Company News

UPDATE 3-Canada's TD Bank results outshone by smaller rival CIBC

* TD fourth-quarter EPS C$1.36 vs forecast C$1.39

* CIBC fourth-quarter EPS C$2.81 vs forecast C$2.59

* Shares in TD drop 3.4 percent; CIBC up 2 percent (Adds shares, comment from CIBC CFO,)

TORONTO, Nov 30 (Reuters) - Toronto-Dominion Bank reported fourth-quarter results that missed expectations amid lower revenue at its investment banking business, and was outshone by smaller rival Canadian Imperial Bank of Commerce , which posted forecast-busting numbers.

Shares in TD, which have surged 13 percent in the year to date, were down 3.4 percent in morning trading, with CIBC shares up 2 percent.

“CIBC came in well ahead of expectations on the back of exceptionally strong domestic retail and a better than forecast contribution from its new U.S. platform,” said Barclays analyst John Aiken.

In contrast, Aiken said TD has “disappointed.”

“We are concerned that, with the strength of TD’s valuation over the past few months, the results today could lead to some relative weakness as expectations become reset somewhat heading into 2018,” he said.

TD, Canada’s second-biggest bank by market value, said on Thursday earnings per share, excluding one-off items, rose to C$1.36 from C$1.22 a year ago. Analysts had, on average, expected earnings of C$1.39, according to Thomson Reuters I/B/E/S data.

Net income, excluding one-off items, rose to C$2.6 billion from C$2.3 billion a year ago in the three months ended Oct. 31.

Revenue in TD’s wholesale banking division fell 6 percent to C$694 million, reflecting weaker capital market activity.


Despite that, Chief Financial Officer Riaz Ahmed viewed TD’s overall performance in the quarter as positive.

“We had a very strong third quarter and maybe coming out of that, analysts were looking at their models in a particular way but I think we had a fantastic outcome for Q4. It’s our second-best quarter ever,” he said in an interview.

CIBC reported fourth-quarter results which beat analyst expectations, helped by strong growth in its Canadian commercial banking and wealth management businesses.

Canada’s fifth-biggest lender said earnings per share, excluding one-off items, increased to C$2.81 in the quarter from C$2.60 a year ago. Analysts had, on average, forecast earnings of C$2.59, Thomson Reuters I/B/E/S data showed.

“All of our business units did well and we’re particularly pleased with the way the U.S. is performing,” Chief Financial Officer Kevin Glass said in an interview.

CIBC completed a C$5 billion acquisition of Chicago-based PrivateBancorp in June, a key acquisition which will help it diversify from its domestic market.

The purchase helped the bank’s U.S. commercial banking and wealth management business increase its net income by C$23 million to C$107 million.

Editing by Bernadette Baum