Good morning! In this week’s newsletter, we have all the results from bank earnings season, TD’s First Horizon takeover hits a snag and the battle for Canaccord starts for real. Hope you enjoy.
— Joe Hood, Managing Editor, Financial Post
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Why earnings season’s good news may not last for Canada’s big banks
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The good news is that Canada’s big banks have been beating expectations so far this earnings season. The bad news is that there is little to suggest it’s going to last. While profit was down at most banks as expected, earnings came in stronger than anticipated in large part due to strong performances in trading and capital markets. The big problem is that those gains may be volatile — analysts would much prefer to see strong growth in core banking operations, especially heading into what is expected to be a rough economic patch. Stephanie Hughes has been following all the action — you can read her full reporting below.
Scotiabank CEO vows to improve shareholder returns after earnings miss
CIBC beats expectations despite profit drop
RBC beats expectations despite profit drop due to higher bad-loan provisions
BMO beats expectations despite profit fall
National Bank beats expectations despite higher expenses, credit loss provisions
Laurentian Bank beats analyst expectations
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TD Bank’s $13.4-billion deal at risk
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Toronto-Dominion Bank’s US$13.4 billion deal to acquire U.S bank First Horizon was slated to be the centrepiece of its U.S. expansion strategy. But a regulatory filing this week, in which TD said it was being forced to push back the outside date for the acquisition indefinitely due to regulatory issues, is bringing the possibility the deal won’t close at all into play. If the deal collapses, it will be a major blow to TD, which is set to add more than a million individual and business customers across 12 states.
DARKENED HORIZON
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Valuation raises stakes in Canaccord takeover battle
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The management-led bid to take Canaccord Genuity private formally got underway this week, but the special committee of the company’s board, which is opposing the transaction, is not backing down without a fight. As Barbara Shecter reported, an RBC valuation commissioned by the committee pegged the firm’s value at up to 40 per cent above the $1.1 billion offer from the management group. The committee has also enlisted Barclays Capital Canada Inc. to explore other strategic options. The management group, for its part, called RBC’s valuation “highly theoretical, unrealistic and flawed.”
BATTLE FOR CANACCORD
MORE: Meet the two former CIBC bankers on opposite sides of the Canaccord showdown
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Pension giant Caisse lost $24.6 billion last year investing in ‘worst market in 50 years’
‘Fast and furious’ bank stocks may be running out of road, analysts warn
TD Bank to pay $1.2 billion to settle lawsuit tied to Allen Stanford Ponzi scheme
Swiss bankers face trial accused of helping Putin’s friend transfer cash
These are the 15 most and least affordable cities in Canada in the first year of homeownership
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