>I don't understand the numbers ...
robert.
the following reuters piece may (or may not) help. frankly, i'm not a shareholder, so i haven't made the time delve into the earnings; i'm just particularly keen on the IPO.
-chris.
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Two Canadian banks report differing earnings
May 20, 1999 08:42 PM
By Scott Anderson
TORONTO, May 20 (Reuters) - Two of Canada's biggest banks kicked off the second-quarter earnings parade on Thursday with one bank taking two steps forward and the other taking one step back.
While Toronto-Dominion Bank (CA:TD TD) reported record second-quarter earnings which included its earnings per share topping analyst expectations, Royal Bank of Canada (CA:RY RY) saw its net income slip by eight percent for the quarter.
Toronto-Dominion, Canada's fifth-largest bank by assets, began the earnings rush early this morning reporting record second-quarter earnings buoyed by solid growth in its discount brokerage and mutual fund groups.
TD reported earnings of C$348 million, or C$1.14 a share, for the quarter ended April 30, up from C$307 million, or C$1.00 for the same period a year earlier.
The per share results of C$1.14 a share topped analyst expectations. Five analysts polled by investment research network First Call on average estimated the bank would record earnings per share of C$1.06.
The bank said return on common equity was 17.6 percent for the quarter compared with 17.3 percent for the same period a year ago.
"Things were working across a wide spectrum of businesses in the bank," Dan Marinangeli, senior vice-president, group finance at TD, told Reuters. "We had solid retail results. I wouldn't say spectacular, but they were solid."
TD realized the largest gain in its wealth management services area which includes its discount brokerage and mutual fund divisions. The group saw earnings rise approximately 100 percent to C$94 million.
TD experienced a small setback in its fight for market share in the highly lucrative global discount brokerage business, with its Waterhouse Securities slipping one notch to number 3 behind leader Charles Schwab Corp. (SCH) and second-place E*TRADE.
Last month, TD unveiled plans to sell 10 percent of its global discount brokerage, which includes U.S.-based Waterhouse Investor Services and Green Line Investor Service, in an initial public offering valued at more than C$1 billion.
TD's record earnings were in contrast to the eight-percent dip Royal experienced. Royal Bank of Canada, the country's second largest bank in assets, reported a drop in its second-quarter earnings brought on by a decline in earnings in the capital markets and a dip in profits at its business banking division.
Royal said profits for the period ended April 30 were C$432 million, or C$1.28 a share, compared with C$468 million, or C$1.36 a share in the same period of 1998. Under U.S. generally accepted accounting principles, which the bank said it had now adopted, earnings were C$1.25 a share after C$1.38 in the same period a year earlier.
The earnings of C$1.25 per share matched expectations of five analysts polled by First Call.
However, net income slipped in the quarter by 8 percent to C$432 million as expense growth exceeded revenue growth.
Royal's dip was not unexpected by analysts, however.
"It (Royal's earnings) was in line with expectations and they know they've got to do better controlling expenses in the future," said Mike Ancell, a bank analyst at Edward Jones, in St. Louis.
The bank said return on common equity was 15.8 percent compared with 19.5 percent for the same period a year earlier. It also said it will raise its quarterly dividend by 2 Canadian cents to 48 Canadian cents.
No announcement on common share dividends was made by the Toronto-Dominion Bank in its second-quarter earnings report.
Royal said it plans to purchase up 3.5 percent of the public float of its common shares. The bank has a public float of approximately 312 million shares.
Analysts say the earnings from two of the Big Six banks on Thursday may have set the tone for the other four expected out in the next two weeks.
"I think the banks are going to come in respectably. I'm not expecting any surprises from the others," said Maria Berlettano, bank analyst at Levesque Beaubien Geoffrion, in Toronto.
($1=$1.47 Canadian) |
