TD Bank, CIBC beat profit expectations on lower loan loss provisions
- Canadian banks have largely avoided an increase in soured loans as several government assistance measures, expected to end this summer, helped profits surpass pre-pandemic levels.
- TD reported a 14% rise in net income at its Canadian retail banking arm to C$2.04 billion ($1.63 billion), while its US retail business recorded a drop of 13%.
Toronto-Dominion Bank and Canadian Imperial Bank of Commerce joined the country's major lenders in posting better-than-expected quarterly profit on Thursday, driven largely by lower provisions to cover loan losses from the COVID-19 pandemic.
Canadian banks have largely avoided an increase in soured loans as several government assistance measures, expected to end this summer, helped profits surpass pre-pandemic levels.
TD, Canada's second-biggest lender, reported better performance at its Canadian retail banking unit, which includes its wealth management operations, while CIBC, the No. 5 bank, was helped by a 30% jump in income at its capital markets arm.
Analysts had expected Canadian banks to post their fourth consecutive year-on-year quarterly profit drop, the longest decline streak since the financial crisis, but flattening loan loss provisions signal a turning point.
TD reported a 14% rise in net income at its Canadian retail banking arm to C$2.04 billion ($1.63 billion), while its US retail business recorded a drop of 13%. The bank also saw income rise at its wholesale banking segment.
CIBC reported higher profit at all its businesses.
TD reported adjusted net income of C$1.83 a share, in the three months to Jan. 31, versus analysts' expectations of C$1.49 a shares. CIBC saw adjusted income rise to C$3.58 a share, compared with estimates of C$2.81 a share.
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