Big 5 banks rake in $5.01 billion profit in Q2
Canada’s five biggest banks held steady on profit growth in the second quarter, raking in $5.01 billion collectively, as several failed to deliver higher results from certain divisions while some fell short of analyst expectations. The latest quarterly roundup fell slightly short of the $5.09 billion the group made during the first quarter of the year when growth was starting to regain momentum on fewer bad loans and some pickup in mortgages.
On June 1, Scotiabank wrapped up the second-quarter earnings season for Canadian banks with a record profit of nearly $1.1 billion. Net income for the three-month period was the equivalent of $1.02 per share – beating analyst estimates of about 93 cents per share. The bank said the profit was a quarterly record and up $225 million or 26 per cent from the same time last year. Revenue was just under $3.9 billion, up nearly $300 million from the second quarter of fiscal 2009. The bank’s provision for credit losses was reduced to $338 million, down $151 million from the same time last year. Scotiabank said its quarterly dividend will remain unchanged at 49 cents per common share.
“Our results reflect strong contributions from personal and commercial banking and wealth management, as well as the excellent performance of our wholesale business,” Scotiabank chief executive Rick Waugh said in a statement. “Our strong capital position and continued generation of capital gives us the ongoing flexibility to maintain our shareholder dividends and explore opportunities for business development and growth.”
More than half of the quarterly profit – a record $584 million – was generated by the Canadian banking operations, which saw growth in residential mortgages, lines of credit and business accounts. The Canadian banking contribution was up 42 per cent from $410 million in the second quarter of 2009. Scotia Capital’s net income rose to $391 million from $328 million, while the Canadian bank’s international operations saw a decline in profit to $288 million from $332 million.
Bank of Montreal launched the earnings period with the strongest results, including a quarterly profit of $745-million that was 18 cents per share ahead of analyst estimates. National Bank also beat predictions with a $261 million profit.
However, the rest of the big banks fell short of expectations even as most of them delivered impressive profit gains over a year earlier when the financial meltdown was scorching their results.
In the latest quarter, Royal Bank posted a $1.3-billion profit but missed analyst estimates by 12 cents per share.
CIBC posted a $660 million profit that turned around a $51-million loss from a year earlier, but came short of analyst predictions by four cents per share.
TD Bank more than doubled its second-quarter profit to nearly $1.2 billion, but was still two cents per share below analyst targets.
