Another year, another set of
record results from Canada’s biggest five banks.
In sharp contrast to developments at
banks south of the border, the sector continues to boast no
government bailouts; aggregate group net profits up sharply; even
retail earnings rose, in the process exceeding analysts’
estimates.
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Total group net profits at Canada’s Big Five
banks increased by 17.8 percent to C$13.48 billion ($12.7 billion)
for the 12 months to 31 October compared to C$11.4 billion in 2008.
And, despite the ongoing economic downturn, aggregate retail
earnings also rose, albeit only by 0.5 percent, to more than C$11
billion.
If ever anyone doubted the strength of
Canada’s strictly regulated, highly conservative banking sector,
the results of the past 12 months will surely have silenced any
remaining critics.
And with Tier 1 capital ratios at the five
banks ranging from 10.7 percent at Scotiabank to 13 percent at RBC
Royal, there remains scope for the banks to pursue international
acquisitions in the New Year.
At first glance, BMO Bank of Montreal had most
cause to celebrate, with its retail banking sector performance in
Canada and the US showing net earnings 15.1 percent up year-on-year
at C$1.5 billion.
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By GlobalDataBut alone among the Big Five, Scotiabank
succeeded in growing both group and retail banking earnings, up by
13 percent and 7.4 percent respectively for the 12 months to 31
October.
Each of the bank’s three business lines posted
record earnings with Canadian banking revenues up 9 percent
year-on-year, thanks in large part to an 8 percent rise in net
interest income from volume growth and a slightly improved
margin.
Even Canadian Imperial Bank of Commerce, the
country’s fifth-largest bank, which endured a miserable fiscal
2008, beat forecasts, with group profits of C$1.17 billion
following a loss of more than C$2 billion the previous year.
See Loyalty result thrills
RBC for interview with RBC’s group head of Canadian
banking, Dave McKay
Click here to
view the 2009 results
