Canadian banks continue to be in the spotlight today with earnings from the remaining three big banks out this morning. Higher interest rates helped boost the bottom line at TD Bank with adjusted net income of $4.07 billion in the fourth quarter, or $2.18 per share, topping expectations by 12 cents. Like its peers, it is setting aside an increased amount in loan loss provisions to prepare for potential losses as concerns about an economic downturn grow.

CIBC MISSES ANALYST EXPECTATIONS

CIBC has announced adjusted net income of $1.31-billion in its fiscal fourth quarter, down 17 per cent from the same period a year ago. The bank’s adjusted diluted earnings per share came in at $1.39, and the average analyst consensus was $1.72 per share. The lender also reported it set aside $436 million in provisions for credit losses in the fourth quarter, up $358 million from the same period a year ago due to an unfavourable change it its economic outlook. While the bank missed The Street’s expectations, it is increasing its quarterly dividend by two cents to 85 cents per share. CIBC shares are down about 10 per cent year to date.

A MISS AT BMO AS WELL

Bank of Montreal has also missed analyst expectations in the fourth quarter. BMO reported an adjusted profit of $2.14 billion, and adjusted earnings per share of $3.04 per share, while the average analyst consensus was for $3.07 per share. The lender reported an increase in provisions for credit losses it set aside $226 million to cover potential losses, versus a recovery from loan-loss reserves a year earlier, as economic uncertainty looms. BMO also said profit in its BMO Capital Markets division fell 33 per cent to $357 million in the quarter.

U.S. FUTURES FLAT AFTER RALLY

U.S. futures are pointing to a flat open after ending the day significantly higher on Wednesday after Federal Reserve Chair Jerome Powell indicated the American central bank is ready to scale back the pace of its interest rate increases as early as this month. It is now widely expected the Fed will move forward with a 50 basis-point rate hike following four straight 75 basis-point increases. Investors will be closely watching the personal consumption data coming out at 8:30 a.m. EST, which may show momentum that is more inflationary and reinforce the fact that even as Powell is ready to downshift the pace of rate hikes, a pause in the tightening cycle isn’t forthcoming.

OTHER NOTABLE STORIES

  • After markets closed on Wednesday Ontario’s finance minister named Kevan Cowan chairman of the Ontario Securities Commission. He replaces Heather Zordel, who left suddenly in October after less than a year in the role.
  • Ottawa has given the green light for an expansion of TC Energy’s NOVA Gas Transmission pipeline project in Alberta, which is aimed at improving access for Canadian natural gas. The approval comes with 34 binding conditions related to environmental protections and the involvement of Indigenous people
  • Dollar General shares are lower in the pre-market after the discount retailer cut its 2022 earnings forecast due to challenges finding available warehouse space
  • Shares of Kroger are higher ahead of the opening bell after the company topped earnings expectations and raised its full-year forecast
  • Shares of Salesforce are down more than 6 per cent in the pre-market trade after the company’s forecast trailed analyst expectations. The cloud-based software firm also announced a leadership change with co-CEO Bret Taylor stepping down at the end of January after a year on the job and leaving founder Marc Benioff as the sole leader.