Canadian Bank Stocks Up Ahead of Q1 Earnings

The S&P/TSX Index was up over 130 points towards the end of the noon hour on February 21. Canadian bank stocks are surging ahead of first quarter earnings. Although analysts expect a slowdown in mortgage portfolio growth due to new OSFI rules, strong Canadian and global growth, coupled with U.S. tax reform, has sparked optimism ahead of earnings season.

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), which is set to release earnings tomorrow, was up 1.36% in early afternoon trading. Shares of CIBC have dropped 5% in 2018 thus far. In 2017 CIBC reported net income of $2.42 billion, which represented a 12% increase from 2016. It U.S. Commercial Banking and Wealth Management division saw its net income soar 133% year over year to $203 million.

Royal Bank of Canada (TSX:RY)(NYSE:RY) is expected to release its first quarter results on Friday, February 23. Shares of Royal Bank were up 1.95% in early afternoon trading. The stock has inched down 0.19% so far in 2018. In 2017 Royal Bank reported net income of $11.46 billion which represented a 10% rise from the prior year. It posted double digit growth in each of its business segments.

Bank of Nova Scotia, Bank of Montreal, and National Bank of Canada are all set to release first quarter results in the middle of next week. Analyst consensus has all banks but BMO and CIBC surpassing Q1 2017 results. Scotiabank, Royal Bank, TD Bank, and CIBC are also likely to hike dividends.