Big Six banks grow inside and outside Canada in Q1 2016

International business helps Canada's Big Six banks in the first quarter of 2016 amid an energy headwind.

Dan Werner 7 March, 2016 | 6:00PM
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Dan Werner: Generally, the Canadian banks had a pretty good first quarter. Canadian personal/commercial banking showed solid organic growth for all the banks. The international businesses, both in Latin America for Scotia as well as the U.S. businesses for TD and BMO, did very well, especially for BMO because of the GE Finance acquisition. But what was a tailwind a year ago in capital markets has become a headwind, as most of the energy exposures that these banks have are generally located in the capital markets segment. We're seeing much higher provisions and increasing gross impaired loans, and I think we're going to still see headwinds for much of the rest of this year and probably into next year for most of these banks. Will it impair their overall earnings? Possibly, but I think it depends upon how much gross impaired gets added on between now and then.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bank of Montreal127.85 CAD-0.74Rating
Bank of Nova Scotia78.19 CAD-0.41Rating
Canadian Imperial Bank of Commerce145.99 CAD-1.39Rating
General Electric Co100.47 USD-0.86Rating
National Bank of Canada97.98 CAD-0.56Rating
Royal Bank of Canada127.66 CAD-1.47Rating
The Toronto-Dominion Bank82.48 CAD-0.55Rating

About Author

Dan Werner

Dan Werner  Dan Werner is a senior equity analyst for Morningstar.

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