TORONTO—Canada’s five largest banks have all announced dividend increases as they continue to show they’re among the soundest in the world amid trouble elsewhere. Royal Bank, the country’s biggest lender, said profit for the period ended July 31 rose 73 per cent to a record C$2.24 billion (US$2.26 billion). Royal Bank said it earned C$1.31 a share excluding items, beating the C$1.18-a-share average estimate of 15 analysts surveyed by Bloomberg News. Toronto-Dominion , while CIBC, the fifth-biggest bank, Toronto-Dominion, the second-biggest bank, said its net income climbed 14 per cent to C$1.7 billion, or C$1.78 a share and it reported adjusted profit of C$1.91 a share, topping the C$1.83-a-share estimate. CIBC, Canada’s fifth-largest bank, said its profit rose 42 per cent to C$841 million, with adjusted earnings of C$2.06 a share, beating the C$1.96-a-share average estimate.
On Tuesday, the Bank of Nova Scotia announced it was raising dividends by 3.6 per cent, to 57 cents per share. That followed news that the bank had made a C$2.05 billion profit. Scotiabank also announced a major acquisition by agreeing to buy ING Bank of Canada from its Dutch parent for $3.1 billion, furthering the concentration of a banking system that is dominated by the five major banks. Royal Bank unexpectedly raised its dividend 5.3 per cent to 60 cents a share, after raising the payout in March. Toronto- Dominion raised its payout 5.4 per cent to 77 cents a share, and raised its payout range to between 40 per cent and 50 per cent of earnings, up from 35 per cent to 45 per cent. CIBC increased its payout for the first time in a year, to 94 cents.
The three Toronto-based lenders join Bank of Montreal (BMO) and Bank of Nova Scotia (BNS) in raising dividends this week as gains in consumer lending and higher trading revenue helped the world’s soundest banks report earnings that topped estimates. The banks raised their payouts while forecasting that loan and revenue growth may slow in the next few quarters as the housing market cools and tapped-out consumers with record debt levels borrow less. “Investors definitely feel there’s more of a value being placed on dividend yield in this low interest-rate environment,” Colleen Johnston, chief financial officer of Toronto-Dominion, said today in a phone interview. “We’re seeing good loan growth and deposit growth—it’s slowing down a little bit, which is very much expected given the environment.” Royal, Scotiabank and CIBC all have significant operations throughout the Caribbean. (AP)