TD, CIBC results beat expectations with higher profits

The parade of Canadian banks reporting solid earnings continued Thursday as TD Bank and CIBC both posted third-quarter earnings that topped the average expectations of analysts.

TD said its overall profit for the quarter hit $2.36 billion, a rise of four per cent year over year, thanks to good results from its U.S retail banking division.

In the same quarter of last year, TD made $2.27 billion.

After adjustments, TD said it made $2.42 billion, or $1.27 a share, up from $2.29 billion, or $1.20 a share, a year earlier.

According to Thomson Reuters I/B/E/S, analysts on average had expected earnings of $1.21 per share for TD in the most recent quarter.

Meanwhile, CIBC said the sale of its minority stake in American Century Investments boosted its third-quarter earnings to $1.44 billion, or $3.61 a share. A year ago, the bank made $978 million, or $2.42 a share.

Even without the gain on the American Century sale, CIBC said it made $1.07 billion in profit.

Excluding adjustments and one-time items, CIBC reported a nine per cent increase in earnings per share, to $2.67 per share. Analysts had expected, on average, that the bank's adjusted earnings per share would come in at $2.35 per share, according to Thomson Reuters I/B/E/S.

One market watcher agrees the banks have prevailed in areas where trouble might have been expected.

"Everybody was very worried that the banks would have to take major loan losses on their exposure in Alberta, both on loans directly to energy related companies but also to people who live in Alberta who've lost their jobs or who can't keep up their mortgages because they've lost their jobs," David Baskin, the president of Baskin Wealth Management, told CBC News. "So far that hasn't turned out to be the case."

None of the banks have reported any difficulties in their mortgages portfolios, despite very frothy conditions in some Canadian real estate markets.

"The banks have taken loan loss provisions, but they're certainly not out of the ordinary and not enough to impact on their profits in a serious way," Baskin said.

Shares of TD dipped six cents to end at $57.50 on the TSX, while CIBC gained $1.28 to close at $103.28.