Magazine article American Banker

3 Canada Banks' Results Bolster Uptrend in Profits

Magazine article American Banker

3 Canada Banks' Results Bolster Uptrend in Profits

Article excerpt

Byline: Dow Jones and Matthew Monks

Three of Canada's six largest banks reported strong fiscal third-quarter results Thursday, easily beating analyst expectations. Their shares rose sharply.

Royal Bank of Canada's record results were driven in large part by strong trading revenues. Canada's biggest chartered bank earned $1.42 billion, or 95 cents a share, up 24% from a year earlier.

Toronto-Dominion Bank had a 17% improvement in adjusted third-quarter earnings, helped by strong contributions from its Canadian personal and commercial banking and wholesale banking segments. TD's net profit was $834 million, or 92 cents a share, but excluding some items, it earned $1.19 billion or $1.35.

National Bank of Canada said fiscal third-quarter earnings improved 6% from a year earlier. The Montreal bank had net income of $277.2 million, or $1.63 a share.

Royal Bank and TD both fared relatively well in the United States, which has been a problem area for Canadian banks.

Royal Bank's international division, which includes the $30 billion-asset RBC Bank in Raleigh, N.C., reported a net loss of $95 million, well below its $1.03 billion loss in the previous quarter. The big loss, due largely to a $915 million writedown of its U.S. operations, drove Royal Bank to its first quarterly loss in 16 years.

Royal Bank said in a statement: The "credit profile" in its U.S. business "is showing signs of improvement" as loan losses ease. It has been hard hit by the housing market's downturn in the Southeast.

TD's U.S. personal and commercial banking division, which includes the $126 billion-asset TD Banknorth Inc. with headquarters in Portland, Maine, and Cherry Hill, N.J., remained profitable. It reported $157 million in net income, though it earned $221 million, excluding charges for its purchase last year of Commerce Bancorp. …

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