The Financial Post reports in its Saturday, Nov. 26, edition that analysts are erring on the side of caution in their earnings forecasts for the Big Six banks.
The Post's Stephanie Hughes writes that at least two analysts have revised their earnings expectations for the fourth quarter.
Canadian Imperial Bank of Commerce analyst Paul Holden and his colleagues slashed adjusted earnings estimates across the sector by about 1.5 per cent on average for the fourth quarter and by 1.6 per cent for full-year in 2023.
He said on Nov. 18, "The biggest drivers are lower capital markets revenue, less wealth management revenue and higher operating expenses." He said that the two dominant themes for the quarter would be net interest margin expansions and higher credit provisioning. "Overall, our adjusted (earnings per share) estimates imply earnings will be down two per cent (year-over-year) and (quarter-over-quarter) on average." CIBC analysts expect expanding net interest margins to remain as the banks' primary drivers, benefiting Toronto-Dominion Bank and the Royal Bank of Canada the most since they would have the best operating leverage. Most of Canada's biggest banks have seen their stock performance lag this year.
© 2023 Canjex Publishing Ltd. All rights reserved.