December 4, 2014 / 4:08 PM / 3 years ago

TD Bank, CIBC shares fall after posting soft results

TORONTO (Reuters) - Shares of Toronto-Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) slid on Thursday after posting soft results in what is shaping up to be a disappointing fourth-quarter earnings season for Canadian lenders.

General view of a TD Bank branch and its drive-thru after the company held its annual general meeting in Calgary, Alberta, April 3, 2014. REUTERS/Todd Korol

TD Bank reported a weaker-than-expected profit, even as its revenue and earnings rose, and said it expects a more challenging operating environment in 2015.

And CIBC said its profit fell from a year earlier, hurt by the loss of some credit card revenue and softer results at its wholesale banking division.

TD shares fell 2.8 percent to C$55.30 in early trading in Toronto, while CIBC shares dropped 1.5 percent to C$105.59.

“Even for investors who have a positive bias on TD, we would find it hard to describe its fourth quarter earnings release as anything but surprisingly disappointing,” Barclays Capital analyst John Aiken said in a research note.

Canadian bank stocks also took a hit on Tuesday when Bank of Montreal (BMO.TO) posted a weaker-than-expected profit. Royal Bank of Canada (RY.TO) results on Wednesday were seen as roughly in line.

TD, Canada’s second-largest lender, said on Thursday its net income rose to C$1.75 billion ($1.54 billion), or 91 Canadian cents per share, in the fourth quarter ended Oct. 31, from C$1.62 billion, or 84 Canadian cents a share, a year earlier.

Excluding special items, earnings were 98 Canadian cents a share. Analysts had expected C$1.05 per share, according to Thomson Reuters data.

Chief Executive Bharat Masrani said in the earnings statement that looking to 2015, he expects the operating environment to be more challenging and the bank would focus on organic growth.

CIBC, Canada’s fifth-largest lender, said its net income fell to C$811 million, or C$1.98 per share, from C$825 million, or C$2.02, a year earlier.

Excluding items, the bank earned C$2.24 per share, falling short of the average analyst estimate of C$2.25.

CIBC shares dipped even though it raised its quarterly dividend by 3 Canadian cents to C$1.03 per share.

CIBC CEO Victor Dodig told analysts on a conference call the bank was still looking at buying asset management and private banking assets, particularly in the U.S. market, and could do deals in the C$1 billion to C$2 billion range.

“We’re looking to get scale in our businesses and therefore size is important,” he said, adding that the bank would be disciplined given “fairly robust” valuations.

Editing by Meredith Mazzilli

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