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Streetwise newsletter: RBC kicks off bank earnings season; Teachers shifts strategy

Here are the top reads on deals and financial services over the last 24 hours,

Earnings: Royal Bank of Canada shrugged off concerns about trends in consumer credit and the global economy to report higher third-quarter profit and revenue, even as it set aside more cash to prepare for a rainy day. Each of the bank’s core divisions – retail banking, wealth management and capital markets – pitched in to propel profit 11 per cent higher than a year ago, despite less stellar results from investor and treasury services, and the bank’s insurance arm. Story (James Bradshaw, for subscribers)

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Pensions: Ontario Teachers' Pension Plan is shifting its massive portfolio into global markets and inflation-sensitive investments, based on concerns that asset classes such as equities and infrastructure are overvalued. Teachers outlined the shift in strategy, now two years in the making, on Wednesday as it announced financial results for the first half of the year, when the fund posted a net return of 3.2 per cent. Net assets reached $193.9-billion, a $4.4-billion increase from the end of last year. Story (Andrew Willis, for subscribers)

MORE DEALS NEWS

Loan: A nascent federal agency designed to find new ways to finance construction of transit systems is making its first investment in a multibillion-dollar electric rail system in Montreal. The Canada Infrastructure Bank will provide a $1.28-billion loan to help build the $6.3-billion system largely managed and funded by Quebec’s pension regime, with interest rates rising from one per cent to three per cent over the 15-year term. Story

Energy sector: Brookfield Business Partners and Macquarie Capital have signed a deal to sell Australian oil and gas company Quadrant Energy to Santos Limited for $2.8 billion (US$2.15 billion). Story

IPOs: Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday. Story

Tesla buyout: Investors in the debt and in the equity options of electric car maker Tesla are betting the take-private deal described by chief executive officer Elon Musk will not materialize. Story

Tesla Inc Chief Executive Elon Musk’s contemplated US$72-billion take-private deal is presenting investment bankers with a dilemma: overlook concerns about how feasible it is or risk missing out on what could be this year’s biggest and most high-profile acquisition. Musk did not just catch investors and analysts off guard earlier this month by announcing on Twitter he was considering taking the U.S. electric car maker private. He also sent shockwaves throughout the investment banking world, which reacted to the news with both excitement and bewilderment. Story

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Consumer good sector: Sears Holdings Corp is facing a familiar foe in its bid to sell off the Kenmore appliances brand: the U.S. government body that oversees the pensions for the company’s 100,000 retirees. Story

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