Canadian B-D’s See Q3 Growth

Terry Flanagan

Canadian banks have posted better-than-expected earnings for the third quarter.

Scotiabank and the Canadian Imperial Bank of Commerce have announced their financial results from the fiscal third quarter, with each performing better than expected.

“This quarter’s results again demonstrate our ability to earn through challenging times by remaining focused on our core businesses and emphasizing strong risk management practices,” said Rick Waugh, Scotiabank president and chief executive officer. “While we are not immune to the volatility in world markets, consistent execution of our straightforward and diversified business strategy will continue to deliver sustainable profitability and growth.

“We are very pleased with the solid results we delivered this quarter in what continues to be a challenging economic environment worldwide,” says Gerry McCaughey, CIBC president and chief executive officer. “Our investment in American Century announced this quarter, and dividend increase announced today, reflect our confidence and underscore our commitment to growing CIBC, while maintaining prudent capital ratios.”

CIBC’s net income increased to $808 million for the third quarter ended July 31, compared to $640 in the prior year, a 26 percent increase. The bank’s brokerage unit saw income increase to $68 million from $53 million, which it credited to higher trading revenue.

Scotiabank saw net income increase to nearly $1.3 billion in the third quarter ended July 31, up from $1.1 billion last year, an 18 percent bump. Scotia Capital, Scotiabank’s investment banking and broker-dealer unit, saw income drop slightly from a year earlier, to $289 million from $305 million, in part because of decreased trading revenue.

“We had very choppy markets and very lethargic business conditions,” said Mike Durland, head of global capital markets at CIBC on a conference call. “We don’t think in the near term we’ll see a change in that environment, so that business line will produce more modest revenue numbers in the next few months,” Durland added.

Both banks announced they will be issuing dividends to shareholders. CIBC will give shareholders 90 cents per share, while Scotiabank’s shareholders will receive 52 cents per share.

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