Despite hiking their dividend payout, Canadian banks disappointed income investors overall. In reaction to regional bank failures in the U.S. in March (Silicon Valley Bank and First Republic), banks increased the provision for credit losses.
The banks posted mixed earnings as a result. This quarter, CIBC (CM) fared the best. Bank of Montreal (BMO) posted noticeably high PCL.
CIBC reported revenue rising by 5.9% Y/Y to $5.7 billion. CET1 ratio improved to 11.9%, up from 11.6%. Its PCL increased by $130M Y/Y, to $438 million.
BMO raised its dividend by 3% to $1.47. However, it booked a PCL of $1.02 billion. This includes $517M related to its Bank of the West Purchase. Specifically, the unit’s loan portfolio accounted for $217 million of the PCL.
TD Bank (TD), which avoided losses by ending its buyout of First Horizon, posted $12.54 billion in revenue. Non-GAAP EPS was $1.94. TD issued a stock buyback plan of up to 30 million common shares or 1.6% of the shares outstanding.
The Bank of Nova Scotia (BNS) posted a revenue of $7.93B. Its PCL increased from $709M, compared to only $219M Y/Y. The CET1 ratio of 12.3%, up from 11.5% sequentially is a small bright spot.
