TD Bank, CIBC report stronger profit, boosted by capital markets

Thu Aug 28, 2014 11:33am EDT
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By Jeffrey Hodgson

TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote) and Canadian Imperial Bank of Commerce (CM.TO: Quote) reported higher third-quarter earnings on Thursday, extending a trend of buoyant capital markets boosting investment banking and trading profits at the country's big lenders.

Both banks posted earnings per share above estimates, though CIBC shares fell 2.5 percent, even as TD's stock outperformed its Canadian peers.

"It's a quality beat (for TD) in my book. I think if you had to do a comparison between the two, it was just a little bit stronger results out of TD. CIBC (had a) little bit of weakness in retail and business banking," said Tom Lewandowski, a financial services analyst for Edward Jones, who rates TD a "buy" and CIBC a "hold."

TD, Canada's second-largest lender, said net income rose to C$2.1 billion ($1.93 billion) in the quarter ended July 31, from C$1.52 billion a year earlier.

Excluding special items, earnings were C$1.15 a share. Analysts expected C$1.09 per share, according to Thomson Reuters data.

TD's stock slipped 0.4 percent to C$57.59 in Toronto, less than the broader 0.8 percent drop among financial service shares.

Profits at TD's Canadian retail arm jumped 54 percent to C$1.4 billion from a year earlier, when its insurance operation was hit with heavy claims from floods in Ontario and Alberta.

The division also benefited from the purchase of part of the lucrative Aeroplan Visa credit card portfolio from CIBC.   Continued...

Pedestrians use the CIBC ATM machines in Montreal, April 24, 2014. REUTERS/Christinne Muschi