The Daily Chase: Canadian economy stalls in Q4; Bank earnings season kicks off
BNN Bloomberg
The domestic economy slipped into negative growth territory in December, with output falling 0.1 per cent month-over-month.
CANADA RECOVERY BENEFIT STINGS SCOTIA
Well, it’s shaping up as something of a noisy quarter out of the Canadian banks, which was on full display over at Scotiabank. Adjusted earnings per share badly missed estimates at $1.85 vs an estimate of $2.02, revenue of $7.98 billion against an estimate of $8.26 billion – but it’s the devil in the details, as always. The company clearly has its nose bent out of shape of the Canada Recovery Dividend – that one-time tax surcharge on profits of over a billion dollars levied on the banks and lifecos – which it cites a solid four times in its earnings release. That surcharge cost the bank $579 million in the quarter, firmly denting results. If we’re looking for one common theme so far, it’s higher provisions for credit losses – that cash set aside for potentially sour loans – as Scotia set aside $638 million in the quarter, which follows CIBC’s higher PCLs late last week.
BANK OF THE WEST DEAL HITS BMO
