Slumping capital markets and M&A revenues are set to hit earnings at Canada’s biggest banks when they report this month, according to Royal Bank of Canada.
RBC analyst Darko Mihelic chopped his profit forecast on five major Canadian lenders, citing a dearth of deals. The dollar value of mergers and acquisitions handled by the country’s largest banks likely dropped 77 per cent in the fiscal third quarter compared with a year ago, Mihelic calculated, based on data compiled by Bloomberg.
Advertisement 2
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
- Daily content from Financial Times, the world’s leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
- Daily content from Financial Times, the world’s leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Article content
Overall earnings may slip six per cent in the quarter, with Bank of Nova Scotia and Canadian Imperial Bank of Commerce to suffer the biggest projected declines, Mihelic wrote. The analyst doesn’t provide estimates for his own bank. The banks begin reporting near the end of August.
Mihelic lowered his forecasts for capital markets revenue based on the results of major U.S. banks that reported second-quarter results last month.
Toronto-Dominion Bank may do better than its peers, helped by the integration of Cowen Inc. TD’s capital markets unit may see a 6.3 per cent drop in capital markets revenue compared with 10 per cent for other banks, compared with a year ago, Mihelic said in an Aug. 8 note to investors.
