Loan loss provisions continue to soar
Funds set aside for possible loan losses continued to climb among Canada’s banking giants as TD and Canadian Imperial Bank of Commerce (CIBC) closed out Q1 earnings seasons by revealing higher credit loss provisions.
TD set aside $1 billion for potential loan losses in the first quarter, up from $690 million a year prior, with adjusted net income slipping to $3.64 billion – a decrease from $4.15 billion in Q1 2023.
A slight uptick in net income for the bank’s Canadian personal and commercial banking unit (3%) was countered by a big drop on the US retail side, which saw net income dip by 43%.
CIBC, meanwhile, revealed provisions for credit losses of $585 million compared with $295 million last year, although first-quarter profit jumped from $433 million a year ago to $1.73 billion this time around with revenue rising by 5% on a year-over-year basis.
RBC and National Bank of Canada posted better-than-expected earnings in the first quarter of the year even as both banking giants set aside higher provisions for loan losses.https://t.co/l1vZ5nD9yq#mortgageindustry #marketupdates #financialmarket #financialresults
— Canadian Mortgage Professional Magazine (@CMPmagazine) February 28, 2024
Diluted earnings per share at the lender came in at $1.81 – down from $1.94 in Q1 2023 but higher than the $1.66 expected, according to financial markets data firm Refinitiv.
Thursday’s announcements mark the end of earnings season among Canada’s traditional Big Six lenders, with Scotiabank, Bank of Montreal (BMO), Royal Bank of Canada (RBC), and National Bank of Canada having all seen financial results marred by higher provisions for credit losses in the first quarter.
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