Good morning! Bank earnings season starts Friday and Stephanie Hughes will be covering it from start to finish. Be sure to check out her reporting on Financialpost.com. This week’s newsletter kicks off with two stories to get you in the mood, plus Barbara Shecter explores why fiduciary duty is emerging as key fault line in the climate-change fight.
— Joe Hood, Managing Editor, Financial Post
|
Speculating on succession
|
Scotiabank surprised the street when it announced in September that Scott Thomson would take over for Brian Porter as chief executive. But it isn’t the only bank that has made changes recently. The last few months have seen a series of high level executive shuffles, with the most action taking place at CIBC. So are there other succession dramas brewing on Bay Street? As Stephanie Hughes writes in the lead up to earnings season, it is probably too early to tell if the changes are just business as usual or whether they portend bigger moves are afoot. But it’s worth noting that the last time Scotia swapped CEOs, three other banks followed suit within a year.
THE BAY STREET SHUFFLE
|
Will earnings season slow bank stocks’ roll?
|
CIBC kicks off bank earnings season on Friday and one of the big questions on analysts’ minds is whether bank stocks can keep up their hot start to the year. At least two, Meny Grauman at Scotiabank and Scott Chan at Canaccord Genuity, think the banks have gotten ahead of themselves, with little to justify their outperformance. Among the key concerns are that investors may have jumped the gun in assuming that interest rates have peaked and will start falling later this year. With the labour market staying red hot, the Bank of Canada’s pause seems a little less of a sure thing. Increased regulatory risk and capital requirements, on top of shaky credit markets, are adding to the headwinds. John Aiken at Barclays, however, has a different take: He thinks the bad news is already baked in, and that results over the next week or so aren’t likely to change the picture.
DUE FOR A PULLBACK
|
Was this newsletter forwarded to you?
Sign up here to get it delivered to your inbox.
|
Why fiduciary duty is a focal point in the fight over ESG investing
|
Pension fund administrators and managers have a fiduciary responsibility to the members of the plans they run. In layman’s terms, that means they are legally obligated to put the plan members’ interests first. But precisely what that entails is emerging a key fault line — or point of attack, depending on who you ask — in the debate over the role institutional investors should play in combatting climate change. One global group, Principles for Responsible Investment (PRI), thinks there is a legal obligation for Canadian funds to take the potential long-term destructive impacts of climate change into account when they invest, even if it comes at the cost of short-term returns. In the absence of firm rules, pensions are taking varied approaches. As Barbara Shecter reported in this in-depth look at the issue, that kind of haphazard response isn’t good enough for PRI.
WHO’S YOUR FIDUCIARY?
|
Mortgage billionaire Stephen Smith hires ex-TD banker to lead family office
CIBC agrees to pay US$770M to fully resolve lawsuit with Cerberus
HSBC eyes special payout on Canada sale after Ping An battle
Holiday spending hangover to strain pocketbooks until spring, RBC poll finds
ChatGPT and the end of white-collar work as we know it — or maybe not quite
Silicon Valley Bank profit squeeze in tech downturn attracts short sellers
|
