Some of the top Canadian stocks listed on the TSX 60 – the stock market index of the 60 biggest companies listed on the Toronto Stock Exchange – are the banking stocks. Many people trade Canadian stocks from the banking sector because they are historically quite secure. With the year’s close bringing with it all the final quarter reports, all it may take is some underperformance to stir volatility in some of these markets.
Bank of Montreal (BMO)
The Bank of Montreal posted its final quarter financial earnings release on December 4. The Bank of Montreal reported a 38% increase in quarterly net income to C$1.7 billion, up from C$1.23 billion in 2017.
BMO’s US personal and commercial banking arm boasted a 37% increase in net income, with a value of C$372 million. However, the bank’s capital market arm reported a net income of C$298 million, which is a 6% decrease from the same quarter a year ago. Over the year, the Bank of Montreal generated C$5.45 billion, which is up by 2% from 2017. Consequently, BMO will now pay a quarterly dividend of C$1 per share – up four cents from its previous dividend. Despite this, BMO’s share price slipped to C$95.85 that day.
Canadian Imperial Bank of Commerce (CIBC)
Canadian Imperial Bank of Commerce posted a net income for the quarter of C$1.27 billion, which marks a consecutive gain for the last four quarters. This is also up on the same quarter last year where they made C$1.16 billion, and up almost 7% from Q3 2018. CIBC’s annual net income totalled C$5.3 billion – a 12% increase year-on-year. This was the biggest increase in annual net income out of all the ‘Big Five’. Despite an improved year-on-year performance, CIBC shares declined 3.4% on the New York Stock Exchange in light of this announcement.
Royal Bank of Canada (RY)
As one of Canada’s biggest lenders, the Royal Bank of Canada exceeded estimates with a quarterly net income of C$3.25 billion, leading to a record breaking annual gain of C$12.4 billion. Up 8.4% on the previous year, this is the second largest annual increase for a Canadian bank this year.
The personal and commercial banking arm of RBC announced a 5% earnings growth of C$485 million, as well as a 23% earnings growth in wealth management and a 10% gain in capital markets. This news facilitated the day’s increase in share price, which was a steadying influence after the prior week’s drop.
Study the Royal Bank of Canada (RY) stock chart here.
Laurentian Bank of Canada (LB)
The Laurentian Bank of Canada has not been holding up as well as some of the bigger Canadian international banks. It’s fourth-quarter net income dropped by 13% to C$50.8 million due to lower revenue and loan volumes. This figure was lower than analysts had expected. However, for the full financial year, LBC reported a net income of C$224.6 million, up 9% from C$206.5 million for the 2017 period. Upon announcement, the LB stock witnessed a downtrend, dropping 5% in under 24 hours.
Study the Laurentian Bank of Canada (LB) chart here.
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