9%
- Santander Holdings USA (SAN's U.S. unit): 9.4% vs. 7.3%; shares +0.8% after hours
- BMO Financial (BMO's U.S. unit): 9% vs. 7.6%
- Comerica (NYSE:CMA): 9% vs. 8.6%
- Huntington Bancshares (NASDAQ:HBAN): 9% vs. 7.4%
- HSBC North America (NYSE:HSBC): 8.9% vs. 6.6%
- U.S. Bancorp (NYSE:USB): 8.5% vs. 8.2%
- Regions Financial (NYSE:RF): 8.3% vs. 8.9%
- Citigroup (NYSE:C): 8.2% vs. 7.2%
- SunTrust (NYSE:STI): 8.2% vs. 8.8%
- BB&T (NYSE:BBT): 8.1% vs. 8.4%
- MUFG Americas Holdings (NYSE:MTU): 8% vs. 8.1%
- Ally Financial (NYSE:ALLY): 7.9% vs. 6.3%
- Fifth Third Bancorp (NASDAQ:FITB): 7.9% vs. 8.4%
- Wells Fargo (NYSE:WFC): 7.5% vs. 8.2%
- M&T Bank (NYSE:MTB): 7.3% vs. 6.2%
- Bank of America (NYSE:BAC): 7.1% vs. 5.9%; shares +2.1% after hours
- JPMorgan (NYSE:JPM): 6.5% vs. 6.3%
- BBVA Compass (NYSE:BBVA): 6.3% vs. 8.5%
- Goldman Sachs (NYSE:GS): 6.3% vs. 6.9%
- Morgan Stanley (NYSE:MS): 6.2% vs. 6.1%
- Zions Bancorp (NASDAQ:ZION): 5.1% vs. 3.6%; shares -1.7% after hours
- The lenders were also informed today whether their capital return plans would put them below the Fed's 5% threshold, giving them a 6-day window with which to change those requests, if need be. Last year, both BofA and Goldman scaled back their dividend/buyback requests, allowing them to pass the CCAR. This year's CCAR results will be announced on Wednesday.
- 2015 Stress Test Methodology and Results
Tue, Feb. 24, 7:51 AM
Tue, Feb. 24, 7:44 AM
- "BMO's first quarter results reflect the impact of an unsettled environment in which we saw significant movements in oil prices, long-term interest rates and the Canadian dollar," says CEO Bill Downe of his bank's nine cent earnings miss.
- The dividend is left unchanged at C$0.80.
- Canadian P&C banking adjusted net income of $503M up 4% Y/Y, partly thanks to higher revenue and lower loan loss provisions, partly offset by higher expenses.
- U.S. P&C banking adjusted net income of $205M up 14% Y/Y.
- Wealth Management adjusted net income of $186M up marginally from a year ago. AUM of $852B up 43% Y/Y, with the purchased F&C business contributing more than half of that increase.
- Capital Markets net income of $221M off 20% Y/Y, with revenue off 5%.
- CET1 ratio of 10.1%, unchanged from the previous quarter. Book value per share of $52.98 up 10% Q/Q.
- Conference call at 2 ET
- Previously: Bank of Montreal misses by C$0.09, beats on revenue (Feb. 24)
- BMO flat premarket, but off 13% YTD.
Tue, Feb. 24, 7:32 AM
Mon, Feb. 23, 5:30 PM
- AIXG, ALKS, AMT, BMO, CBRL, CEQP, CLDT, CLDX, CMCSA, CMLP, COT, CRNT, CRZO, CYRN, DAKT, DCI, DPZ, DRH, DYAX, ECL, EXAS, EXLS, EXPD, FDML, GLDD, GTLS, HD, IART, IPXL, M, MNKD, NEO, ODP, PCRX, PF, PLL, RLGY, SAFM, SAH, SHLX, SHOO, SPAR, SPWR, SUI, THRM, TOL, TREX, TRXC, UTHR, VAL, VSI, WEN, WIN, WLK, WPC, ZINC
Thu, Feb. 19, 12:27 PM
- "Given the historical relationship between oil prices and the impairment rate for energy-related loans, we expect some mild erosion in these loans' asset quality in the coming quarters," says Moody's David Beattie. Further, revenue from both underwriting and capital markets action could fall thanks to spending cuts by the banks' oil and gas clients.
- More? Consumer credit costs could worsen thanks to slowdowns in the economies of Canada's oil-producing regions.
- Direct loan exposures to the energy sector vary by bank, says Moody's, but Scotiabank (BNS -1.3%) and RBC (RY -1%) are particularly vulnerable.
- On the positive side, the size and diversity of Canada's Big Six function as "shock absorbers" against rising energy-related credit costs, and the fall in the loonie acts as a "natural hedge" by cutting costs and limiting the impact on oil producers whose product is priced strictly in appreciating greenbacks.
- The rest of the Big Six: Bank of Montreal (BMO -1%) CIBC (CM -1.3%), TD Bank (TD -1.3%), National Bank of Canada (OTCPK:NTIOF -0.8%).
Tue, Feb. 3, 1:08 PM
- Outperforming today as equities go green, rates rise, and oil pops to $51.63 per barrel, is Canada, with stocks in Toronto up 1.25%. Outperforming the broad Canadian market are the beaten-up banks, where investors have been bailing of late thanks to worries about the slowing economy there, not to mention a big drop-off in deal flow from the energy sector.
- Royal Bank (RBC +3.6%), TD Bank (TD +3.7%), Bank of Montreal (BMO +4%), Scotiabank (BNS +4.4%), CIBC (CM +4%).
- Previously: Canadian lenders give more ground as Barclays downgrades (Jan. 30)
Fri, Jan. 30, 9:42 AM
- Citing the effect on business from falling oil prices and noting the Bank of Canada's worry over growth, Barclays downgrades TD Bank (TD -2.8%), RBC (RY -3.2%), BMO (BMO -3.3%), and Laurentian Bank (OTCPK:LRCDF) - all to Underweight from Equal Weight.
- Not downgraded, but also continuing to feel the chill in Canada's economy are Scotiabank (BNS -3.7%) and CIBC (CM -3.1%).
- Previously: Canadian GDP unexpectedly slips in November (Jan. 30)
Tue, Jan. 27, 5:09 PM
- First it was Royal Bank of Canada (NYSE:RY) and then Bank of Montreal (NYSE:BMO) quickly followed suit - each cutting their prime lending rate to 2.85% from 3%. But hey, that's just 15 basis points vs. the Bank of Canada's 25 basis point cut (to 0.75%) last week.
- In any case, it should provide at least some relief for a perky property market which could find itself under pressure thanks to the plunge in oil prices.
- Previously: Surprise rate cut not yet feeding through in Canada (Jan. 23)
Fri, Jan. 23, 3:29 PM
- TD Bank (TD +1.4%) has no plans to cut its prime rate in line with the central bank's 25 basis point rate cut this week, and Royal Bank of Canada (RY +1.2%) is also holding off, at least for now.
- "Like the others," says RBC CEO David McKay, "[we] were completely caught off guard ... I need to catch up with my team and digest what’s going on in the market and figure out what we’re going to do from here.”
- Bank of Montreal (BMO +0.6%) and CIBC (CM -0.1%) are keeping mum about their plans at the moment, and Scotiabank (BNS +0.3%) says there will be an announcement if there's any change to report.
- The purpose of the BOC rate cut, says Canaccord's Gabriel Dechaine, was to ease the affordability of Canadians' very high debt loads. He believes there will be "regulatory pressure" for the country's big banks to follow suit.
- ETFs: EWC, CNDA, EWCS, FCAN, QCAN
- Previously: Unexpected rate cut for Canada (Jan. 21)
Dec. 30, 2014, 5:36 PM
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
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