Five Canadian banks report billions more in earnings
Published Thursday, August 30, 2012 8:26AM EDT
Last Updated Thursday, August 30, 2012 10:39PM EDT
The Royal Bank says profits increased by a massive 73 per cent in the third quarter of 2012 and earnings hit $2.24 billion.
The news comes as TD Canada Trust and CIBC also reported much higher earnings Thursday. And earlier this week, the Bank of Nova Scotia and Bank of Montreal both announced large profits and higher dividends.
Combined, Canada's five largest banks recorded a $7.8 billion profit in the third quarter of 2012 alone, soaring past expectations and recording a 45 per cent increase from a year earlier.
All five banks boosted their dividends as a result of the strong numbers.
The Royal Bank reported the highest numbers, and as a result the highest dividend increase. The bank's dividend will increase by 5 per cent to 60 cents per share -- an increase that follows an earlier increase of 6 per cent in the first quarter of 2012.
The bank's $2.24 billion in earnings -- equal to $1.47 per share -- was up from $1.29 billion in the same period one year earlier.
Total revenue for TD was $7.76 billion, compared to $6.9 billion a year earlier.
The bank's earnings were partly due to the strength of its Canadian consumer banking operations and strong performance in capital markets.
Net income from the bank's Canadian banking division was hit $1.127 billion, an increase of $239 million from last year.
The news Thursday exceeded analysts' predictions of per share earnings of $1.18.
Meanwhile, TD Bank also reported good news Thursday. The bank raised its dividend by five cents to 77 cents and said income rose to $1.7 billion in Q3, up from $1.49 billion a year earlier.
That translates to a per share increase from $1.58 to $1.78 in a year-over-year comparison.
Total revenue was also up for the bank, rising from $5.38 billion to $5.84 billion.
Analysts had predicted revenue would reach $5.79 billion.
It's been a good year for TD. The bank raised its dividend in the first quarter of 2012, despite a drop in net income, and saw profits rise by nearly 21 per cent in Q2 from a year earlier -- the strongest gain of any of the Canadian banks.
The CIBC also reported gains on Thursday, saying its net income for the third quarter of 2012 was $841 million, up from $591 million a year earlier.
CIBC's revenue was $2.1 billion in Q3, an increase of 2 per cent from the same period a year earlier.
That growth was largely due to volume growth and higher fees, The Canadian Press reports.
CIBC also announced a quarterly dividend increase of 4 cents, or 4.4 per cent, per share.
BNN's Michael Kane said the bank is performing strongly on a number of fronts.
"CIBC says its consumer banking division led the 42 per cent increase in overall earnings and seperately, CIBC announced an acquisition. It is buying a Texas-based energy advisory firm, Griffiths and Small LLC, price tag not announced."
On Tuesday, the Bank of Nova Scotia announced it was raising dividends by 3.6 per cent, to 57 cents per share. That followed news that the bank had made a $2.05 billion profit.
The Bank of Montreal also reported positive news for its shareholders on Tuesday, announcing dividends were rising 2.8 per cent to 72 cents a share, based on a $970-million Q3 profit.