The big banks' third-quarter results were strong, showing decent profit growth relative to the contracting economy and depressed energy sector. But were there standout results as you drilled down into the numbers from individual banks? You bet. Here's a roundup of our best-of categories.
Best beat: Bank of Montreal, by 7.5 per cent.
Analysts have tended to be overly conservative about bank earnings in recent quarters, worrying investors with tales of loans losses, indebted consumers and slow economic activity. But the dour outlook allowed all Big Six banks to clear the low hurdles. BMO beat analysts' expectations for earnings per share, driven by lower-than-expected loan losses, and better-than-anticipated insurance operations and capital markets. But analysts are still sounding glum.
Biggest profit boost: Toronto-Dominion Bank, up 7.5 per cent.
Fair enough, analysts and the banks themselves tend to place relatively little importance on reported earnings, preferring to look at adjusted earnings that provide a better look at operating conditions. Still, these numbers come with no excuses, and TD showed the biggest gain, driven by an 11-per-cent increase in its Canadian banking operations.
Biggest adjusted earnings boost: Canadian Imperial Bank of Commerce, up 9.9 per cent (on a per-share basis).
We'll let Meny Grauman, an analyst at Cormark Securities, explain this one: "Over all, CIBC delivered another quarterly result that is hard to find too much fault in," he said in a note last week.
Best return on equity: Canadian Imperial Bank of Commerce, at 20.4 per cent.
Sure, CIBC has raised some concerns about its Canadian focus, given the fact that the domestic economy is underperforming the economy in the United States, where Royal Bank of Canada and Toronto-Dominion Bank have big operations. But this measure of profitability suggests that being all-Canadian isn't hurting – yet.
Biggest increase in provision for credit losses: Toronto-Dominion Bank, up $62-million.
Heading into the quarter, many observers were wondering how the banks would fare with their loans to the struggling oil and gas industry. Surely, this would be a problem area for the lenders. However, while TD showed an uptick in its provision for credit losses, the source was far from Alberta: U.S. retail loans were the biggest problem, and part of the increase was driven by the rising U.S. dollar.
Biggest dividend hike: National Bank of Canada, up 4 per cent.
Five of the six big banks raised their dividends this quarter – but National Bank's boost was the most generous. Of course, one quarter is not a trend. If you're looking for that, take a look at CIBC: The bank has boosted its dividend for four straight quarters, rewarding shareholders and deterring short sellers at the same time.
Lowest oil and gas exposure: Toronto-Dominion Bank, at less than 1 per cent of outstanding loans.
At a time when Canada's oil and gas sector is feeding a lot of uncertainty about its ability to repay its debts, low exposure to the sector can be seen as a good thing. The good news is that all of the banks have a relatively low exposure, averaging just 2 per cent of loans. TD's is half that average. At the other end of the scale, Bank of Nova Scotia and National Bank of Canada have an exposure of 3.4 per cent each.
Best stock performer in the third quarter: Canadian Imperial Bank of Commerce, down 3.5 per cent.
Sure, it is difficult to celebrate a share price that fell during the third quarter, but at least CIBC's fell less than its peers, perhaps suggesting that investors are behind the bank's transformation and sequential dividend hikes. While banks can move as a unified bloc, it appears as though investors are starting to pay closer attention to their different strategies: Scotiabank's shares were the hardest hit, falling 13.3 per cent in a move that reflected the lender's greater exposure to struggling emerging markets.