(Adds share prices, comment from CIBC analyst call, context)
By Nichola Saminather
TORONTO, Aug 26 (Reuters) – Toronto-Dominion Bank (TD) and Canadian Imperial Bank of Commerce (CIBC) closed out Canadian lenders’ third-quarter results reporting with better-than-expected profits on Thursday, driven mostly by releases of reserves to cover bad loans, but CIBC’s strong loan growth from a year earlier eluded TD.
CIBC’s loan balances climbed 8% as of July 31, while TD’s fell 0.5% from a year earlier, as declines in the latter’s U.S. lending offset strong loan growth in Canada. This contributed to flat revenues at TD, while CIBC’s rose 7%.
“In the U.S., relief programs for consumers and businesses have been quite significant,” Riaz Ahmed, chief financial officer at TD, Canada’s second-largest lender by market value, said in an interview. “That buildup in liquidity among customers and business owners has been quite significant and resulted in loan growth being anemic.”
U.S. loan growth is expected to pick up as liquidity shrinks, he said.
All of Canada’s biggest banks this week reported profits that beat expectations, driven by improving provisions for credit losses (PCL). Most also showed signs of recovery in lending, particularly to Canadian businesses even as mortgage growth continued, with that strength helping eclipse continued pressure on margins.
Bank of Nova Scotia, however, stuggled as its loan growth at home was eclipsed by declines in its sizeable Latin American business, although analysts were optimistic about a turnaround in coming quarters.
On Thursday, TD joined the disappointing contingent.
TD shares dropped 0.9% to C$84.88 in morning trading in Toronto, while CIBC climbed 0.5% to C$152.16, on its way to a record close. The Toronto stock benchmark slipped 0.1%.
Royal Bank of Canada, Bank of Montreal and National Bank of Canada shares also set records this week.
TD’s “loan growth remains a struggle, which does not appear to be solely a result of (the) run-off” of the United States’ pandemic-driven loan forgiveness program for businesses, Barclays Analyst John Aiken said in a note.
Continued high deposit levels could slow loan growth recoveries in some areas, some of the banks have warned. At CIBC, credit utilization rates, while improving, remain low, and although credit card purchases are rising, outstanding balances are expected to be built up much more slowly, executives said on an analyst call.
Separately CIBC said it aims to achieve net-zero greenhouse-gas emissions in its operational and financing activities by 2050, and will set interim targets to do so starting next year.
Both TD and CIBC benefited from strong growth in wealth management revenues from a year earlier, which helped drive a 13% increase in non-interest income in TD’s Canadian retail unit, and a 25% jump in CIBC’s.
For earnings details of both banks: (Reporting By Nichola Saminather; Additional reporting by Niket Nishant and Noor Zainab Hussain; Editing by Chizu Nomiyama and Jonathan Oatis)
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Ottawa still wants us to stay home. But many travellers are heading to warmer pastures anyway
For many Canadians accustomed to a life of travel, the last year and half has only made their feelings of wanderlust grow stronger.
While the delta variant has complicated plans for a post-pandemic future where it’s safe to travel without reservations, many people are still planning to head south in the coming months.
Air Canada, Air Transat and Sunwing all say the upcoming fall and winter looks promising for travel to sun destinations.
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Despite this increased demand, the federal government is still feeling uneasy about people travelling internationally.
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Can a landlord cancel a lease because of tattoos? It happened to this student
A first-year Western University student who arrived in London, Ont., from Saskatchewan says she had a rental agreement cancelled at the last minute by a landlord who said she didn’t like her tattoos.
Kadince Ball, 18, started school at Western earlier this month and secured an apartment ahead of her move. She’d already signed a lease and paid her damage deposit, but shortly after she met her landlord Esther Lee in person, Lee told her that she couldn’t move in.
“A lease was signed and because I look a certain way, I was denied tenancy,” said Ball. “None of my tattoos are offensive. They are works of art. They are somebody’s works of art on my body.”
Lee told CBC News she moved to cancel the lease because she became “scared” after seeing Ball’s tattoos. The day the two first met in person, it was hot and Ball was wearing a tank top that showed her tattoos, which include a snake wrapped around a flower on her forearm, a cherub on one shoulder and a flower on the other shoulder
“It covered almost 70 per cent of her arm,” said Lee. “That’s why I don’t want to rent it to her because it’s scary, so scary.”
Ball eventually found another apartment. She’s more concerned with her studies than pursuing legal action. But a lawyer at the Community Legal Services Clinic at Western says if she chose to bring the incident to small claims court, she likely would have a case. Read more
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The World Health Organization said earlier this week that the harmful health effects of air pollution kick in at lower levels than it previously thought.
As a result, the WHO is setting a higher bar for policymakers and the public in its first update to its air quality guidelines in 15 years.
Exposure to air pollution is estimated to cause seven million premature deaths and affect the health of millions more people each year, and air pollution “is now recognized as the single-biggest environmental threat to human health,” said Dr. Dorota Jarosinska, WHO Europe program manager for living and working environments.
Air pollution is now comparable to other global health risks such as unhealthy diets and tobacco smoking, WHO said. Read more
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Here’s how the housing landscape could change under a newly re-elected Liberal government
Ottawa looks very similar post-election, but there is optimism about affordability — if promises are kept.
Office vacancies are at a pandemic high. Blame the fourth wave
The vacancy rate rose to 15.7 per cent in the third quarter of 2021, according to CBRE Group Inc., a commercial real estate firm.
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Experts say that’s a bit of a stretch.
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