(July 26 – 11:40 ET) – U.S. bank and broker results for the second quarter confirm suspicions of a slowdown also faced by Canadian banks, says Merrill Lynch.
Merrill notes that U.S. banks have been trading flat over the past week or so as they’ve turned in their results, indicating lower market activity in the second quarter. There’s also uncertainty over the Fed’s next move.
Although results from the U.S. financial institutions confirm the slowdown story, it wasn’t quite as abrupt as some had feared and M&A activity was up. However, discount brokers though saw their trading commissions drop 30% to 40%. Merrill says the same picture can be expected to emerge at the Canadian banks.
Bank of Montreal’s Harris Bank subsidiary has already reported a 7.5% increase in net income from the second-quarter of 1999, and a 5.1% rise from the first quarter of this year. Merrill notes however that margin pressure is evident at Harris and that trading and securities gains supported the revenue picture. BMO also launched The Halyard Capital Fund to build its merchant and investment banking business in the U.S. The US$450 million fund will invest in emerging, high growth new media and Internet companies.
-IE Staff