The Globe and Mail reports in its Wednesday, Dec. 12, edition that despite a lukewarm reaction from the Street, Desjardins Securities analyst Doug Young says the fourth quarter was "good" for Canadian banks. The Globe's David Leeder writes in the Eye On Equities column that Mr. Young says in a note: "Cash EPS increased 11 per cent year-over-year on average versus our 9-per-cent estimate (consensus 10 per cent). Organic loan growth has slowed; however, this was offset by good expense trends, benign credit conditions, increases in NIMs on the back of central bank rate hikes and a pickup (albeit marginal) in stock buyback activity. Furthermore, CET1 ratios remain at comfortable levels, with cushions to withstand changes coming in 1Q FY19 in relation to counterparty credit RWA. However, the market doesn't care. ... We are arguably closer to the tail end of an economic cycle, and after years of benign credit trends, losses could start to gravitate higher -- and as this occurs, we could see more PCL volatility under IFRS 9." Mr. Young rates Bank of Nova Scotia "buy." He lowered his share target to $83 from $85. Analysts on average target the shares at $82.38.
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