(July 19 – 08:55 ET) – Merrill Lynch analysts see weaker markets and productive innovation at Canadian banks.
Merrill says that the results of U.S. banks, such as J.P. Morgan, Bank of America and Fleet, have indicated that banks are feeling the effects of a second quarter slowdown in capital markets. The banks with the greatest market exposure have taken the biggest hits. Despite the market weakness, most of the banks have managed strong earnings and credit quality is relatively strong.
Other noteworthy developments in the Canadian banking business include the partnership of CheckFree and 724 Solutions to allow wireless bill payment. Merrill says the two firms have leading-edge technology in a business that is expected to be very competitive in Canada. “The convenience of wireless bill presentment and payment may become more compelling than the PC,” it argues.
It also likes what it has seen from TD Bank recently with TD Waterhouse opening shop in Japan in partnership with the Bank of Tokyo-Mitsubishi Ltd. It calls this “a key strategic advantage” for TWE. TD also launched TD MarketSite, its B2B portal with Commerce One. Merrill says, “We were impressed with the portal’s expense savings potential”, noting that TD is on track to reduce its own procurement expenses by $60 million to $100 million.
-IE Staff