Despite mixed Q3 earnings, portfolio manager Ross Healy remains positive about Canada's top banks
Ross Healy, chairperson of Strategic Analysis Corporation and portfolio manager at MacNicol & Associates Asset Management, has expressed a positive outlook for Canada's six largest banks following their latest earnings reports, as reported by BNN Bloomberg.
On Thursday, the Canadian Imperial Bank of Commerce (CIBC) was the last of the Big Six banks to report third-quarter earnings. CIBC, Royal Bank of Canada (RBC), National Bank of Canada, and Bank of Nova Scotia all surpassed analyst estimates.
However, Bank of Montreal (BMO) and Toronto-Dominion Bank (TD) did not meet expectations.
Healy commented on the sector's future performance, noting that despite BMO having challenges ahead, Scotiabank is rethinking its strategy. “Yes, its numbers weren’t great, but they beat expectations. So, I think that’s a nice cheap bank with a nice dividend, which should do well,” Healy said.
Regarding TD Bank's issues with money laundering investigations by US regulators, Healy stated that these issues would not deter him from holding the stock.
“They didn’t scare the market away either. When it all got announced, it [TD shares] sort of blipped down a little bit, but it came back nicely. And the stock is towards the lower end of its normal range,” he said.
Healy also observed that CIBC appears to be “catching up to its long-term potential,” while National Bank and RBC are “two very, very well-managed, profitable banks.”
After the Big Six released their earnings, Bloomberg News reported that CIBC and RBC are seeing improving credit trends. However, BMO faced multiple downgrades from analysts due to concerns about its commercial loan book after missing estimates.
