Bank Nerd

Scotiabank Announces Expansion in Global Platforms

Sensei — Tue, 07 Sep 2010 14:26:52 +0000

Canada’s most international bank has announced today that there will be a change in organizational structure that will enable them to capitalize on opportunities for strategic growth.

To help support the new structure, Scotiabank has also announced a series of executive appointments.

Scotiabank has announced a re-organization into four business lines:

- Canadian Banking

- International Banking

- Scotia Capital

- Global Wealth Management

Rick Waugh, Scotiabank President and CEO noted that for some time Scotiabank has been a leader in the international markets where they operate, and with the changes made today, Scotiabank will be in a position to seize significant global business opportunities that align with their strategic plans.

Global Wealth Management will become the fourth pillar in Scotiabank’s strategy of diversification across multiple geographies, product lines and strong businesses. Existing wealth management and insurance in Canada and internationally will be combined into Global Wealth Management, along with Global Transaction banking.

Scotia Capital will have a broader mandate, which has been expanded to capitalize on the significant wholesale opportunities in international markets where Scotiabank has a strong presence.

These changes will help accelerate the progress of several initiatives that are well underway noted Waugh.

To support the changes to their organizational structure, Scotiabank is making several senior leadership appointments.

Scotiabank will continue to remain firmly committed to their five key business priorities:

- Sustainable revenue growth

- Capital management

- Leadership

- Prudent risk management

- Expense management

This new structure is expected to leverage Scotiabank’s progress to date and position them to compete and win in the global marketplace.

With the changes made, we can expect to see big things from Scotiabank in the coming months. I cannot wait to see what these changes will do for Scotiabank on the global scale.

. Tags: business lines, business priorities, executive appointments, expense management, global business opportunities, global marketplace, global transaction, global wealth, international banking, leadership appointments, management leadership, rick waugh, scotia capital, Scotiabank, strategic plans, transaction banking, wealth management and insurance, wholesale opportunities

Big Six Banks Earn $5.1B

Sensei — Sat, 04 Sep 2010 14:32:43 +0000

Canada’s five largest banks have earned a combined $5.1 billion in the third quarter profit, which is 8% more than last year. We saw the banks grow their profits as they cashed in on strong growth in mortgages, consumer and corporate loans and other retail operations.

In the 2009 period, results were at $4.7 billion, as banks too a huge hit from weakness in their capital markets divisions as economic uncertainty affected the returns on stock markets.

Overall, we saw that the third quarter results were mixed with four of the six banks missing analyst expectations for this period.

The economic recovery in the last year and continued growth in the housing market has helped boost the banks’ main lending businesses to ordinary consumers and companies. With a healthier economy, we saw the number of bad loans reduce.

TD Bank chief Ed Clark said that TD saw the best credit quality and lowest credit losses in seven quarter across all of our businesses.

Clark continued to say that the strength of the housing market was able to drive strong volumes in real estate lending and business deposits, which became a great source of growth.

Despite all of this, it is hard to ignore the potential dangers that are still able to threaten Canada’s banking industry, despite being acclaimed as one of the best in the world after going through the financial crisis with little damage.

A key weakness with each of the Big Six banks was their capital markets results. Overall, earnings for the divisions were nearly halved to $1.05 billion as trading revenues declined from what it was last year when the economy was first showing signs of a recovery.

For the most part, when a bank in the Big Six missed analyst expectations, it was as little as a penny short.

Hopefully results for the capital markets divisions will improve in this quarter, however I am not getting my hopes up because the markets are still quite shaky.

. Tags: 8b, analyst expectations, bank chief, banking industry, big six, business deposits, capital markets, corporate loans, credit losses, credit quality, economic recovery, economic uncertainty, ed clark, financial crisis, great source, housing market, markets results, quarter profit, retail operations, stock markets, third quarter results

BMO Lowers Mortgage Rate

Sensei — Sat, 04 Sep 2010 13:36:03 +0000

BMO has announced that it will be decreasing its popular five year low rate mortgage from 3.79% to 3.59%. This decrease will be able to provide homebuyers the incentive they need to kick-start their fall house hunting season.

To be honest with everyone, the housing market has definitely decreased over the past few months. Sales has definitely dropped, however there are cases where houses are sold way above their asking price, even after being underpriced.

Over the past week alone there have several reports that have noted how the market has declined, and even one which reported housing prices are to due to fall.

The Canadian Real Estate Association has forecasted a drop in prices in 2011, which can mean that in the upcoming months house prices will gradually begin to fall.

With BMO lowering their five year low rate fixed mortgage, homebuyers can guarantee their mortgage rate by getting pre-approved ahead of time. By getting pre-approved you can assure yourself a great rate as you continue to search for your dream house.

With a pre-approved mortgage you guarantee your mortgage rate for up to 90 days, which means if your rate increases during that time span you are covered.

BMO’s special five year low rate fixed mortgage continues to offer the lowest fixed rate for a five year term. With this, it allows customers to repay their mortgage faster with a maximum 25 year or less amortization.

With that said, do not delay with your search for your home because interest rates are bound to go up in the upcoming months.

. Tags: amortization, asking price, canadian real estate, fixed rate, housing market, hunting season, interest rates, mortgage rate, pre approved mortgage, rate increases, real estate association

CommunityLend Expands Unique Lending System to BC

Sensei — Fri, 03 Sep 2010 15:00:47 +0000

CommunityLend, Canada’s first “peer to peer” lending platform has recently launched in British Columbia after a fairly long regulatory and registration process.

What is CommunityLend?

CommunityLend is Canada’s only online Peer-to-Peer lending platform. The current President and CEO of CommunityLend is Michael Garrity. Garrity has expressed his excitement as CommunityLend extends their services into BC as the banking community there has shown itself to be quite open to a smaller bank approach to financial services.

What is Peer-to-Peer lending?

Peer-to-Peer lending is financial service innovation that cuts out the traditional middlemen in the lending process, which includes banks and credit card companies, by facilitating the direct matching of borrowers to investors through online loan auctions.

By allowing borrowers the ability to connect directly with lenders through a safe and secure online system, it is widely expected that borrowers will be able to benefit from better rates for their loans through price competition and lenders get to benefit from having direct access to Canada’s consumer credit market as an investment category.

Peer-to-Peer lending is expected to grow 66% over the next 3 years according to research by Gartner.

Peer-to-Peer lending has been called “game changing” by the financial industry analyst Javelin Research and has also been recognized by the Harvard Business Review in their 2009 List of Breakout Ideas.

This situation allows no one to lose.

According to Garrity, the CommunityLend online peer-to-peer lending system aims to satisfy three essential market needs in Canada:

Helping Canadian borrowers get better rates on loans by creating real competition for their loan requests.
Giving Canadian investors the opportunity to directly participate in Canada’s large consumer credit market as an investment category
Providing communities with the opportunity to positively influence the lending process for their members by highlighting their collective needs and responsibilities.

CommunityLend’s lending platform is a great idea, and honestly I cannot wait to see how it will influence BC. If everything goes well, like anticipated, it will only be a matter of time before it is launched directly throughout other provinces.

. Tags: 3 years, borrowers, british columbia, canadian investors, consumer credit, direct access, gartner, harvard business review, industry analyst, investment category, lenders, loan requests, michael garrity, peer to peer lending, price competition, service innovation, smaller bank, traditional middlemen

CIBC Acquires Canadian MasterCard Portfolio

Sensei — Fri, 03 Sep 2010 14:51:32 +0000

CIBC has recently announced that it has completed its acquisition of an approximately $2 billion credit card portfolio from Citigroup’s Canadian MasterCard business which now makes CIBC the largest dual issuer of Visa and MasterCard credit cards in Canada.

The MasterCard portfolio includes accounts associated with co-branded Petro Canada credit cards that offer the Petro Point rewards program.

Before this acquisition, CIBC has more than $14 billion in outstanding credit card balances prior to the addition of the MasterCard portfolio, which is expected to be immediately accretive to CIBC’s earnings.

With this acquisition, CIBC stays consistent with its strategy to grow their core Canadian franchise. Gerry McCaughey, President and CEO of CIBC noted that the acquisition represents an important addition to their client base in a business where they have a leading presence in the Canadian marketplace.

How I see it, with this acquisition, CIBC’s presence becomes even stronger, and they can leverage that presence in the credit card business.

Under the terms of the transaction, prior to closing, any non-performing accounts were removed from the acquired portfolio and from the securitized pool relating to Broadway Credit Card Trust.

CIBC will be acquiring all of the outstanding Class B notes, Class C notes and Series Enhancement Notes issues by the Trust and will be assuming the servicing and associated responsibilities in respect of the Trust.

CIBC is a leading Canadian based global financial institution, and with this acquisition it further strengthens their place in the world, and in Canada as a force to be reckoned with.

Currently, out of the Big Six banks in Canada, RBC is the only bank to offer both Visa and MasterCard. RBC recently released the WestJet RBC MasterCard and the WestJet RBC World MasterCard.

All that is left now is to wait and see what MasterCards CIBC begins to produce. It will only be a matter of time before we see CIBC taking advantage of being the largest dual credit card issuer in Canada.

. Tags: big six, canada credit cards, canadian marketplace, card portfolio, CIBC, class c, credit card business, credit cards in canada, global financial institution, mastercard credit cards, matter of time, mccaughey, petro canada, petro point, RBC, westjet, world mastercard

McGuinty Urges the Bank of Canada Not to Raise Interest Rates

Sensei — Thu, 02 Sep 2010 15:45:00 +0000

Premier Dalton McGuinty has given a message to the Bank of Canada, and that is not to raise interest rates next week.

McGuinty has noted that Canada’s economic recovery is still fragile, and as such they should be careful as to now do anything that would increase expenses or drive up costs.

McGuinty advised the Bank of Canada is to not raise interest rate, not at this point in time. He continues to say that recovery has definitely taken hold, however by no means is it a vigorous and robust recovery.

This is interesting as we hardly see the Premier come into monetary policy, and seeing as he has urged the central bank to put a halt on any further rate hikes, it definitely should be taken into account before any decisions are made. We have to remember that we have to be wary of rate hikes as the U.S. may slip into a double dip recession.

The Bank of Canada is set to meet Sept. 8^th to set interest rates; currently its trendsetting rate is 0.75%.

Despite all of this, there are doubts that Governor Mark Carney will proceed with a further rate hike, due to the fact that Canada’s economy slowed down more than anyone may have expected in the second quarter.

This week we saw Statistics Canada report that the economy fell 2% in the April – June quarter. Consumers began to tighten their pocketbooks, not to mention housing has weakened quite a bit in comparison to a year ago.

Personally, I do not think another rate hike is necessary at this point; I feel we should deal with what we have now and adjust to the current situation before making any more changes.

. Tags: Bank of Canada, canada report, consumers, current situation, decisions, double dip recession, doubts, economic recovery, interest rate, interest rates, mark carney, monetary policy, pocketbooks, point in time, premier dalton mcguinty, rate hike, rate hikes, robust recovery, second quarter

TD Profits up 29%

Sensei — Thu, 02 Sep 2010 15:29:04 +0000

TD Bank has released their third quarter report, and has noted that their profits grew 29% in the third quarter to $1.18 billion, narrowly missing expectations.

These results, which were released today were equivalent to $1.29 per diluted share for the quarter, and compare to a net income of $912 million in the same period a year ago.

TD, a bank which has major branch networks in Canada and the United tates, reported that both lower loan losses and strong earnings in its domestic retail business pushed the quarter earnings higher.

Similarly to Scotiabank’s third quarter report, TD fell short by a penny, according to Thomson Reuters. On an adjusted basis that excludes certain items, earnings per share were $1.43 a share.

Revenue has risen to $4.74 billion from $4.66 billion a year earlier.

In TD’s wholesale banking division, profits have dropped about 45% to $179 million on weaker trading results as economic uncertainty affected stock markets. With weaker trading results, it has lead to lower corporate financings and weaker profits on stock and bond trading.

TD Securities CEO Bob Dorrance noted that this quarter’s challenging markets were a clear contrast to the favorable conditions seen a year ago. Dorrance expects to see the markets to remain challenging in the short term, as they continue to build on their franchises and strengthen on their platforms for future success.

Provisions for credit losses have dropped to $339 million compared to $557 million in the same period last year, as we saw more of TD’s corporate and retail clients paid back their loans back on time. TD has said that it expects credit losses will remain stable for the rest of the year.

Despite falling short of analyst expectations, TD has done well this quarter. Personally, I do not see anything wrong with the results for the third quarter, with profit up 29% it definitely shows that TD has done quite well.

. Tags: adjusted basis, analyst expectations, bond trading, branch networks, credit losses, diluted share, dorrance, earnings per share, economic uncertainty, favorable conditions, financings, loan losses, quarter earnings, quarter report, retail clients, share revenue, stock markets, tates, wholesale banking

Canadian Economy Slows Down

Sensei — Wed, 01 Sep 2010 13:31:05 +0000

The Canadian economy has grown slowly throughout the spring and early summer, even slower that people had expected. There are an increasing amount of fresh concerns about the strength of the economic recovery.

The latest GDP report from Statistics Canada has also casted doubt on whether the Bank of Canada will continue raising interest rates. The GDP product grew at an annualized rate of 2% in the second quarter, which is less than half the 5.8% growth the economy chalked up in the first 3 months of the year.

Economists have forecasted a gain of 2.5%.

The report from Statistics Canada confirms that Canada’s economy continued to regain lost ground through the recession in the second quarter, although it is going at a slower pace than in the early days of the recovery.

Despite recovery now moving along at a slower pace, Canada still outpaces the U.S., which posted an increase of 1.6% over the same period.

BMO Capital Markets senior economist Doug Porter noted that there was no single surprise that explained the softer than expected results, instead there were just a bunch of somewhat sub-par results.

What helped slow growth down was the decline seen in the home resale market, and in the retail and wholesale trade.

After seeing the Canadian economy come out of the recession in the first quarter, economists had all expected to see the Bank of Canada raise interest rates throughout the rest of the year to keep inflation on hold.

CIBC World Markets chief economist, Avery Shenfeld noted that the September rate decision by the Bank of Canada is “no slam dunk”. Seeing as the second quarter GDP is far more materially below the bank’s initial forecast, and as inflation is also below its forecast, the bank has been given more breathing room.

Despite the slowdown in recovery, Canada is still performing quite well, especially in comparison to other countries around the world. Looking at the positive side of things is that we will definitely not see a double dip, and although the economy is slowing down, it will never reach a standstill.

How do you feel about the Canada’s current economy?

. Tags: Bank of Canada, breathing room, canadian economy, capital markets, chief economist, double dip, doug porter, economic recovery, gdp report, quarter gdp, recession, recovery canada, resale market, slam dunk, slowdown, statistics canada, wholesale trade

Scotiabank Profits Rise 14%

Sensei — Tue, 31 Aug 2010 15:34:37 +0000

Scotiabank has released their third quarter reports, and it shows that their third quarter profits has risen 14% to nearly $1.1 billion, even as capital markets division was hit by the same earnings decline experiences at other Canadian banks.

Scotiabank is well known as being Canada’s most international bank, and their net income was the equivalent to cash earnings of 99 cents per share, having missed analyst estimates by a penny according to Thomson Reuters.

The profits from the same period a year ago were $931 million. Total revenue was relatively flat at $3.78 billion, which is an increase of $11 million.

Earnings in the capital markets division has dropped 35% to $305 million in the period as Scotiabank continued to face a decline in revenues from the treading operations.

Investors have kept the stock market trading restrained in the recent months as economic uncertainty wore down their confidence, which often let returns at a minimum. The economic uncertainty was particular in Europe as there are many issues surrounding respective economies that have investors worried.

This slowdown has impacted the capital markets divisions of other major Canadian banks; this includes Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and Royal Bank of Canada (RBC).

In its Canadian banking, Scotiabank has reported a 21% increase in net income to $604 million form $500 million a year ago.

The international banking division’s profits have risen by 2% to $317 million, which the stronger loonie impacting results.

Provision for credit losses were reduced to $276 million, down from $554 million form the same period last year.

Scotiabank has noted that its quarterly dividend will remain unchanged at 49 cents per common share.

Despite missing analyst estimates, there is definitely nothing wrong with the results. The results were off by 1 cent, which is nothing compared to other major banks who missed their estimates.

. Tags: analyst estimates, Bank of Montreal, capital markets division, cash earnings, credit losses, economic uncertainty, international banking, Loonie, quarter profits, quarter reports, quarterly dividend, Royal Bank of Canada, Scotiabank, stock market trading

Ontario’s Debt Reaches $212.1 billion

Sensei — Mon, 30 Aug 2010 14:15:44 +0000

Ontario’s deficit has come in substantially less than forecasted, however Ontario’s debt is now at a record $212.1 billion.

The Liberal government has racked up a deficit of $19.3 billion in 2009-2010, which is $2 billion less than forecasted in the March budget.

The issue in with this is that public accounts released show that the province’s debt has grown by #35 billion to $212.1 billion, with the increase going mainly to financing the deficit.

The deficit today is ridiculous compared to what it was in 2003-2004, which was $138.8 billion.

Despite all of this, Finance Minister Dwight Duncan has cast the lower than expected deficit figure as a positive indicator for the future.

He noted that Ontario’s deficit to GDP ratios and deficit to revenue ratios are much better than most of the western world, which is a good sign. There is an 8 year plan to balance the budget, and will put Ontario in a solid position to move forward.

The public accounts report from the Ministry of Finance said that the tax revenues were $6.4 billion below budget forecasts in 2009-2010. What this means is that the impact of the recession and a weaker than expected economic performance is now catching up with us.

The 2010 budget has a timetable to eliminate the deficit and return Ontario to balanced books by 2017-2018

Ontario’s real GDP has shrank by 3% in 2009, while the total provinces expenses for the year were $115.1 billion, which is just slightly below budget predictions.

Despite hitting a record of $212.1 billion in 2009-2010, we have to stay positive about the economy. For one, we were below expectations; being $2 billion under the expected debt level is a great thing. This means that the economy is performing a little better than we anticipated.

All we can do is look towards the future and work to bring down Ontario’ debt level.

. Tags: 1 billion, balanced books, budget forecasts, debt level, deficit figure, dwight duncan, economic performance, economy, finance minister, liberal government, ministry of finance, ratios, real gdp, recession, tax revenues, timetable, what this means

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