Canadian banks made $96 million profit per day in 2015: Nationalise them ! Dec 06 2015

Canada’s big banks in 2015 made super-profits while economic weakness took a heavy toll on the workers.

Brought to my attention by Comrade Harinder Hundal, Brampton, Ontario

 Greed is not enough!

A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto. Royal Bank made Canadian history as the first company to earn $10 billion in one year.

Based on story in  Toronto Star

By: Sunny Freeman Business Reporter,

Thu Dec 03 2015: http://on.thestar.com/1OP02DI

Canada’s biggest banks earned $35 billion in 2015, a five per cent rise from the year before despite concerns over a lending slowdown in a weak economy.

Earnings for the country’s six largest lenders — include Royal Bank, TD Bank, Scotiabank, the Bank of Montreal, CIBC and National Bank — work out to about $96 million for every day of the fiscal year ended Oct. 31.

They earned combined revenue of $129.79 billion in 2015, a four per cent increase from the year prior.

The banks set aside a combined $12.5 billion in bonuses, a 4.3 per cent rise from the $12 billion reserved in fiscal 2014, just a third of the rate of last year’s 13 per cent growth. That signals a slowdown in adviser fees and revenues in wealth management, capital markets and insurance businesses.

Meanwhile, the banks also eliminated 4,664 jobs in the fourth quarter, the biggest quarterly cut in six years.

The moves, which reduced the industry’s workforce by 1.3 per cent, are part of a massive effort to streamline operations in the face of technological change. Restructuring charges ate into the fourth-quarter profits at many of the country’s six largest lenders.

However, the banks surprised analysts with better-than-expected fourth-quarter earnings this week in their last reporting period of the year.

RBC became the first Canadian company to top $10 billion in a fiscal year.

Half of the big banks raised their dividends.

“Clearly they seemed to defy the preview expectations,” said Dan Werner, a bank analyst at Morningstar.

Most of the strong fourth-quarter performance came from personal and commercial loan businesses. Consumer loan growth hasn’t slowed despite predictions that record household debts and worsening economic conditions could mean more defaults and fewer new loans.

Bank analysts have been warning that a slumping oil sector, high consumer debt levels, an unstable housing market and threats from emerging players could hit 2015 earnings.

And they continue to be wary those risks could have a bigger impact in 2016.

“I think there’s still some caution about a lot of things,” Werner said.

“But it just hasn’t been realized yet.”

Bank profits soar:

Toronto-Dominion:

Full year: $8.02 billion, up 2%

Fourth quarter: $1.84 billion, up 5%

Revenue growth that beat analysts’ expectations largely came from more loans to consumers and wealth management. The bank has been focused on cost-cutting all year and booked a $349 million restructuring charge in the fourth-quarter. It cut 798 positions during the quarter.

Canadian Imperial Bank of Commerce:

Full year profit: $3.59 billion, up 11 %

Fourth quarter profit: $778 million, down 4%

The bank raised its dividend for the fifth quarter in a row. This was even though its fourth-quarter profit declined from a year ago, dragged down by a $161 million restructuring charge. The bank also cut 184 jobs during the quarter.

Bank of Montreal:

Full year profit: $4.41 billion, up 2%

Fourth quarter profit: $1.21 billion, up 13 %

BMO also increased its dividend, while cutting 883 jobs during the quarter. Some analysts suggested fourth-quarter results looked better because of one-time items such as the sale of its retirement services and a legal settlement.

Royal Bank:

Full year profit: $10.03 billion, up 11 %

Fourth quarter profit: $2.59 billion, up 11%

The bank’s profit was a record for a Canadian company as its banking operations in the U.S. and Caribbean turned profitable. Even so, it said it noticed a slight upward trend in auto and credit card delinquencies in Alberta. RBC cut 1,375 jobs during the quarter.

Bank of Nova Scotia:

Full year profit: $7.2 billion, down 1%

Fourth quarter profit: $1.84 billion, up 28 %

Scotia has been trimming costs to shore up its bottom line. It has shed 1,140 jobs since the end of July as part of a plan to close back-office support centres over the next two years. It also reported that bad loan exposure to the oil patch jumped.

National Bank:

Full year profit: $1.62 billion, up 5%

Fourth quarter profit: $347 million, up 5%

The Montreal-based bank boosted its divided in the quarter, but had to sell new shares to raise capital in the previous quarter. It cut 284 positions during the quarter.

— With files from Bloomberg