Despite expectations for a more subdued quarter, Canada’s Big 6 Banks pulled off another impressive earnings season. And while many were expecting a slowdown in the housing market, most banks’ mortgage portfolios showed resilience.
The tidbits that follow come from the
Big 6 Banks’ quarterly earnings reports, presentations and conference
calls. There’s some good stuff in there (CIBC’s discussion of how it deals with price-sensitive mortgage customers is particularly interesting.)
If you’re time-pressed, the focal points are highlighted.
If there’s one recurring mortgage theme from the Big 6 banks’ recent earnings announcements, it is “stress testing.” That’s where a bank simulates extremely adverse economic scenarios in a statistical model and then watches how its mortgages perform.
Stress testing has been a buzzword of late. Banks have been talking up their stress tests to show investors that things will remain under control if the floor drops out in the housing market.
Among other trends this quarter:
- Homeowners are increasingly renewing into fixed rate mortgages, which are more profitable for the banks
- Most banks are posting decreases in their insured mortgage portfolios (not surprising given last year’s insured mortgage rule tightening)
These and other observations can be found in the compilation that follows. It’s the
fruit of pouring through quarterly earnings reports, presentations and
conference calls. If you’re time-pressed, some of the focal points
are highlighted, with our comments in italics.
Mortgages are being credited for helping propel Canada’s Big 6 banks to another blockbuster quarter, which saw a combined $7.6-billion+ in net profits.
Among the nuggets of information found within the banks’ first-quarter reports:
- Details from BMO about the success of its 2.99% rate promotions
- Geographic breakdowns of mortgage originations, including details about government insured and uninsured exposures.
- Further details from CIBC about the continued impact of its wind-down of FirstLine and its efforts to hang onto mortgage customers.
The compilation that follows is the fruit of pouring through quarterly earnings reports, presentations and
conference calls. If you’re time-pressed, some of the focal points are highlighted.
It’s another fiscal year come and gone at the Big 6
Their latest round of earnings announcements were brimming with mortgage factoids. Much of it reflected recurring themes, like:
- Projected mortgage volume declines (thanks partly to the government’s latest mortgage rule changes)
- Heavy uptake of fixed-rate mortgages
- Margin pressures, especially in the deposit market (which funds a lot of mortgages)
There were also more details from CIBC about the continued impact of its wind-down of FirstLine and its efforts to hang onto mortgage customers.
The compilation of tidbits below comes from pouring through the banks’ quarterly and annual earnings reports, presentations and conference calls. If you’re time-pressed, the focal points are highlighted.
Some of the Big 6 Banks posted surprising mortgage growth in the third quarter (Q3). That contributed to record profits in the cases of Royal Bank, Scotiabank and TD.
It also helped the five biggest banks boost shareholder dividends.
But with a laundry list of new mortgage restrictions kicking in, many question whether coming quarters will be as prosperous. For insights along these lines, we turned straight to the horses’ mouths (i.e., we poured through their Q3 bank reports and conference calls).
We compiled all the findings into the below summary of notable mortgage tidbits. If you’re really time-pressed, the focal points are highlighted.
Margin pressure, modest loan growth, tighter underwriting and low defaults.
Those were recurring themes during the second quarter for most big banks.
Net interest margin deteriorated at four of the Big 6, while sequential loan growth rose for all of the majors…except CIBC.
As is the case every quarter, we’ve painstakingly scanned Q2 bank reports and conference calls for anything notable and mortgage-related. Focal points are highlighted and our comments are in italics.
The fourth quarter earnings season brought good tidings to certain banks, including TD and RBC who saw profits double.
In the Big 6 banks’ lending segments, however, many continued to report declining loan margins as Canada’s low rate environment persists.
Below are various mortgage tidbits that we pulled from the major banks’ Q4 reports:
Third quarter earnings season is over for the Big 6 banks. As always, we’ve poured through their piles of releases, shareholder presentations and earnings call transcripts to find interesting mortgage-related nuggets.
Here’s a summary…
Mortgages are profit machines for Canada’s banks, most of which posted healthy loan growth in 2010.
Below we look at the mortgage performance of the top seven banks. Before we do that, however, there were some key bank trends to note in 2010:
- Banks significantly padded their ranks of mortgage specialists. (Which partly explains broker market share losses this year.)
- Rate competition intensified from branches and mobile sales forces.
- With credit markets stabilizing, many banks cut back on their mortgage securitization compared to 2009.
Here are summaries of each bank’s mortgage performance based on their latest earnings reports. (Our comments in italics.)