(May 18 – 10:50 ET) – Strong earnings from TD Bank and Royal Bank today will herald a strong second quarter for all the banks, says First Call Corp.
Canadian bank analysts are looking for 19% year over year earnings growth. They have been raising their numbers for all the major Canadian banks except for Canadian Western, says First Call. Analysts are looking for double-digit gains from every bank except National Bank.
Bank of Montreal will be reporting its earnings next week and is expected to show 14% growth. Bank of Nova Scotia, Laurentian Bank, and Canadian Imperial Bank of Commerce will be reporting the week after.
For the year analysts are now calling for 17% year-over-year growth, up from an earlier estimate of 16%. In 2001, growth is expected to slow to 11%. Nevertheless First Call says, “Corporate earnings growth for the TSE 35 is outpacing U.S. corporate earnings for the second consecutive quarter. Based on those companies that that have reported so far, first quarter 2000 earnings for the S&P 500 are up 23.6% while earnings for the TSE 35 are expected to be up a very robust 51%.”
“The outlook for the rest of the year appears to be quite good. The Canadian economy continues to chug along at a robust pace.” The only major risk for the banks will be increasing interest rates, says First Call.