TD Bank and CIBC beat earnings expectations with lower loan loss provisions
ATD Bank dds, CIBC results
February 25 (Reuters) – Toronto-Dominion Bank TD.TO and Canadian Imperial Bank of Commerce CM.TO joined with the country’s major lenders to post better-than-expected quarterly profit on Thursday, mainly due to lower provisions to cover loan losses due to the COVID-19 pandemic.
Canadian banks have largely avoided an increase in bad loans, as several government assistance measures, which are expected to end this summer, have helped profits surpass pre-pandemic levels.
TD, Canada’s second-largest lender, posted a better performance from its retail banking unit in Canada, which includes its wealth management business, while CIBC, the fifth-largest bank, was helped by a 30% increase income from its capital markets arm.
Analysts expected Canadian banks to post their fourth straight decline in quarterly year-over-year profits, the longest streak of decline since the financial crisis, but the flattening of loan loss provisions marks a turning point.
TD reported a 14% increase in net income from its retail banking business in Canada to C $ 2.04 billion ($ 1.63 billion), while its US retail operations recorded a 13% decrease. The bank also saw its revenues increase in its wholesale banking segment.
CIBC reported higher profits in all of its businesses.
TD reported adjusted net income of C $ 1.83 per share, in the three months to Jan. 31, compared to analysts’ expectations of C $ 1.49 per share. CIBC saw its adjusted income rise to C $ 3.58 per share, from estimates of C $ 2.81 per share.
($ 1 = 1.2483 Canadian dollars)
(Reporting by Nichola Saminather and Noor Zainab Hussain, additional reporting by Sohini Podder; Editing by Aditya Soni and Krishna Chandra Eluri)
(([email protected]; + 1-416-687-7604;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.