TD.TO - The Toronto-Dominion Bank

Toronto - Toronto Delayed Price. Currency in CAD
75.98
+0.38 (+0.50%)
At close: 4:17PM EST
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Previous Close75.60
Open75.67
Bid75.97 x 0
Ask75.98 x 0
Day's Range75.56 - 76.10
52 Week Range71.22 - 77.96
Volume2,936,742
Avg. Volume3,254,408
Market Cap137.725B
Beta (5Y Monthly)0.91
PE Ratio (TTM)12.16
EPS (TTM)6.25
Earnings DateFeb. 26, 2020
Forward Dividend & Yield2.96 (3.92%)
Ex-Dividend DateJan. 08, 2020
1y Target Est78.79
  • Gold Just Hit a Seven-Year High on Virus Fears
    Bloomberg

    Gold Just Hit a Seven-Year High on Virus Fears

    (Bloomberg) -- Gold reached a seven-year high as concern over the economic impact of the coronavirus boosted demand for haven assets and fueled speculation that the Federal Reserve will ease monetary policy before year-end.Prices extended gains above $1,600 an ounce to the highest since February 2013. Copper headed for a third straight decline, while the dollar strengthened and U.S. equities fell after a jump in confirmed infections in South Korea and Japan.Bullion has climbed almost 7% this year amid mounting concern over the economic impact of the virus. While minutes from the Fed’s last meeting indicated the central bank could leave rates unchanged for many months, futures traders maintained expectations for at least one cut over 2020. Low rates are a boon for gold, which doesn’t offer interest.“The minutes suggest that the bar to ease policy is clearly lower than to lift rates,” Colin Hamilton, an analyst at BMO Capital Markets, said in an emailed note Thursday. “In particular, they back up Powell’s recent comment that policymakers would not tolerate continued below-target inflation. This commentary was viewed as supportive gold.”Read more: Doubts Re-Emerge Over China Data; Cases Top 75,700: Virus UpdateSpot gold advanced for a third straight day, rising as much as 0.7% to $1,623.73 an ounce. Holdings in global exchange-traded funds backed by bullion have risen to a fresh record, and are on course for a sixth weekly expansion, the longest streak since November. Futures settled 0.5% higher at 1:30 p.m. on the Comex in New York.“It looks like a self-fulfilling prophecy,” said ABN Amro Bank NV strategist Georgette Boele. As prices broke out, the move has attracted more investors into gold, she said.Gold could reach $1,650 over the coming weeks, according to UBS Group AG’s Global Wealth Management unit.“With U.S. equity valuations elevated, any further upsets could see another bout of volatility, a further rally in government bonds and a higher gold price,” analysts Wayne Gordon and Giovanni Staunovo said in a note.Copper prices, meanwhile, fell 0.7% in London and closed at the lowest level in almost two weeks, and zinc hit the lowest level since July 2016. Chinese officials again changed the way the nation officially reports the number of infections and asked firms not to resume work before March 11. That caused fresh worries alongside new fatalities outside of China, weakening demand for industrial metals.“Hubei’s announcement that firms will remain closed until March 10th is reviving concerns that the follow-through impact may be more prolonged than anticipated,” TD Bank analysts including Bart Melek said in a note to clients.‘What Goes Up’In other precious metals, silver, platinum and palladium declined in the spot market. All four major precious metals have risen this week.Palladium, used in vehicle pollution-control devices, has been supported by concerns over a widening global deficit, and a pledge by the Chinese government to stabilize car demand.Spot palladium has risen about 39% this year. The gains have still been eclipsed by those of rhodium, a less-liquid precious metal from the same group that expanded its year-to-date advance on Thursday to 110%.Read more: Why Palladium Is Suddenly a More Precious MetalBoth rhodium and palladium are advancing on tight supplies and as demand from the car industry remains strong, Anglo American Plc said Thursday.Still, the coronavirus is threatening Chinese auto sales with factories across the nation suspended and the global supply chain disrupted. That means prices have room to retreat in the short-term, Anglo’s Chief Executive Officer Mark Cutifani told investors.“What goes up quickly can come down twice as quick,” he said.\--With assistance from Martin Ritchie.To contact the reporters on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.net;Elena Mazneva in London at emazneva@bloomberg.net;Justina Vasquez in New York at jvasquez57@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Pratish Narayanan, Luzi Ann JavierFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S. Dollar Nears a Critical Level That May Trigger a  Buying Spree
    Bloomberg

    U.S. Dollar Nears a Critical Level That May Trigger a  Buying Spree

    (Bloomberg) -- The spread of the coronavirus has suddenly sparked foreign-exchange traders into action.The dollar is emerging as the winner, heading toward a key psychological threshold that could supercharge a rally few saw coming at the start of the year. At the other end of the spectrum is the yen, which suffered its biggest two-day loss since 2017 after the threat of a Japanese recession sent hedge-fund buyers fleeing.The moves spurred gauges of volatility, which had been lying dormant near record lows in recent months.What’s going on in currency markets is “mad, bad and very ugly,” said London-based Kit Juckes, a strategist at Societe Generale SA. “It looks like huge capitulation by almost anyone who isn’t a dollar bull.”The greenback is outperforming virtually everything so far this year, confounding expectations that it would weaken following a trade deal between Washington and Beijing. The U.S. dollar index -- a widely-watched gauge of the currency versus its major peers -- has surged this week toward 100, which hasn’t been breached in nearly three years.It’s the level that capped the dollar twice in 2015 and effectively offered support during the first quarter of 2017 before finally giving in, heralding the greenback’s sharp decline that followed.“The 100 level is a big deal,” said Neil Jones, head of foreign-exchange sales to financial institutions at Mizuho Bank Ltd. “A number of buy signals will kick into play, it will set the alarm bells off.”There’s more good news for dollar bulls. The index’s moving averages are close to forming a so-called golden cross, when its 50-day measure rises above its 200-day equivalent. It would be the first time since 2018 and a sign to some traders of more gains to come. The pattern formed 13 times since the turn of the century, heralding average gains of about 2.5% in 40 days.Topsy TurvyWhile the dollar revels in its traditional role as a haven, the ferocity of the moves have turned other well-known paradigms on their head.The yen, which has long served as safe harbor from threats ranging from the Greek crisis to the U.S.-China trade war, has suddenly found its power drained. The coronavirus threatens to further weigh on a struggling economy, which analysts forecast will shrink an annualized 0.25% this quarter following a 6.3% contraction in the previous three months. Some options traders are betting the currency will weaken to 120 per dollar, from 111.96 currently.“A sharp slowing in tourism from China will have an important negative effect on the Japanese balance of payments,” said George Saravelos, a strategist at Deutsche Bank AG, which recommends investors stay long the dollar. “This is idiosyncratically negative for the yen, which no longer runs a goods surplus.”Market MovesWhile only the Swiss franc could match the greenback among major currencies on Thursday, rising to the highest level versus the euro in nearly five years, other haven assets also rallied, including U.S. Treasuries and gold, which touched the highest since 2013.Elsewhere, the pound slumped to lows last seen in November despite strong U.K. economic data, and emerging markets were not spared, with the won among the biggest losers after South Korea reported its first coronavirus fatality.Other Asian currencies slumped as contagion fears continued. The Singapore dollar slid to the lowest in almost three years on Thursday. The yuan retreated and the Australian dollar, which is seen as a proxy to the Chinese currency, slid to an 11-year low.“The emotional see-saw continues,” said Mark McCormick, global head of FX strategy at TD Securities.\--With assistance from Vassilis Karamanis and Jack Pitcher.To contact the reporter on this story: John Ainger in London at jainger@bloomberg.netTo contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trump May Trash a Strong Dollar, But He’s a Boon for Bulls
    Bloomberg

    Trump May Trash a Strong Dollar, But He’s a Boon for Bulls

    (Bloomberg) -- For all of Donald Trump’s complaints about the dollar’s strength, he may have himself to blame.One theory behind the greenback’s 2.8% climb so far this year has to do with the U.S. president’s soaring approval rating. While concerns about the coronavirus have certainly increased the demand for so-called safe haven assets like the dollar, there has also been a 70% correlation between Trump’s popularity and the U.S. dollar since his election, according to calculations from TD Securities.That relationship has come into sharper focus as Trump’s approval rating has shot to 46%, the highest in three years, according to Real Clear Politics. It mirrors a similar relationship noted by Wall Street analysts as well between equities and Trump’s rising odds of re-election, as measured by prediction markets.​The U.S. currency has been more closely tracking stocks rather than falling Treasury yields, which would typically drag down the dollar, said Mark McCormick, global head of FX strategy at TD Securities.“Regardless of how Trump feels about the dollar, he’s been good for the buck,” he wrote in a report. “It’s likely the case that U.S. risk assets, and by extension the USD, prefer the status quo to a progressive shift in the White House.”The Bloomberg Dollar Index rose as much as 0.4% Thursday to touch its highest level in more than four months.​The Trump campaign has floated the idea of another round of tax cuts and, if re-elected, he would likely pursue a sizable infrastructure package, McCormick said. Similarly, a more centralist candidate such as Michael Bloomberg, who has been rising in the polls, would be “unlikely to upset the apple cart.” A progressive like Bernie Sanders, on the other hand, could pose a significant risk, the strategist said.“Expect more two-way risks ahead,” McCormick said.(Disclaimer: Michael Bloomberg is seeking the Democratic presidential nomination. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)(Updates prices.)\--With assistance from Felice Maranz and Ruth Carson.To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Jennifer Bissell-Linsk, Nick BakerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Royal Bank of Canada (TSX:RY) vs. TD Bank (TSX:TD): Which Stock Is Better?
    The Motley Fool

    Royal Bank of Canada (TSX:RY) vs. TD Bank (TSX:TD): Which Stock Is Better?

    Royal Bank of Canada (TSX:RY)(NYSE:RY) and The Toronto-Dominion Bank (TSX:TD)(NYSE:TD) are two bank stocks worth comparing

  • How a TD (TSX:TD) Mortgage Rate Cut Could Ignite a Housing Boom in 2020
    The Motley Fool

    How a TD (TSX:TD) Mortgage Rate Cut Could Ignite a Housing Boom in 2020

    Toronto Dominion made the first move among the big six and lowered its five-year fixed mortgage rates. If other banks follow its lead, the housing market may see a fresh rush of buyers.

  • TD Bank (TSX:TD) Stock Looks Like Canada’s Cheapest Bank
    The Motley Fool

    TD Bank (TSX:TD) Stock Looks Like Canada’s Cheapest Bank

    TD Bank (TSX:TD)(NYSE:TD) may not be the cheapest bank according to traditional valuation metrics, but it sure is when you consider the risk/reward trade-off!

  • TFSA Investors: 3 Top Value Stocks to Buy Right Now!
    The Motley Fool

    TFSA Investors: 3 Top Value Stocks to Buy Right Now!

    Bank stocks like Toronto-Dominion Bank (TSX:TD)(NYSE:TD) are looking mighty cheap right now

  • Toronto-Dominion Bank (TSX:TD): The Only Big Bank to Own in 2020
    The Motley Fool

    Toronto-Dominion Bank (TSX:TD): The Only Big Bank to Own in 2020

    Buy Toronto-Dominion Bank (TSX:TD)(NYSE:TD) today and lock-in a 4% yield.

  • 3 Scary Outcomes of Not Saving Enough Money
    The Motley Fool

    3 Scary Outcomes of Not Saving Enough Money

    You lose the opportunity to build a substantial nest egg by not saving enough money. With the Toronto Dominion stock and Sun Life stock, you can secure your financial future and live a comfortable retirement.

  • Euro’s Fate Lies in Who Blinks First: Real Money or Hedge Funds
    Bloomberg

    Euro’s Fate Lies in Who Blinks First: Real Money or Hedge Funds

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Where the euro goes next may be all about investor positioning.The common currency has slipped to the lowest since 2017 versus the dollar, yet this hasn’t deterred asset managers from accumulating the largest net long position on record. The move is more in line with the view of hedge funds, who are the most negative on the euro in three years, according to the latest Commodity Futures Trading Commission data.And while the increased bearishness of these leveraged funds should be expected given their flexibility to quickly respond to short-term fluctuations, the positioning across institutional investors may have taken some by surprise. The direction for the euro may therefore come down to who adjusts their exposure from multi-year extremes first.The common currency has come under pressure in both the spot and options markets on concerns over the coronavirus outbreak’s effect on the euro-area economy and the potential for a response through monetary stimulus by the European Central Bank. Options gauges signal traders are the most bearish on its short term prospects in five months, while they hold neutral bets over the longer term.Technically, there are signs the euro could see a relief rally in the short term, yet it remains on a bearish path in the medium term. It traded as much as 0.2% stronger Monday at $1.0851, rising for the first day in four.NOTE: Asset managers are institutional investors, including pension funds, insurance companies and mutual funds. Leveraged funds are typically hedge funds and other speculative money managersNOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment adviceTo contact the reporter on this story: Vassilis Karamanis in Athens at vkaramanis1@bloomberg.netTo contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Diversify Your Way to Wealth With These 3 Stocks
    The Motley Fool

    Diversify Your Way to Wealth With These 3 Stocks

    Toronto Dominion stock, Heroux Devtek stock, and Intact Financial stock allow for a good diversification analysis.

  • CNW Group

    TD Securities expands successful real estate banking franchise in the U.S.

    TD Securities expands successful real estate banking franchise in the U.S.

  • Is TSX:BMO or TSX:TD the Best Canadian Bank Stock to Invest in Today?
    The Motley Fool

    Is TSX:BMO or TSX:TD the Best Canadian Bank Stock to Invest in Today?

    Thinking of adding a bank stock to your portfolio? Find out whether BMO (TSX:BMO)(NYSE:BMO) or TD (TSX:TD)(NYSE:TD) is the right stock for you.

  • Why TD Stock Is a Hot Buy for 2020 and Beyond
    The Motley Fool

    Why TD Stock Is a Hot Buy for 2020 and Beyond

    Toronto-Dominion Bank (TSX:TD)(NYSE:TD) stock could be one of the better buys on the TSX this year.

  • CNW Group

    TD Asset Management Inc. Announces TD ETF Distributions

    TD Asset Management Inc. Announces TD ETF Distributions

  • Fed to Withdraw More Liquidity Than Expected Amid Funding Calm
    Bloomberg

    Fed to Withdraw More Liquidity Than Expected Amid Funding Calm

    (Bloomberg) -- The Federal Reserve Bank of New York will shrink its repurchase-agreement operations more than analysts expected, starting with Friday’s overnight offering, a sign officials are comfortable removing liquidity without upending funding markets.The central bank on Thursday announced a new schedule for both overnight and 14-day term repo operations through March 12. Starting next week, the term offerings will drop by $5 billion, to a maximum of $25 billion, and those starting March 3 will shrink again, to a maximum of $20 billion. The bank’s daily overnight operations, meanwhile, will drop by $20 billion, to a limit of $100 billion.This marks the second straight month the Fed is reducing liquidity injections. It said in mid-January that it would reduce term operations by $5 billion starting in February. These operations have been oversubscribed this month, but analysts say the demand from dealers hasn’t indicated renewed stress in funding markets, or concern about bank reserves. Instead, the strong bidding is seen as simply underscoring that the rates dealers can get in these operations are lower than prevailing market rates.“This decrease is a bit faster than expected,” said Gennadiy Goldberg, a senior U.S. rates strategist at TD Securities. “Given the functioning of the money markets recently, they’re probably feeling a bit more confident they can take away some of the repo support more quickly without market disruptions.”The newly scheduled offerings will provide liquidity through March 26. The Fed has been conducting repos and Treasury-bill purchases in a bid to keep control of short-term rates and bolster bank reserves. The efforts have calmed markets since the September spike that took overnight repo rates as high as 10%, and helped quell concern about a potential cash crunch at the end of 2019.The repo market has also experienced little volatility around other calendar events, such as Treasury auction settlement dates, when the market is prone to indigestion due to the influx of collateral.Fed Chairman Jerome Powell reiterated in congressional testimony this week that the central bank stands ready to adjust the operations as conditions warrant. Powell said last month the Fed would continue term and overnight repo operations at least through April.The Fed also said Thursday that it planned to continue buying $60 billion of Treasury bills each month for reserve management.To contact the reporter on this story: Alexandra Harris in New York at aharris48@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark TannenbaumFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Canadian Investors: How to Retire Wealthy Without a Company Pension
    The Motley Fool

    Canadian Investors: How to Retire Wealthy Without a Company Pension

    It is possible for people without a company pension to retire rich.

  • TD Markets First RMBS From a Top-Six Canadian Bank
    Bloomberg

    TD Markets First RMBS From a Top-Six Canadian Bank

    (Bloomberg) -- A unit of Toronto-Dominion Bank is moving ahead with what would be the first widely marketed Canadian private-label residential mortgage-backed securities deal from one of the country’s six largest banks, according DBRS Morningstar.The transaction will be backed by a C$688.3 million ($517 million) pool of home loans that were originated by three smaller lenders, according to a DBRS Morningstar document. TD Securities plans to offer C$450 million of top-rated securities with an expected maturity around Feb. 2023, according to people familiar with the matter who asked not to be named. It will be a milestone in creating a market to help disperse housing debt risk.The last RMBS deal widely marketed in Canadian dollars was conducted by a Home Capital subsidiary in September, when it issued C$425 million of securities that pooled near-prime and alternative-A mortgages. The weighted-average borrower credit score of that deal was 741, while that of TD’s Prime Structured Mortgage Trust will be 793, according DBRS Morningstar, which rated both deals.“The mortgage pool compares favorably with recent issuances seen in the Canadian market in terms of credit-score characteristics,” rating company analysts including Tim O’Neil wrote in the Feb. 11 report.A nationwide roadshow is taking place this week before the deal books are opened, so definitive terms still have to be set, people familiar with the matter said. The deal will be the first RMBS in Canada to aggregate mortgages originated by other lenders, mimicking a technique used in the securitization of mortgages guaranteed by the federal agency known as Canada Mortgage and Housing Corp, DBRS Morningstar said in an email to Bloomberg News.The volume of residential mortgages in Canada increased 5.1% in the twelve months through Nov. 30, according to data compiled by the Office of the Superintendent of Financial Institutions, or Osfi. That’s more than three times the country’s GDP growth in 2019. Uninsured mortgages grew 12% to C$759.4 billion. In contrast, insured loans declined 4.6% to C$469.5 billion over the same period, as the Federal government has sought in recent years to limit taxpayer exposure to the real estate sector.Lenders create mortgage-backed notes by packaging property loans into securities of varying risk and expected return, and there’s been little evidence that risky mortgages have become a prominent feature in Canada’s RMBS market. In addition, mortgages are “full recourse” in most of the country, meaning lenders can pursue borrowers even after they’ve walked away from the property.With a securitization deal the seller of the underlying assets can reduce the regulatory capital needed to be set aside to cover potential losses should they meet certain conditions, which includes transferring significant credit risk to third parties. The seller would need to hold capital for any securitization tranches retained.TD Securities will offer only the safest portion of the transaction, specifically the bullet-pay class A notes, retaining the mezzanine and junior pieces, a person familiar with the matter said. Back in 2017, Bank of Montreal created a C$1.96 billion RMBS deal, though much of the securities were purchased and retained by the bank itself, Moody’s Investors Service said at that time.The Canadian Fixed-Income Forum, a Bank of Canada-led group made up of bond-market professionals, has been working for around two years to expand interest in RMBS. Part of their efforts include a proposed public mortgage database, the details of which would be ironed out by a working group co-chaired by the central bank, the CMHC, representatives from the six largest banks and the Canadian Bankers Association on behalf of the smaller players, according to a presentation given in October.To contact the reporter on this story: Esteban Duarte in Toronto at eduarterubia@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Christopher Maloney, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Oil Posts Biggest Gain since Early January on Easing Virus Fears
    Bloomberg

    Oil Posts Biggest Gain since Early January on Easing Virus Fears

    (Bloomberg) -- Oil posted the biggest gain in almost six weeks as signs that the spread of Asia’s coronavirus may be slowing boosted investor confidence that crude’s sell-off has peaked.Futures in New York climbed 2.5% on data from China that showed a drop in suspected coronavirus infections. The positive sentiment was largely undeterred by a government report showing U.S. crude stockpiles posted the largest build since November.“Markets are pricing in that we may have hit peak coronavirus fear,” said Daniel Ghali, a commodities strategist at TD Securities. “Investors that were bearish are thinking they want to start to take their foot off the pedal.”Prices have also drawn some support from signals that OPEC and its partners may intervene to shore up the market. The coalition slashed its estimate for demand growth in the first quarter by 440,000 barrels a day, as the coronavirus hits fuel consumption in China. In a meeting with Energy Minister Alexander Novak, Russia’s key oil producers voiced support for the idea of extending OPEC+ output cuts into the second quarter, but made no final decision.Saudi Arabia has been the strongest advocate for production cuts of an additional 600,000 barrels a day. Russia has remained noncommittal, saying more time was needed to study the proposal.The Energy Information Administration reported that nationwide crude inventories rose 7.46 million barrels last week, more than double the 3.2 million-barrel increase forecast by analysts in a Bloomberg survey. The report also showed a surprise gasoline draw of 95,000 barrels.Gasoline futures surged 4.4%, the biggest rise increase since September, after a fire broke out overnight at Exxon Mobil Corp.’s Baton Rouge oil refinery in Louisiana, halting production at the fifth-biggest fuel-making plant in the U.S.West Texas Intermediate crude for March delivery gained $1.23 to settle at $51.17 a barrel on the New York Mercantile Exchange.Brent for April settlement climbed 3.3% to settle at $55.79 a barrel on the ICE Futures Europe exchange in London, putting its premium over WTI at $4.38.The market’s structure also showed signs of strengthening with the discount on front-month Brent contracts versus the second month narrowing to 12 cents, suggesting fears of a supply glut may be easing.Still, discounts have held for Brent contracts for the majority of 2020, a pattern known as contango that typically reflects oversupply.“We’ve seen a lift because in the very near term, it’s all about the virus,” says Judith Dwarkin, chief economist at RS Energy Group. “Until we’re out of the woods the market will be laser focused on slowing demand growth and if OPEC waits to implement cuts until April, it may be too late to deal with the bulge in supply.”To contact the reporter on this story: Jackie Davalos in New York at jdavalos10@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Mike Jeffers, Reg GaleFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Canadian Banks Going Green Still Boost Loans to the Oil Industry
    Bloomberg

    Canadian Banks Going Green Still Boost Loans to the Oil Industry

    (Bloomberg) -- Canada’s big banks may be embracing green, but that hasn’t stopped them from lending more and more money to fossil-fuel companies.The six largest lenders had C$58.8 billion ($44.2 billion) in energy loans on their books at the end of the fiscal year, a 59% jump from five years ago, even after touting billions of dollars in climate-friendly commitments. There’s little sign of that trend abating even as oil and gas companies face increasing scrutiny over the the roles they play in climate change.Much like their counterparts in the U.S. and globally, Canadian lenders are under pressure to show they’re doing their part in fighting carbon emissions and rising temperatures. They want to show they’re delivering on green promises they’ve made, yet they’re steadfast in supporting an industry that is key to Canada’s resource-heavy economy. Energy accounts for about 10% of the Canadian economy and a fifth of exports.“The Canadian banks understand there’s an issue here and they’re trying to work on it,” said Laura Zizzo, founder and chief executive officer of Toronto-based climate consultancy Mantle314.Energy financing is becoming slightly less important for the banks, which collectively lend more to the real estate and financial services industries. Oil and gas loans accounted for an average of 5.2% of corporate financing at the big banks in 2019, down from 6.3% five years ago. Bank of Montreal and Toronto-Dominion Bank bucked that trend, with oil and gas loans representing a greater share of their corporate lending after acquiring energy books from foreign banks.Bank of Montreal more than doubled oil and gas lending in five years, peaking at C$13.5 billion last year, driven up by the 2018 purchase of energy loans from Deutsche Bank AG and an overall corporate-financing surge. Chief Executive Officer Darryl White said in a BNN Bloomberg television interview last month that the bank’s support of legacy fossil-fuel clients helps them shift to a cleaner economy.“It’s all about supporting leaders who want to transition over time -- and it does take time, and it will take time -- to a lower-carbon economy,” White said.More Than DoubledAt Toronto-Dominion, Canada’s second-largest lender by assets, loans to pipeline, oil and gas firms more than doubled to C$9.22 billion since 2014, though part of the jump was from the purchase of energy loans from Royal Bank of Scotland about four years ago.While the bank “is actively supporting the transition to a low-carbon economy,” Toronto-Dominion is “aware that Canadians will rely on conventional energy sources for several more decades to sustain our economy, create jobs and support a standard of living for our customers and communities,” spokeswoman Lynsey Wynberg said in a statement.Royal Bank of Canada, the nation’s largest lender, pared loans to the industry in 2016 and 2017, but they’ve since climbed back steadily. Shifting to greener energy production requires a strong economy aided by contributions from the traditional energy sector, CEO Dave McKay said.“You need fossil-based fuels to make that transition,” he said in a Bloomberg TV interview last month. “They’re not going away overnight.”Scotiabank, CIBCMcKay’s bank is hardly alone in its support of the industry. Bank of Nova Scotia had the most energy loans last year, while Canadian Imperial Bank of Commerce CEO Victor Dodig in November gave his backing to Canada’s energy companies, saying the bank “will be there to help address the challenges and opportunities that lay ahead.”Among the country’s largest lenders, National Bank of Canada is alone in shrinking its oil and gas loan book, to C$2.75 billion last year from C$3.62 billion in 2014. Such financing represented 4.4% of overall corporate loans in 2019, almost half the portion five years earlier.Not all energy financing is equal, and more disclosures are needed to show whether loans are backing environmentally friendly projects, said Zizzo of Mantle314.“When the banks are giving a facility to an energy company, they usually don’t delineate if that’s going toward something we should think about as transition or as propping up a mature and dirtier aspect of the energy sector,” she said. “This is a real conundrum.”Fossil-fuel companies themselves are under pressure to become greener. Suncor Energy Inc. and Cenovus Energy Inc. set goals of reducing their emissions per barrel of oil produced by 30% by 2030, and Canadian Natural Resources Ltd. and MEG Energy Corp. have set long-term goals of net zero emissions from their oil-sands operations.Canada’s five biggest banks have each set targets that could support such efforts. Scotiabank was the latest, offering in November to “mobilize” C$100 billion by 2025 to reduce climate-change impacts. CIBC committed in September to support C$150 billion in environmental and sustainable finance activities by 2027, while Bank of Montreal said last June it would provide C$150 billion in capital by 2025 to companies pursuing sustainable outcomes.“It’s really great to galvanize interest in the sustainable finance that’s required,” Zizzo said. “But I think it’s really just a first step of what’s needed.”To contact the reporters on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net;Kevin Orland in Calgary at korland@bloomberg.netTo contact the editors responsible for this story: Derek DeCloet at ddecloet@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Steve DicksonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Treasuries Rally to Cool With China Stimulus Seen, BNP Says
    Bloomberg

    Treasuries Rally to Cool With China Stimulus Seen, BNP Says

    (Bloomberg) -- The virus-induced rally in U.S. Treasuries could be brief as China stimulus and a recovery in U.S. growth rein in demand, according to BNP Paribas SA.Yields for the 10-year bond may drop to a 2016 low before rising as high as 1.95% in the next three months, said Shahid Ladha, head of G-10 rates strategy at BNP. While the coronavirus outbreak will hurt China’s economy, the rapid gains in Treasuries suggest that the market has gotten ahead of itself, he said.“It’s gone quite far in the U.S. especially with broad U.S. risky assets looking up,” Ladha said at an interview in Singapore. Convexity hedges -- where investors seek to compensate for a drop in rates by buying longer-dated bonds -- may have exacerbated the fall in yields, he said.Benchmark yields have fallen 35 basis points this year to 1.57% as investors priced in slower global economic growth and easing by central banks due to the coronavirus outbreak. The pace of the decline has stoked debate over how far the rally can go.As the death toll mounts in China, measures to contain the virus have hurt retailers and shuttered factories. The People’s Bank of China has announced stimulus to counter the fallout, including providing special re-lending funds. Officials have stressed that there’s ample policy room to deal with a crisis.“The market will try at some point to look beyond onto the considerable investment and upside that comes after, as did happen in Hong Kong, China in 2003,” Ladha said, referring to the SARS outbreak. “You try to learn from history.”Dovish FedTreasury 10-year yields fell to as low as 1.32% in 2016. TD Securities and J.P. Morgan Asset Management have predicted that subdued price pressures and dovish Federal Reserve policy may pave the way for further gains in the bonds.But, Ladha noted that the strength of the U.S. economy and decent inflation levels are likely to limit the drop in yields. Data last week showed American employers ramped up hiring in January and wage gains rebounded, bolstering the case for the Fed to keep interest rates on hold for the rest of the year.Here are some of Ladha’s other investment views:Firm favors local-currency Asian government bonds including Singapore, Thailand and ChinaAsian central banks are poised for more easing, which will provide “some insulation” from the virus-induced economic slowdownInvestors seeking hedges are better off selling expensive equities than buying “rich” TreasuriesRise in 10-year Treasury yields will likely be capped at around 2.25% this year amid global demand for positive-yielding debt(Adds yield forecast in last bullet)To contact the reporter on this story: Ruth Carson in Singapore at rliew6@bloomberg.netTo contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net, Liau Y-Sing, Nicholas ReynoldsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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