The Globe and Mail reports in its Tuesday, May 23, edition that analysts are relatively upbeat
about the second quarter for Canada's big six banks. The Globe's David Berman writes that for one thing,
analysts expect that Bank of Montreal
and National Bank of Canada will
hike their dividends. For another,
profits should rise solidly over
last year's results. Darko Mihelic,
an analyst at RBC Dominion
Securities, expects profit will rise
by an average of 6 per cent over
the same period last year. Robert
Sedran, an analyst at CIBC World
Markets, expects profit will rise by
an average of 8 per cent. Gabriel
Dechaine, an analyst at National
Bank Financial, expects profit
growth of 14 per cent.
The results should reflect a trio
of improvements. Mr. Berman says banks stand to
benefit from recent cost-cutting
measures, margins on U.S. loans
should expand with the two
recent interest-rate hikes by the
U.S. Federal Reserve and credit
conditions have been improving
with the rebound in the price of
crude oil since early last year.
These improvements should
offset slower capital markets activity
since last quarter, with debt
and equity issuance volumes
down, according to a report from
RBC.
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