Toronto-Dominion Bank and Canadian Imperial Bank of Commerce reported fourth-quarter profits that topped analysts’ estimates on higher investment-banking earnings and trading revenue.
TD, Canada’s second-biggest bank by assets, said profit for the period ended Oct. 31 was little changed at $1.01 billion, or $1.12 a share. CIBC, the number-five lender, said profit rose 48% to $644 million, or $1.56 a share.
The Toronto-based banks benefited from higher fees for arranging stock sales and increased trading revenue after the Standard & Poor’s/TSX Composite Index soared 31% this year. The banks join Bank of Montreal and Canadian Western Bank in beating or matching analysts’ estimates for the quarter.
TD said it earned $1.46 a share before one- time items, higher than the $1.30-a-share median estimate of eight analysts surveyed by Bloomberg News. CIBC earned $1.41 a share excluding one-time items, topping the $1.33-a-share median estimate of 13 analysts.
TD's investment bank had record profit of $372 million, compared with a year-earlier loss of $228 million when the bank recorded trading losses and debt-related writedowns. The bank set aside $521 million in provisions for loan losses, compared with a year-earlier $288 million.
Canadian consumer banking profit climbed 4 percent to $622 million, while U.S. consumer banking declined 51% to $122 million due to restructuring charges and other costs. Toronto-Dominion bought Commerce Bancorp Inc. in March for about $7.1 billion, giving the lender about 1,000 branches in the U.S.
Asset-management earnings, which include results from the bank’s stake in TD Ameritrade Holding Corp., declined 8.2% to $156 million.
For the full year, Toronto-Dominion earned $3.1 billion, or $3.47 a share, compared with $3.83 billion, or $4.87 a share in fiscal 2008.
CIBC's investment banking rose 18% to $154 million in the quarter on higher trading income and fees from arranging equity financings. Trading revenue was $361 million, compared with a $599 million trading loss a year earlier, the firm said.
Consumer banking profit fell 17% to $474 million on rising credit provisions. The bank set aside $424 million for bad loans, mostly in its consumer lending unit, up from $222 million a year ago.
The four Canadian banks that reported results have met or beat analysts’ estimates. Bank of Montreal, which reported Nov. 24, said profit rose 16% to $647 million, or $1.11 a share. Canadian Western Bank, the country’s eighth-largest bank, yesterday reported record profit of $30.4 million, or 39 cents a share.
Royal Bank of Canada, the country’s largest lender, reports results tomorrow, and Bank of Nova Scotia, the number-three bank, reports Dec. 8.
TD rose 41 cents to $67.79 yesterday in Toronto Stock Exchange composite trading. CIBC fell 25 cents to $68.48.
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