Banks poised for 'solid growth' in Q2 despite uncertain economic backdrop: analysts
Analysts expect 19% earnings-per-share growth as banks set aside more for bad loans amid weaker housing and higher unemployment.
- Canada's Big Six banks are reporting second-quarter results, with Scotiabank, BMO Financial Group, and National Bank reporting on Wednesday while CIBC, Royal Bank, and TD Bank are scheduled for Thursday.
- Canada saw GDP expand 1.7 per cent in the first quarter, though headwinds persist from elevated unemployment and weakening home sales that have yet to rebound from last year's slowdown.
- Jefferies analyst John Aiken said "Provisions for credit losses will likely remain elevated but not spike" as credit remains a closely watched theme amid macroeconomic risks including elevated oil prices and weak housing.
- Scotiabank analyst Mike Rizvanovic said strong recent stock price performances imply shares already reflect earnings coming in "comfortably ahead of consensus expectations," as capital markets boosts drove broad earnings beats.
- Given lingering uncertainty from the Iran war and limited clarity on Canada-United States-Mexico Agreement negotiations, Aiken continues to believe Canadian banks are fully valued, though any shift to conservative commentary could be viewed negatively.
15 Articles
15 Articles
As Canadian banks prepare to publish their second quarter results, analysts expect year-on-year increases despite a "difficult" operating environment and a slowdown in loan growth.
The Toronto Star
Banks poised for ‘solid growth’ in Q2 despite uncertain economic backdrop: analysts
TORONTO - As Canadian banks get set to report second-quarter results next week, analysts expect year-over-year gains despite a "challenging" operating environment and slowing loan growth.
Banks Poised For 'growth' In Q2 Despite Uncertain Economic Conditions: Analysts
As Canadian banks get set to report second-quarter results next week, analysts expect year-over-year gains despite a “challenging” operating environment and slowing loan growth. Even with “serious potential headwinds,” Canadian banks are still seeing near historically high valuations, a trend that should continue this quarter, said Jefferies analyst John Aiken in a note on May 19. But he said any uncertainty “surrounding promised robustness of t…
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