Canadian banks set for earnings decline but investors optimistic about recovery By Nichola Saminather
FILE PHOTO: A Bank of Montreal (BMO) sign is seen outside of a branch in Ottawa
TORONTO (Reuters) – Canadian banks are set to post their fourth straight year-on-year quarterly profit drop when they report results next week, the longest decline streak since the financial crisis, on margin compression and declining commercial lending, but flattening loan loss provisions signal a turning point, investors said.
Banks’ profit margins are also expected to get a boost from rising 10-year bond yields in Canada and the United States in future quarters as short-term rates remain near zero. Banks often fund their lending with short-term borrowing or bank deposits.
Canadian banks set for earnings decline but investors optimistic about recovery reuters.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from reuters.com Daily Mail and Mail on Sunday newspapers.
CIBC scraps Caribbean sale as Canadian banks face hurdles selling overseas assets
By Nichola Saminather
b(Reuters) - Canadian Imperial Bank of Commerce (CIBC) became the latest Canadian bank to face hurdles in exiting disappointing acquisitions, joining rivals still holding overseas assets they have sought to sell even as they look to deploy record levels of capital.
Canada s fifth-largest lender said on Wednesday it had scrapped the $797 million sale of a 66.7% stake in its FirstCaribbean business to GNB Financial after failing to get regulatory approval.
CIBC s inability to exit challenging Caribbean markets reflects the hurdles Canadian banks have faced in making an M&A strategy work. The problem is especially acute now with the banks sitting on combined excess capital of C$70 billion ($55 billion), due to a pandemic moratorium by regulators on share buy backs and increasing dividends.
(Recasts with divestment challenges across the banking sector; adds investor, analyst comments)
Feb 3 (Reuters) - Canadian Imperial Bank of Commerce (CIBC) became the latest Canadian bank to face hurdles in exiting disappointing acquisitions, joining rivals still holding overseas assets they have sought to sell even as they look to deploy record levels of capital.
Canada’s fifth-largest lender said on Wednesday it had scrapped the $797 million sale of a 66.7% stake in its FirstCaribbean business to GNB Financial after failing to get regulatory approval.
CIBC’s inability to exit challenging Caribbean markets reflects the hurdles Canadian banks have faced in making an M&A strategy work. The problem is especially acute now with the banks sitting on combined excess capital of C$70 billion ($55 billion), due to a pandemic moratorium by regulators on share buy backs and increasing dividends.