Toronto-Dominion BankTD-T +0.24%increase chief executive officer Bharat Masrani said that the bank has identified the weaknesses in its anti-money laundering procedures, and that the lender is investing heavily in improving those processes.
Investors have been waiting for details on the expected fines or other penalties stemming from probes by regulators and law-enforcement agencies, including the U.S. Department of Justice, that derailed its takeover of Tennessee-based First Horizon Corp. While discussing first-quarter earnings results that topped analyst expectations, Mr. Masrani said that he cannot yet publicly share the nature of the gaps in its anti-money laundering procedures.
“I know there are questions relating to the bank’s investments in our risk and control infrastructure, including in our AML program. We are making comprehensive enhancements. This is a priority for the bank, and we take our responsibility to live up to our high standards,” Mr. Masrani said during a conference call with analysts.
He said that TD has hired hundreds of employees across the company to support its risk and control operations.
“We know what the AML issue is, and we’re making progress is fixing it every day.”
On Thursday, TD reported first-quarter profit that beat analysts’ estimates as the lender booked record revenue in its capital markets division, offsetting rising provisions for loans that could default.
The bank earned $2.8-billion, or $1.55 per share, in the three months that ended Jan. 31. That compared with $1.58-billion, or $0.82 per share, in the same quarter last year.
Adjusted to exclude certain items, including costs related to the restructuring charges announced last quarter and its acquisition of New York-based investment bank Cowen, TD said it earned $2.00 per share. That topped the $1.89 per share analysts expected, according to data from the London Stock Exchange Group.
The bank booked $213-million in after-tax restructuring charges, adding to the $266-million it posted for the program last quarter. Last year, any of the banks trimmed expenses through measures including job cuts and real estate reductions. TD expects to post savings of about $400-million pre-tax in 2024.
The lender is targeting a 3 per cent reduction in its workforce through initiatives including employee severance and other personnel-related costs and reducing its real estate footprint.
“TD posted earnings that were ahead of expectations on the back of impressive operating leverage (likely aided by the ongoing restructuring charges) and a boost from capital markets,” Jefferies analyst John Aiken said in a note to clients. (Operating leverage is the industry’s term for revenue outpacing expenses.)
On Thursday, CIBC and Toronto-Dominion Bank were the final major Canadian banks to report earnings for the fiscal first quarter. The rest of the Big Six banks reported earlier this week, with Bank of Nova Scotia, Royal Bank of Canada and National Bank of Canada beating analyst expectations, while Bank of Montreal missed estimates.
In the quarter, TD set aside $1-billion in provisions for credit losses – the funds banks set aside to cover loans that may default. That was higher than analysts anticipated, and included $67-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, TD had set aside $690-million in provisions.
Total revenue rose 12 per cent in the quarter to $13.7-billion as expenses decreased 1 per cent to $8-billion.
Canadian personal and commercial banking profit was $1.79-billion, up 3 per cent from a year earlier, as revenue growth offset by higher expenses and provisions.
Profit from the bank’s U.S. arm fell 43 per cent to $670-million as a decrease in the earnings contributed from TD’s investment in Charles Schwab weighed on results.
The wealth management and insurance division’s profit was flat at $555-million of profit as higher insurance service expenses offset a rise in revenue.
Capital markets profit fell 38 per cent to $205-million on higher expenses related to the integration of TD’s Cowen acquisition. But revenue jumped 32 per cent to $1.78-billion on higher activity through Cowen, as well as a boost in equity commissions, lending revenue from syndicated and leveraged finance, trading and underwriting fees.
Canadian Utilities Limited (Canadian Utilities or the Company) today announced adjusted earnings in 2023 of $596 million ($2.21 per share), which were $59 million ($0.22 per share) lower compared to $655 million ($2.43 per share) in 2022. Fourth quarter adjusted earnings in 2023 of $192 million ($0.71 per share), were $12 million ($0.05 per share) higher compared to $180 million ($0.66 per share) in the fourth quarter of 2022.
Crescent Point Energy Corp. (CPG) on Thursday reported net income of $698.7 million in its fourth quarter.
The Calgary, Alberta-based company said it had net income of $1.25 per share. Earnings, adjusted to account for discontinued operations and non-recurring gains, were 27 cents per share.
The oil producer posted revenue of $695.4 million in the period. Its adjusted revenue was $743.7 million.
For the year, the company reported profit of $422.4 million, or 77 cents per share. Revenue was reported as $3.05 billion.
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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
Laurentian Bank of Canada reported a first-quarter profit of $37.3 million, down from $51.9 million a year earlier.
The Montreal-based bank says the profit amounted to 75 cents per diluted share for the quarter ended Jan. 31, down from a profit of $1.09 per diluted share in its first quarter last year.
Revenue totalled $258.3 million, down from $260.1 million a year earlier.
The results came as Laurentian’s provision for credit losses totalled $16.9 million, up from $15.4 million in its first quarter last year.
On an adjusted basis, the bank says it earned 91 cents per diluted share in its latest quarter, down from an adjusted profit of $1.15 per diluted share a year earlier.
Analysts on average had expected a profit of 95 cents per share, according to estimates compiled by financial markets data firm Refinitiv.
This report by The Canadian Press was first published Feb. 29, 2024.
Oil and gas firm Canadian Natural Resources CNQ-T +0.48%increase beat fourth-quarter profit estimates on Thursday, helped by record production.
The company’s overall production was up 9.6 per cent to 1.42 million barrels of oil equivalent per day (boe/d) from last year.
Total U.S. oil demand rose 3.4 per cent in October versus the prior year, according to U.S. Energy Information Administration (EIA)data, benefiting Canadian firms as the U.S. is the largest importer of the country’s oil and gas.
The Calgary-based company’s quarterly production of crude oil and natural gas liquids (NGLs) was at 1.05 million of barrels per day (bbl/d), an 11 per cent growth compared with a year earlier.
The oil and gas producer also increased its quarterly dividend by 5 per cent to $1.05 per share.
The company reported an adjusted profit of $2.34 per share for the quarter ended Dec. 31, compared with analysts’ average estimate of $2.15 per share, according to LSEG data.
The Canadian firm’s reported profit jumped nearly 73 per cent to $2.63-billion in the quarter, compared with the previous year.
TD-T -0.10%decrease reported a first-quarter profit of $2.82-billion, up from $1.58-billion a year earlier, as its revenue also climbed higher.
The bank says the profit amounted to $1.55 per diluted share for the quarter ended Jan. 31, up from a profit of 82 cents per diluted share in the same quarter last year.
Revenue totalled $13.71-billion, up from $12.20-billion.
TD’s provisions for credit losses for the quarter amounted to $1.00-billion, up from $690-million a year earlier.
On an adjusted basis, TD says it earned $2.00 per diluted share, down from an adjusted profit of $2.23 per diluted share in its first quarter last year.
Analysts on average had expected a profit of $1.89 per share, according to estimates compiled by financial markets data firm Refinitiv.
Canadian Imperial Bank of CommerceCM-T -0.10%decrease reported first quarter profit that beat analysts’ estimates on stronger performance in Canadian banking, even as the lender posted higher provisions for loans that could default.
CIBC earned $1.73-billion, or $1.77 per share, in the three months that ended Jan. 31. That compared with $433-million, or $0.39 per share, in the same quarter last year when the bank’s earnings were weighed down by a large legal provision.
Adjusted to exclude certain items, including a charge stemming from a special assessment by the U.S. Federal Deposit Insurance Corp., the bank said it earned $1.81 per share, a 7-per-cent decrease from the same quarter a year prior. That topped the $1.68 per share analysts expected, according to data from the London Stock Exchange Group.
“These first-quarter results demonstrate our success in executing on our client-focused strategy which is delivering results for our stakeholders,” CIBC chief executive officer Victor Dodig said in a statement. “We have clear momentum in attracting and deepening client relationships, underpinned by continued expense discipline, a robust capital position, and strong credit quality, giving us a strong foundation as we continue to proactively manage our bank to further our progress and momentum in 2024.”
The bank kept its quarterly dividend unchanged at $0.90 per share.
CIBC is the fifth major Canadian bank to report earnings for the fiscal first quarter. Toronto-Dominion Bank is also releasing results on Thursday. The rest of the Big Six banks reported earlier this week, with Bank of Nova Scotia, Royal Bank of Canada and National Bank of Canada beating analyst expectations, while Bank of Montreal missed estimates.
In the quarter, CIBC set aside $585-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was higher than analysts anticipated, and included $93-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, CIBC set aside $295-million in provisions.
Total revenue rose 5 per cent in the quarter, to $6.22-billion as expenses decreased 22 per cent to $3.47-billion. On an adjusted basis, excluding last year’s large legal provision, expenses increased 3 per cent on higher technology and staffing costs.
Profit from Canadian personal and small business banking was $650-million, up 10 per cent from a year earlier, as wider net interest margins offset higher provisions. Loan balances were up 2 per cent.
The Canadian commercial and wealth management division generated $498-million of profit, up 6 per cent on lower provisions and higher revenue.
The bank’s U.S. division posted a loss of $9-million, as lower deposit balances, static loan growth and higher expenses, weighed on earnings. The U.S. business booked higher provisions, largely stemming from impaired loans in the commercial real estate portfolio. It also took the charge related to the special assessment imposed by the FDIC.
And capital markets profit was flat year-over-year at 612-million as expenses outpaced revenue with lower activity in corporate banking offsetting a boost from global markets, investment banking and direct financial services.
Canada’s biggest banks report their first-quarter earnings this week, covering the three months that ended Jan. 31, as experts cite concerns with commercial real estate loans and warn of significant losses in the sector.
Ahead of the latest results, many analysts have cut their estimates – extending a trend seen throughout 2023. The analysts anticipate that earnings will drop as much as 12 per cent year-over-year, pressed by dampened loan demand and higher loan loss reserves driven by rising risk in commercial real estate, credit cards and auto lending. The good news is that the banks have also been setting aside more money for loans that could default, known as provisions for credit losses, to help them absorb the impact of those losses.
So far, Bank of Nova Scotia, Royal Bank of Canada and National Bank have reported first-quarter profits that beat analysts’ estimates. Meanwhile, Bank of Montreal missed analysts’ estimates. Toronto-Dominion Bank TD-T -0.10%decrease and Canadian Imperial Bank of Commerce CM-T -0.10%decrease round out this week’s bank earnings with the release of their first-quarter results on Friday.
Here’s a breakdown of the big banks’ first-quarter earnings so far.
Bank of Nova Scotia
A Bank of Nova Scotia branch, in Toronto, on Dec. 13, 2021.CARLOS OSORIO/REUTERS
Earnings Q1 2024: $2.2 billion ($1.68 per share)
Earnings Q1 2023: $1.76-billion ($1.35 per share)
Adjusted EPS: $1.69 per share
Analysts’ expectations: $1.61 per share (adjusted)
Scotiabank earned $2.2-billion, or $1.68 per share, in the three months that ended Jan. 31. That compared with $1.76-billion, or $1.35 per share, in the same quarter last year.
Adjusted to exclude certain items, the bank said it earned $1.69 per share. That edged out the $1.61 per share analysts expected, according to Refinitiv.
In the quarter, Scotiabank set aside $962-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was higher than analysts anticipated, and included just $20-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, Scotiabank set aside $638-millions in provisions.
“The Bank delivered solid earnings this quarter driven by strong revenue growth, margin expansion and expense discipline,” Scotiabank chief executive officer Scott Thomson said in a statement. “I am encouraged by the early progress against our strategic priorities, and the further strengthening of our balance sheet metrics.”
The bank kept its quarterly dividend unchanged at $1.51 cents per share.
Total revenue rose 6 per cent in the quarter to $8.4-billion as expenses also climbed 6 per cent to $4.7-billion.
Bank of Montreal (BMO)
The Bank of Montreal building, in Toronto’s Financial District, is on April 10 2019.FRED LUM/THE GLOBE AND MAIL
Earnings Q1 2024: $1.29 billion ($1.73 per share)
Earnings Q1 2023: $133-million ($0.14 per share)
Adjusted EPS: $2.56 per share
Analysts’ expectations: $3.02 per share (adjusted)
Dividend: $1.51 per share
Bank of Montreal BMO-T -0.61%decrease first quarter profit missed analysts’ estimates on a slump in capital markets profit and an uptick in reserves for loans that could default.
Adjusted to exclude certain items, the bank said it earned $2.56 per share. That fell below the $3.02 per share analysts expected, according to Refinitiv.
In the quarter, BMO set aside $627-million in provisions for credit losses. That was higher than analysts anticipated, and included $154-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, BMO set aside $217-million in provisions.
“Against an uncertain economic outlook, we continued to demonstrate the strength and resilience of our diversified businesses and the benefit of strategic acquisitions,” BMO chief executive officer Darryl White said in a statement. “Although the environment has constrained revenue growth in market sensitive businesses in the near term, with the strength of our personal and commercial businesses and our sharp focus on positioning the bank effectively for long-term success by reducing expenses, optimizing our balance sheet and growing customer relationships, we are poised to create significant value for our shareholders.”
The bank kept its quarterly dividend unchanged at $1.51 cents per share.
Total revenue rose 50 per cent in the quarter to $7.7-billion as BMO integrates its acquisition of California-based Bank of the West. But expenses also rose 23 per cent to $5.9-billion, which the bank said was driven by acquisition costs, partially offset by the bank reaching its target of $800-million in deal-related cost synergies – savings the bank expected to achieve by streamlining its operations and technology platforms with Bank of the West.
Royal Bank of Canada (RBC)
An RBC branch in Halifax, on April 2, 2019.ANDREW VAUGHAN/THE CANADIAN PRESS
Earnings Q1 2024: $3.6-billion ($2.50 per share)
Earnings Q1 2023: $3.2-billion ($2.29 per share)
Adjusted EPS: $2.85 per share
Analysts’ expectations: $2.80 per share (adjusted)
RBC earned $3.6-billion, or $2.50 per share, in the three months that ended Jan. 31. That compared with $3.2-billion, or $2.29 per share, in the same quarter last year.
Adjusted to exclude certain items, including transaction and integration costs related to its proposed takeover of HSBC Bank Canada, the bank said it earned $2.85 per share, down 6 per cent from the same quarter last year. That edged out the $2.80 per share analysts expected, according to Refinitiv.
“Underpinned by our balance sheet strength, prudent approach to risk management and diversified business model, we delivered solid, client-driven volume growth and a continued focus on expense control,” RBC chief executive officer Dave McKay said in a statement. “As we look towards the completion of our planned HSBC Canada acquisition, we remain focused on being a trusted adviser to clients through the delivery of new and differentiated banking experiences.”
The bank kept its quarterly dividend unchanged at $1.38 per share.
RBC’s pending takeover of British-based banking giant HSBC’s Canadian unit received approval from the Finance Minister in December, and is expected to close at the end of the first calendar quarter.
In the quarter, RBC set aside $813-million in provisions for credit losses. That was higher than analysts anticipated, and included $133-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, RBC had set aside $532-million in provisions.
Total revenue rose 1 per cent in the quarter to $13.5-billion on slimmer net interest margins – the difference between what banks earn on loans and pay on deposits. Expenses increased 10 per cent to $8.3-billion, in part driven by costs related to its HSBC Canada deal and higher salaries and benefits, partly offset by a staff reduction announced last year.
National Bank of Canada
A National Bank of Canada branch in Ottawa.CHRIS WATTIE/REUTERS
Earnings Q1 2024: 922-million ($2.59 per share)
Earnings Q1 2023: $876-million ($2.47 per share)
Adjusted EPS: $2.59 per share
Analysts’ expectations: $2.36 per share (adjusted)
National Bank earned $922-million, or $2.59 per share, in the three months that ended Jan. 31. That compared with $876-million, or $2.47 per share, in the same quarter last year.
On an adjusted basis, the bank said it earned $2.59 per share. That edged out the $2.36 per share analysts expected, according to Refinitiv.
“National Bank delivered strong performance and excellent return on equity for the first quarter of 2024, underpinned by sustained momentum and execution across our business segments,” National Bank chief executive officer Laurent Ferreira said in a statement. “These results reflect the earnings power of our diversified business mix and relevance of our defensive posture.”
The bank kept its quarterly dividend unchanged at $1 .06 per share.
In the quarter, National Bank set aside $120-million in provisions for credit losses. That was higher than analysts anticipated, and included $30-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, National Bank reserved $86-million.
Total revenue rose 6 per cent in the quarter to $2.71-billion, while expenses increased 4 per cent to $1.45-billion.
Baytex Energy Corp. (BTE) on Wednesday reported a fourth-quarter loss of $459.7 million, after reporting a profit in the same period a year earlier.
The Calgary, Alberta-based company said it had a loss of 55 cents per share. Earnings, adjusted for asset impairment costs, were 18 cents per share.
The oil and natural gas company posted revenue of $782.7 million in the period.
For the year, the company reported a loss of $172.9 million, or 24 cents per share, swinging to a loss in the period. Revenue was reported as $2.51 billion.
In the final minutes of trading on Wednesday, the company’s shares hit $3.45. A year ago, they were trading at $3.87.
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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
