CAD banks still look strong - profit up, revenue up, provisions down - BMO

Discussion in 'Stocks' started by Kassz007, Nov 24, 2009.

  1. I would expect similar Q4 results from RBC - increased revenue, increased profit, loan losses still there but decreasing.

    Rumours swirling of RBC increasing their dividend, but not likely until next quarter at the earliest. Even so, once one of them increase the dividend, the rest are likely to follow suit.

    At the very least, I see these banks as a low risk of capital loss and a stable (if not increasing) dividend. Solid investments right now, no question.
  2. nebulous


    fwiw BMO has had a big institutional seller for the last while
  3. jazzsax


    CIBC is the big concern as always, though their last quarter, excluding loan reserves was pretty solid.

    COnsidering how many bad quarters with reserves they had, they are only about 10% off of where they were about a year and a half ago. Good solid dividend though.

    If you're interested in dividend income and could care less about the stock price moving, pickup any of the Big 5's preferred's, which at issue were yielding around 6.6% (right now it's closer to 5%,)
  4. Good point KASSZ007.
  5. Kaz, whats your view on Sprott and his managers... they want nothing to do with Canadian or US Banks...

    If I recall correctly, he mentioned a $50 billion payment (keep reading, it was actually much higher) to Canadian banks from the Canadian Gov't during the Credit crisis, which other than Sprott, no one has reported on it... Dont Bank on the Banks.pdf


    Acknowledging the leverage levels above, you may wonder how the Canadian banks escaped the 2008 meltdown unscathed. The answer is that they received significant assistance from the Canadian government. First, they received $65 billion in liquidity injections from the Insured
    Mortgage Purchase Program (IMPP), whereby Canada Mortgage and Housing (CMHC) purchased insured mortgages from Canadian banks to provide additional liquidity on the asset side of their balance sheets.7 Next, the Bank of Canada provided them with an additional $45 billion in temporary liquidity facilities. Finally, a Canadian Bank (that shall remain nameless) also received assistance
    from the Canada Pension Plan (CPP) through the purchase of $4 billion in mortgages prior to the IMPP program, for a total government expenditure of $114 billion.8 For reference, the entire tangible common equity of the Canadian Banks in 2008 was $68 billion.
    #10     Dec 3, 2009