(May 15 – 11:45ET) – With a few financial giants reporting second-quarter earnings later this week, Merrill Lynch Canada Inc. is prepping investors for strong results.
Both TD Bank and Royal Bank are slated to report on May 18, with TD’s discount subsidiary TD Waterhouse Group Inc. reporting a day earlier. Merrill is predicting 20% earnings growth at the firms.
Merrill suggests that TD could beat the street easily on the back of strong earnings at Waterhouse. It expects a 33% EPS improvement at Waterhouse, with a 122% increase in trading volumes in the quarter. TD’s bottom line will come in negative, however, once it accounts for an 85¢-per-share integration charge for its work digesting CT Financial. After the charge, Merrill expects to see a 5¢-per-share loss at TD.
Royal’s results will also be boosted by strong second-quarter capital markets activity, Merrill predicts. Both market-related fees and trading revenue are expected to pop impressively, pushing return on equity up to 18.5% on the quarter.
The other banks will be reporting later in the month.
-IE Staff