Big Six banks pull off clean sweep of earnings season, as CIBC and TD beat expectations
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With the TD Ameritrade gain removed from the equation, TD’s adjusted net income was up one per cent for the three-month period ended Oct. 31, to just shy of $3 billion. Even so, the bank’s adjusted earnings per share were $1.60, up one cent from a year earlier and above the $1.28 consensus estimate among banking analysts.
Those results were given a lift by TD’s wholesale division, which houses capital markets and investment banking activities for the lender. Strong growth in trading-related revenue contributed to TD’s wholesale arm booking record net income of $486 million for the fourth quarter, an increase of 10 per cent over the previous quarter and more than 200 per cent from a year earlier.
CIBC, meanwhile, reported net income of just over $1 billion for the three-month period ended Oct. 31, which was 13 per cent lower than the previous quarter and 15 per cent lower than its fourth quarter of 2019.
When adjusted for several items, CIBC’s profit for the fourth quarter was $1.28 billion, up three per cent from the third quarter and down two per cent from a year earlier. The Toronto-based bank’s adjusted earnings per share were $2.79, higher than the $2.53 consensus of banking analysts’ estimates.
Increased earnings from Canadian retail, commercial and wealth management operations provided a boost, as did a year-over-year gain in net income by CIBC’s capital-markets division.
Also driving the results for CIBC was a drop-off in its provision for credit losses for its fourth quarter, aided by government support programs and debt-payment deferrals provided to clients that helped reduce personal lending and credit card-related insolvencies and write-offs. The amount of money that the bank set aside in case loans turn sour fell 45 per cent compared to the third quarter and by 28 per cent year-over-year, to $291 million.
