Canadian Banks Post-Earnings: Profits, Dividend Hikes, Financial Upside Comparison

By Ketki Saxena

Investing.com – All of Canada’s big six banks reported Q2 2022 earnings this past week, with Scotiabank (TSX:BNS), RBC, and National Bank of Canada (TSX:NA) smashing analyst expectations on profits, BMO (TSX:BMO) and TD (TSX:TD) delivering results in line with expectations, and CIBC (TSX:CM) the only major Canadian bank to fall well short of analyst forecasts due to higher-than-expected costs.

Profits for the big banks were largely boosted by the personal and commercial segments, improving loan margins and lower loan losses, as consumer spending and business investment rebounded following the lifting of public health restrictions.

The big Banks were also 5 for six on dividend hikes, with all but TD raising their quarterly dividends.

Canadian banks remain optimistic about client sentiment and expect growth to continue although perhaps at a more moderate pace as worries of an economic slowdown, driven by rising interest rates and still-high inflation, raise concerns of waning loan demand and rising defaults.

Here’s a post-earnings comparison of Canada’s big six banks reviewing some of the key metrics most important to investors.

BMO: May 25, 2022

• EPS: $3.23, compared to analyst estimates of $3.24
• Revenue: $6.56B, compared to analyst estimates of $6.65B
• Current Dividend:
• Dividend Hike: Quarterly dividend up from $1.33 to $1.39 per common share to be paid from Aug. 26.
• Current price: $135.85
• 12 month Fair Price Target (NYSE:TGT): $151.78, representing an 11.7% upside

Scotiabank: May 25, 2022

• EPS: $2.18, compared to analyst estimates of $1.98
• Revenue: $7.94B compared to analyst estimates of $7.85B
• Current Dividend:
• Dividend Hike: Quarterly dividend up from $1.00 to $1.03 per common share to be paid from July 27.
• Current price: $85.10
• 12 month Fair Price Target: $103.49, representing a 21.6% upside

TD: May 26, 2022

• EPS: $2.02, compared to analyst estimates of $1.98
• Revenue: $11.04B, compared to analyst estimates of $10.34B
• Current price: $95.89 CAD
• 12 month Fair Price Target: $122.12, representing a 27.3% upside
  

CIBC: May 26, 2022

• EPS: $1.77, compared to analyst estimates of $1.81
• Revenue: $5.37B, compared to analyst estimates of $5.28B
• Dividend Hike: Quarterly dividend up from $0.80 to $0.83 per common share to be paid from July 28.
• Current price: $69.12
• 12 month Fair Price Target: $81.31, representing a 17.6% upside

Royal Bank of Canada (TSX:RY): May 26, 2022

• EPS: $2.96, compared to analyst estimates of $2.68
• Revenue: $11.63B, compared to analyst estimates of $11.69B
• Dividend Hike: Quarterly dividend up from $1.20 to $1.28 per common share to be paid from Aug. 24.
• Current price: $130.45
• 12 month Fair Price Target: $169.77, representing a 30.1% upside

National Bank of Canada: May 27, 2022

• EPS: 18% surprise; $2.55 compared to analyst estimates of $2.27
• Revenue: $2.49B, compared to analyst estimates of $2.36B
• Dividend Hike: Quarterly dividend up from 87 cents to 92 cents per common share to be paid from Aug. 1.
• Current price: $97.12
• 12 month Fair Price Target: $104.17, representing a 7.3% upside
  
  

All currencies CAD

All prices as of 1:45 p.m ET.

All fair price and financial upside data from Investing Pro