TD Bank, CIBC shares fall after posting soft results

Thu Dec 4, 2014 11:03am EST
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By Jeffrey Hodgson

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

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: Quote) posted a weaker-than-expected profit. Royal Bank of Canada (RY.TO: Quote) 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.   Continued...

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