Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce each got a quarterly profit boost from their U.S. footholds, but the latter lender’s shares slipped after its latest earnings fell shy of analyst estimates for the first time in four years. File photo by THE CANADIAN PRESS

Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce each got a quarterly profit boost from their U.S. footholds, but the latter lender’s shares slipped after its latest earnings fell shy of analyst estimates for the first time in four years. File photo by THE CANADIAN PRESS

TD, CIBC see profit bump helped by U.S. operation but analyst reaction mixed

Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce each got a quarterly profit boost from their U.S. footholds, but the latter lender’s shares slipped after its latest earnings fell shy of analyst estimates for the first time in four years.

TD Bank Group and CIBC both reported financial fourth-quarter net income increases of roughly nine per cent to $2.96 billion and $1.27 billion, respectively.

Both Toronto-based banks benefited from a presence south of the border, as TD and CIBC’s American operations delivered double-digit increases in net income during the three months ended on Oct. 31.

The quarter marked the end of a “tremendous year” for TD, with strong performances across all its businesses, said Bharat Masrani, the bank’s president and chief executive.

The bank’s U.S. retail operations, including TD Ameritrade, was a particular bright spot which earned $1.11 billion, up 44 per cent from $776 million a year ago.

“Our U.S. retail bank continued its strong momentum, building on our roots in retail, small business and commercial banking… We made significant investments to support this growth across all areas,” said Masrani on a conference call with analysts on Thursday.

TD beat expectations with adjusted profit that it says amounted to $1.63 per share for the quarter, up from $1.36 per share a year ago. Analysts on average had expected a profit of $1.62 per share, according Thomson Reuters Eikon.

TD’s American banking business, which has more than 1,200 locations along the U.S. East Coast, generated outsized earnings while its domestic operations were weighed down by higher expenses, analysts said.

“The U.S. business continues its excellent momentum and wholesale rebounded after a weaker Q3… Canadian retail performance looks to be tracking slightly below peers thus far,” said Scott Chan, an analyst with Canaccord Genuity in a note to clients.

TD said its Canadian retail business earned $1.74 billion in its fourth quarter, up from $1.66 billion in the same quarter last year, boosted by strong volumes and market share gains.

For its full financial year, TD earned $11.33 billion, up from $10.52 billion in 2017.

TD’s stock stayed relatively flat on Thursday, around the $73 mark on the Toronto Stock Exchange, but shares of CIBC fell as much as four per cent on Thursday to $111.41 from its previous close of $116.19.

CIBC’s stock slipped despite a quarter which capped off a year of record net income for Canada’s fifth-largest bank, up 12 per cent to $5.28 billion for the 12 months ended Oct. 31.

CIBC and TD’s latest earnings come after peers Bank of Nova Scotia and Royal Bank of Canada reported their results for the financial fourth quarter and 2018 year earlier this week.

Scotiabank reported quarterly net income of $2.27 billion, falling just short of expectations, while RBC beat estimates with net income during the period of $3.25 billion.

On an annual basis, RBC saw net income increase eight per cent to a record $12.4 billion, while Scotiabank’s profit for the financial 2018 year rose 5.8 per cent to $8.72 billion.

It was “a strong year” for CIBC, said its chief executive Victor Dodig, as the lender made progress on its strategy, including ramping up the proportion of earnings it derives from outside of Canada.

“Our U.S. region has grown from nine per cent of total CIBC earnings in 2017 to 16 per cent this year, showing we are well on our way to our target of 17 per cent in 2020,” he said on a conference call Thursday.

CIBC’s Canadian commercial banking and wealth management earned $333 million, up from $287 million, while the U.S. commercial banking and wealth management division earned $131 million, up from $107 million a year ago.

Still, the bank’s performance fell short of expectations. On an adjusted basis, CIBC said it earned $3 per diluted share in the quarter, up from an adjusted profit of $2.81 per diluted share in the same quarter last year. Analysts on average had expected a profit of $3.04 for the quarter, according to Thomson Reuters Eikon.

This marked the first miss for CIBC in four years, said Gabriel Dechaine, an analyst with National Bank of Canada Financial Markets. CIBC’s Canadian banking performance was “solid” but margins in its U.S. operations began to show “weakness,” he said.

Canada’s fifth-largest lender saw its U.S. commercial earnings retrace from a strong third quarter, down 19 per cent sequentially, said John Aiken, an analyst with Barclays in Toronto.

“Coupled with the overall miss against expectations was a surprising step back in profitability in CIBC’s U.S. operations its platform for future growth,” he said in a note to clients.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Rylee Trippel was last seen Friday. (Photo contributed by RCMP)
Red Deer RCMP looking for missing teen

Police are looking for a teen who was last seen in the… Continue reading

The Red Deer Outreach Centre’s Adopt a Family program raised $60,000 in 2020. (Photo courtesy Red Deer Outreach Centre’s Facebook)
Red Deer Outreach Centre’s Adopt a Family program raised $60K in 2020

The executive director of the Red Deer Outreach Centre says she is… Continue reading

The Red Deer and District Community Foundation needs to sell more tickets to host a raffle that will benefit the Women and Girls Endowment Fund.
Red Deer & District Community Foundation grants $167K to local women’s initiatives

Initiatives supporting women, girls, Two-Spirit and gender-diverse individuals will receive a combined… Continue reading

City of Red Deer says its roundabouts have sharply reduced the number of injury collisions at a pair of busy intersections. Alberta Transportation wants to incorporate five roundabouts into plans to twin Highway 11 from Sylvan Lake to Rocky Mountain House. Photo by PAUL COWLEY/Advocate staff
Highway 11 roundabouts will increase safety based on Red Deer’s experience

Injury collisions sharply reduced at roundabout intersections in city

As of Friday, Alberta has under 10,000 active COVID-19 cases. (Image courtesy CDC)
One new COVID-19 death in Red Deer, Alberta under 10,000 active cases

Alberta reported an additional 643 COVID-19 cases Friday. The province now has… Continue reading

Former Alberta Premier Rachel Notley shakes hands with Joel Ward, former Red Deer College President and CEO, as Notley announces that the college is on the path to grant degrees. Red Deer-South MLA Jason Stephan says university status is not a necessary condition for offering degrees. (File photo by Advocate staff)
Future of Red Deer University increasingly uncertain

MLA’s college update says RDC more like SAIT and NAIT than a university

Conservative Leader Erin O'Toole holds a press conference on Parliament Hill, in Ottawa, Thursday, Dec. 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Conservative Leader Erin O’Toole defends decision to back, then oust, Sloan

OTTAWA — Conservative Leader Erin O’Toole says he was once willing to… Continue reading

Quebec Premier Francois Legault pauses as he speaks during a news conference on the COVID-19 pandemic, Thursday, Jan. 21, 2021 at the legislature in Quebec City. THE CANADIAN PRESS/Jacques Boissinot
Non-essential travel ban would violate Constitution but courts might allow it: expert

MONTREAL — Fear that Quebecers will catch a new variant of COVID-19… Continue reading

A woman walks outside the Roberta Place Long Term Care home in Barrie, Ont. on Monday, January 18, 2021. The devastating toll of COVID-19 on long-term care residents in Canada has underscored the need for increased public funding for home care, advocates say. THE CANADIAN PRESS/Frank Gunn
COVID-19 deaths in long-term care reveal need for home supports: advocates

VANCOUVER — The devastating toll of COVID-19 on long-term care residents in… Continue reading

A Chinese flag is illuminated by sunshine in the Hall of Honour on Parliament Hill in Ottawa, Thursday, September 22, 2016. China is threatening retaliation against Canada after Prime Minister Justin Trudeau condemned a new security law giving Beijing more control over Hong Kong.. THE CANADIAN PRESS/Adrian Wyld
Diplomats contact Canadian held for over 2 years in China

BEIJING — Canadian officials have met online with former diplomat Michael Kovrig,… Continue reading

Marc Gold (centre) stands with senators André Pratte (left) and Peter Harder before being sworn in during a ceremony in the Senate on Parliament Hill, Thursday, Dec. 1, 2016 in Ottawa. THE CANADIAN PRESS/Justin Tang
Senator urges study of vexing barriers to using secret information in court cases

OTTAWA — A Senate committee should examine the hurdles that make it… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
Winnipeg ticket holder wins Friday night’s $60 million Lotto Max jackpot

TORONTO — A ticket holder from Winnipeg won Friday night’s whopping $60… Continue reading

A readers suggests using a hairdryer to open a tight jar lid. (Photo by The Associated Press)
Hints from Heloise: The handy hairdryer hint

Dear Heloise: Whenever you have trouble opening a tight jar lid, set… Continue reading

Professional-quality tools don’t just last longer, they’re also more comfortable and better balanced. This drill and impact driver are perfectly balanced on the triggers, which is ideal. (Photo by Steve Maxwell)
Houseworks: In praise of professional-grade tools

When I was 10 years old, my dad began renovating our kitchen,… Continue reading

Most Read