Uncertainty lingers around banks

TORONTO — Most of Canada’s biggest banks either met or beat expectations for their quarterly earnings, but uncertainty about what’s to come next year has some analysts less than optimistic, especially after Royal Bank’s (TSX:RY) results.

TORONTO — Most of Canada’s biggest banks either met or beat expectations for their quarterly earnings, but uncertainty about what’s to come next year has some analysts less than optimistic, especially after Royal Bank’s (TSX:RY) results.

Royal Bank reported Friday a $1.2-billion profit, up from $1.1 billion a year earlier, meeting analyst expectations of $1.06 per share according to Thomson Reuters.

But, Royal Bank shares closed down 2.6 per cent, or $1.48, to $56 on the Toronto Stock Exchange.

John Aiken, a banking analyst at Barclays Capital, gave a blunt explanation in a note to clients: “Just surpassing consensus (is) not good enough for the market.”

“While Royal Bank did exceed consensus expectations, it was far from the degree that some of its peers had done in the quarter. We believe that Royal’s results were solid, but less impressive than most of its peers.”

Scotiabank (TSX:BNS), the only major Canadian bank left to report its fourth-quarter earnings, is scheduled to post results on Tuesday.

Canada’s banks are considered among the most solid in the world and overall they performed relatively well during the quarter, but with year-end results come full-year outlooks for 2010 and that’s where doubts start to emerge.

Much of that is due to the state of the economy, which is backing off its recessionary levels at a sluggish pace, while slack jobs numbers have left some banks boosting their provisions for bad loans even as they cling to cautious optimism for next year.

Weakness in the jobs market often means that Canadians fall behind on their credit card payments, while a troubled economy often makes it hard for companies to meet their loan payments.

Just Posted

Central Alberta women donate grad dresses to families in need

Cha-ching – it’s grad season. Some central Alberta women know first hand… Continue reading

Red Deer man pleads guilty to role in 2015 stabbing

Daniel Boyd Sawyer sentenced in Calgary court to five years in prison for manslaughter

Photo: Celebrating Mother Earth in Red Deer

Women of all ages gathered to mark Earth Day

Man dead in ATV collision in central Alberta

Rocky Mountain House RCMP are investigating a quad rollover collision that left… Continue reading

Homeless activists outside Notre Dame demand “a roof too”

PARIS — Dozens of public housing advocates are protesting outside the gutted… Continue reading

Sri Lankan-Canadians mourn victims of terrorist attack in their homeland

Sri Lankan-Canadians were gathering Monday to mourn those killed in a massive… Continue reading

Residents along Saint John River told to remain on alert as floodwaters rise

FREDERICTON — People who live along New Brunswick’s Saint John River are… Continue reading

Prince Edward Island voters to cast verdict on new electoral system

CHARLOTTETOWN — Canadians are expected to learn late Tuesday whether the cradle… Continue reading

Early, photogenic iceberg raises expectations for Newfoundland’s season

ST. JOHN’S, N.L. — This historic port city welcomed an unexpected early… Continue reading

Captain Ghislaine Landry leads Canada to victory at Kitakyushu Sevens

KITAKYUSHU, Japan — Captain Ghislaine Landry scored with no time remaining and… Continue reading

Marchand scores twice as Bruins force a seventh game with 4-2 win over Leafs

TORONTO — After a flying start in front of a raucous home… Continue reading

Harry and Meghan’s royal baby: Questions asked and answered

LONDON — The time is drawing near for the impending birth of… Continue reading

Prince memoir ‘The Beautiful Ones’ coming out in the fall

NEW YORK — The memoir Prince was working on at the time… Continue reading

Most Read