BMO ends Canadian bank results season with earnings beat, dividend boost | Canada News Media
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BMO ends Canadian bank results season with earnings beat, dividend boost

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Bank of Montreal (BMO) closed out Canadian banks’ results season with better-than-expected fourth-quarter earnings on Friday, and announced the industry’s biggest dividend increases and share buyback.

Canada‘s fourth-largest lender said adjusted profit rose 38%from a year earlier, beating estimates on lower-than-expected loan-loss provisions and expenses, with higher income from a year ago in all its major businesses offering a boost. It said it would increase its dividend by 25% to C$1.33 and would buy back up to 22.5 million, or 3.5%, of outstanding shares.

Canada‘s Big Six lenders on average this week raised their dividends by 15% and announced plans to repurchase up to 160 million shares, equivalent to 2.7% of outstanding stock after the country’s financial regulator lifted a nearly two-year moratorium.

Banks’ results have been a mixed bag, with Bank of Nova Scotia, Toronto-Dominion Bank and BMO beating expectations, while Royal Bank of Canada, Canadian Imperial Bank of Commerce and National Bank of Canada missed.

All were buffeted by rising expenses, margin pressures and lackluster trading revenues, but some managed to eke out better-than-expected net interest income growth while benefiting from industry-wide increases in fee revenues.

The industry’s costs for performance-based compensation for fiscal 2021, which ended Oct. 31, jumped 18%, a significant increase from previous years, driven by strong growth in capital markets and wealth management businesses.

BMO shares jumped 2.5% in morning trading in Toronto, compared with a 0.8% decline in the Toronto Stock Exchange’s S&P/TSX composite index. The banking subindex is up 0.3% since the earnings season began, beating a 2.65% decline in the broader benchmark.

Many of the Canadian banks’ chief executive officers sounded optimistic notes for fiscal 2022 earnings growth, particularly on the boon to struggling margins offered by expected interest rate increases. But they also expressed caution about the uncertainties presented by the emergence of new COVID-19 variants, and supply and labor shortages.

BMO is “closely monitoring” inflation and interest rate drivers, including supply and labor shortages and energy prices, BMO CEO Darryl White said on a call with analysts.

For fiscal 2022, BMO expects a mid-single-digit increase in adjusted pre-provision, pre-tax earnings, which rose 12% on a year-on-year basis, executives said. They added that results would benefit from loan growth in the high single digits, excluding the impact of the U.S. Paycheck Protection Program, which was a U.S. government loan program to help businesses during the COVID-19 pandemic.

BMO expects its net interest margin excluding trading, which fell slightly to 1.66% from the prior quarter, to remain stable in fiscal 2022, and increase if interest rates rise faster than expected. It expects costs to remain flat.

BMO recovered loan-loss provisions of C$126 million ($98.19 million) in the three months ended Oct. 31.

($1 = 1.2832 Canadian dollars)

(Reporting By Mehnaz Yasmin in Bengaluru and Nichola Saminather in Toronto; Editing by Shailesh Kuber, Carmel Crimmins, Susan Fenton and Paul Simao)

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Carry On Canadian Business. Carry On!

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8 hours ago

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October 22, 2024

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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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October 22, 2024

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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October 22, 2024

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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