adplus-dvertising
Connect with us

News

Trouble in BMO’s loan book again weighs on bank’s quarterly results

Published

 on

 

TORONTO – Trouble in BMO Financial Group’s loan book has once again weighed on its quarterly results, prompting analyst worries about the bank becoming an outlier in this credit cycle.

The bank on Tuesday reported provision for credit losses amounted to $906 million for its third quarter, up from $492 million a year earlier, as it reported adjusted earnings that were down from last year.

Chief executive Darryl White said the scale of the loan loss provisions did not meet the bank’s expectations and that it expects those provisions to stay elevated in the near term.

“The combination of prolonged high interest rates, economic uncertainty and changing consumer preferences had an acute impact,” said White.

The bank emphasized that while some segments like trucking and commercial loans have been under pressure, overall, the uptick in potential losses aren’t concentrated geographically or by sector.

Instead it’s more of a broad unwinding of the unusual credit environment caused by the pandemic, where borrowers who got low interest rates and free money through government stimulus are getting hit by the higher rates and consumer pullback.

“It covers up a lot of problems which then can come back later,” said White.

While the Bank of Canada has already started reducing its benchmark interest rate and the U.S. Federal Reserve is expected to soon begin as well, it will take time for the strain to ease and some companies will struggle, he said.

“For some of those instances, it’s just too late. And what we’re seeing is therefore, you know, a faster rise with higher losses than we’ve seen.”

Chief risk officer Piyush Agrawal said the shift in provisions is difficult to predict quarter to quarter as there’s heightened unpredictability.

“These are hard to call,” he said. “You’re going through a cycle where you’ve got a company for sale with 10 bidders and all of a sudden, there’s nobody at the end, they all go away.”

The third quarter rise in provisions put the bank’s ratio of impaired loans to net loans at 0.5 per cent, up from 0.21 a year ago and up from 0.41 per cent in the second quarter.

The rise in third quarter provisions came after the bank reported an unexpected increase last quarter as well that saw its share price drop almost nine per cent on the day. On Tuesday, the bank’s shares were trading down a little over five per cent as of mid-morning on the Toronto Stock Exchange.

The second earnings miss because of credit issues prompted Jeffries analyst John Aiken to downgrade the bank on a worsened credit outlook.

“While we do expect that underlying growth will accelerate in BMO’s U.S. platforms, we no longer believe that it will be sufficient to offset the credit headwinds.”

The bank reported adjusted profits of $2.64 per diluted share in its latest quarter, down from an adjusted profit of $2.94 per diluted share in the same quarter last year.

Analysts on average had expected BMO to earn an adjusted profit of $2.76 per share for the quarter, according to to LSEG Data & Analytics.

Revenue for the quarter totalled $8.19 billion, up from $8.05 billion in the same quarter a year ago. Unadjusted profits were $1.87 billion, up from $1.57 billion last year.

While results outside the credit provisions looked better than expected, it wasn’t enough to outweigh concerns about the bank’s loan book, said Scotiabank analyst Meny Grauman in a note.

“After a big credit-focused miss in Q2, the market was laser focused on credit heading into Q3 reporting, and it is unfortunate that this is where the issues are once again,” he said.

“The bottom line is that fears that BMO is in fact the outlier of this credit cycle will continue to weigh on the shares.”

This report by The Canadian Press was first published Aug. 27, 2024.

Companies in this story: (TSX:BMO)

The Canadian Press. All rights reserved.

Source link

Continue Reading

News

Ontario’s public broadcaster under scrutiny for funding, then pulling Russian war doc

Published

 on

TORONTO – Ongoing controversy over the documentary “Russians at War” has brought scrutiny to Ontario’s public broadcaster, which has said it will not air the film it helped fund.

One media expert says TVO is getting “the worst of all worlds” by investing in a project that can no longer be shown or monetized.

“TVO created a thing which their audience doesn’t get to see, other audiences will get to see and they’ve footed the bill and gotten no reward for it,” Chris Arsenault, chair of Western University’s master of media in journalism and communication program, said in an interview.

“I can’t think of a worse outcome for a network than what’s happened.”

“Russians at War,” a film rebuked by the Ukrainian community and some Canadian politicians, was part of the Toronto International Film Festival’s lineup until organizers suspended all screenings this week due to “significant threats” to festival operations. It shows the disillusionment of some Russian soldiers on the front lines of the war in Ukraine.

TVO had planned to air the story in the coming months, but the network’s board of directors withdrew support for the film on Tuesday, citing feedback it received. The Ukrainian Canadian Congress, Ukraine’s consul-general in Toronto and others have called the film Russian propaganda and a “whitewashing” of Russian military war crimes in Ukraine – claims the film’s producers and TIFF have rejected.

The TVO board’s announcement came just days after the network defended the film as “antiwar” at its core. It was an about-face the Documentary Organization of Canada said “poses a serious threat” to media independence and raises questions about political interference.

TVO has not responded to requests for comment and board chair Chris Day declined to elaborate on the decision to pull the film.

“Suffice it to say, we heard significant concerns and we responded,” Day wrote to The Canadian Press in an emailed response to an interview request.

Arsenault, who has not seen the documentary and could not comment on its content, said he’s nevertheless worried about the spectre of board intervention in independent editorial decisions, which he said “opens the doors” to further meddling in the production of documentaries and journalism.

“Russians at War,” a Canada-France co-production, was funded in part by the Canada Media Fund, which provided $340,000 for the project through its broadcaster envelope program. A spokesperson for the fund said TVO independently chose to use that money to support the production of the documentary.

One of the film’s producers, Cornelia Principe, said that TVO also had to pay a licensing fee to air the documentary. Such fees can range from $50,000 to $100,000, she said.

Principe, who has defended the documentary and its Canadian-Russian director Anastasia Trofimova, said she was shocked by the TVO board’s decision.

“Anastasia and I have been working with TVO on this for two and a half years.… I was a little bit out of it for hours. I just couldn’t believe it.”

What happens next, she said, is “uncharted territory” for TVO.

“This has, as far as I know, never happened before,” said Principe, who has worked with the broadcaster on various documentaries over the years.

TVO’s board has said the network will be “reviewing the process by which this project was funded and our brand leveraged.”

Ontario’s Minister of Education Jill Dunlop said in a statement that the decision made by TVO’s board of directors “was the right thing to do,” but did not elaborate.

As a non-profit government agency, TVO has a mandate to distribute educational materials and programs but the ministry is not involved with its broadcasting arm due to CRTC licensing rules.

Another public broadcaster, British Columbia’s Knowledge Network, has confirmed that it made a licence fee contribution of $15,000 for “Russians at War” so that it can be a “second window” broadcaster for the film.

Asked whether the documentary will still air at some point in British Columbia, a spokesperson for the network said it’s “working on a public response.”

Finance Minister and Deputy Prime Minister Chrystia Freeland has denounced the use of public funds for “Russians at War,” saying she shares the “grave concerns” Ukrainian officials and community members in Canada have raised about the film.

The Ukrainian Canadian Congress has said it will keep protesting “Russians in War” since TIFF has said it will still screen the doc at some point. A demonstration in downtown Toronto was set to get underway Friday afternoon.

“Russians at War” is scheduled to screen at the Windsor International Film Festival, running from Oct. 24 to Nov. 3. The festival announced Friday that the documentary is among 10 nominees for its WIFF Prize in Canadian Film, worth $25,000.

— With files from Queen’s Park correspondent Allison Jones in Toronto.

This report by The Canadian Press was first published Sept. 13, 2024.



Source link

Continue Reading

News

Yearlong criminal trial of ‘Freedom Convoy’ organizers comes to an end

Published

 on

OTTAWA – After 45 days of evidence and legal arguments the criminal trial of “Freedom Convoy” organizers Tamara Lich and Chris Barber is finally at an end.

A verdict could be as much as six months away.

“I don’t know in this moment when I will be in a position to give my decision,” Justice Heather Perkins-McVey said Friday.

She said “it’s a little daunting,” given the unusually great volume of evidence and legal questions associated with the case.

Lich and Barber are co-accused of mischief, intimidation and counselling others to break the law for their role in the 2022 protest that drew thousands of demonstrators to Ottawa for three weeks.

Though the charges against the two appear straightforward, the trial has been anything but.

Originally scheduled to last just 16 days, the case has been mired in the complexity of the legal arguments, a huge body of evidence and disclosure delays that have dragged the proceedings out more than a year.

Lich, who became something of a figurehead in the protest, and Barber, one of the original organizers, drove into Ottawa together as part of a massive convoy of big rigs that parked on the streets around Parliament Hill and nearby residential areas and refused to leave until their demands were met.

The Crown and defence largely agree on what happened when the Freedom Convoy protest rolled into Ottawa to demand the federal government drop COVID-19 restrictions and vaccine mandates.

The Crown’s case included 16 witnesses who painted a picture of life in Ottawa during those tumultuous weeks in the capital. Ottawa residents, business owners, police officers and city officials described high-traffic roads blocked with big rigs, overwhelming smells from idling vehicles and open fires, shuttered stores and, above all, the overwhelming noise from the near constant honking of air horns.

Lich and Barber’s legal teams filed signed admissions to a similar effect.

The question for Perkins-McVey to answer now is whether Lich and Barber can be held responsible for what unfolded in the streets of Ottawa.

The defence has argued that the two were exercising their fundamental rights as part of a legal protest, and did not break the law themselves.

In his closing arguments, Lich’s lawyer Lawrence Greenspon said in a contest between the Charter-protected freedom of expression and Ottawa residents’ right to the enjoyment of their property, there is no contest,

The Crown argued Friday that isn’t quite right.

“No right is without limits, including the right to stand up for your beliefs,” Crown attorney Siobhain Wetscher said Friday.

The Crown asserts that the two organizers were in cahoots to put pressure on people in Ottawa and the federal government to achieve their political means.

In calling on protesters to “hold the line,” Lich and Barber “crossed the line” from peaceful protest into criminal activity, the Crown asserts.

Further complicating the case, the Crown also alleges the two worked together so closely, evidence against one of them should apply to both.

If the judge agrees with the Crown’s conspiracy allegation it would be particularly detrimental to Lich, whose social media statements during the protest were somewhat less bombastic and potentially problematic for the defence than Barber’s.

Greenspon called the Crown’s strategy unprecedented in a case where their common goal, to protest for policy change, is legal.

Though the two accused had been travelling to Ottawa to attend court over the course of the trial, they attended the final day by video conference from their homes in Alberta and Saskatchewan, respectively.

Lich smiled and waved at a dozen or so supporters from a large TV screen set up at the front of the room.

Lich and Barber’s legal fees for the prolonged trial have largely been covered by the Justice Centre for Constitutional Freedoms, though both have been fundraising throughout the trial as well.

Lich has already spent a combined 49 days in jail, first after her initial arrest during the 2022 demonstrations and again following an alleged bail breach last summer.

This report by The Canadian Press was first published Sept. 13, 2024.



Source link

Continue Reading

News

Telesat Lightspeed: Canada, Quebec give billions of dollars for satellite production

Published

 on

MONTREAL – The Canadian government has announced a loan of $2.14 billion to satellite operator Telesat, to help the company build its broadband satellite constellation.

Quebec’s government, meanwhile, announced a loan of $400 million to the company, which has contracted aerospace technology firm MDA to build its satellites in Ste-Anne-de-Bellevue, Que., in the Montreal area.

Speaking to reporters today in Ste-Anne-de-Bellevue, Prime Minister Justin Trudeau said the Telesat Lightspeed Low Earth Orbit broadband satellite constellation will enable Canadians in the most remote parts of the country to connect with cheaper, more reliable internet.

A news release from the Office of the Prime Minister says Ottawa’s loan will help create 2,000 jobs in Canada.

Quebec Premier François Legault told reporters Telesat plans to create 967 jobs in the province.

Trudeau said Ottawa-based Telesat will invest $4.4 billion back into the Canadian economy through research and development.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



Source link

Continue Reading

Trending