Canada’s major lenders have posted a surprisingly strong third quarter
Toronto-Dominion (TD) Bank and Canadian Imperial Bank of Commerce (CIBC) reported higher third-quarter profits on Wednesday, ending a strong earnings season for Canada’s Big Six lenders.
TD announced adjusted earnings per share of $2.20, higher than the $2.05 expected by analysts, as the banking giant posted strong growth in its Canadian domestic banking business.
While TD posted a loss the same time last year because of a hefty fine for anti-money laundering (AML) lapses in the US, this time around it recorded an overall profit of $3.37 billion. On the Canadian retail banking side, profits were up 4% year over year, coming in at $1.95 billion.
The company continued a trend among Canada’s top banks of setting aside lower loan-loss provisions than anticipated, stashing $971 million for potentially souring loans.
But TD also took a $262 million hit because of efforts to adjust its US balance sheet after the imposition of a cap on retail operations south of the border following that AML furore.
Chief executive officer Raymond Chun, who recently succeeded Bharat Masrani at the helm of the bank, said it was “well positioned” to build on its current momentum and grow further.
Meanwhile, CIBC’s third-quarter earnings per share jumped to $2.16, a better-than-expected result fuelled by an $812 million haul in its Canadian personal and banking business division – up 17% year over year.
On the commercial banking and wealth management side, CIBC reported profits of $598 million, a jump of 19%, while it set aside $559 million in credit loss provisions – a lower amount than generally forecast.
Wednesday’s earnings reports mean all of Canada’s top six banks have now announced their third-quarter financials, with each posting generally strong results and reflecting a potentially brightening outlook despite ongoing trade tensions.
On Tuesday, top executives Bank of Montreal (BMO) and Scotiabank sounded a cautiously optimistic note on future prospects, with BMO chief executive Darryl White describing a significant drop in his “uncertainty meter” compared to earlier in the year, when US president Donald Trump first laid out his wave of tariffs against Canada.
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