TSX:BMO - Post Discussion
Post by
JasleenDhaka on Dec 12, 2022 2:51pm
Rate Hike Pause Should Benefit the Big Five!
About our analyst: Siddharth Rajeev, B.Tech (Electronics Engineering), MBA (Finance), CFA Update on Canadian Banks: • FY2022 (ended October 2022) EPS of the Big Five beat our estimates by 9% on average, due to stronger-than-expected lending, and lower-than-expected loan loss provisions. Except for CIBC, all of the Big Five reported earnings growth in FY2022. • Lending surged 17% in FY2022 vs 6% in FY2021. Due to higher rates, and a slowing economy, we are expecting loan growth to decline in FY2023. The IMF recently lowered its 2023 GDP growth forecast for Canada from 1.8% to 1.5%. • On November 29, 2022, RBC announced plans to acquire HSBC Bank Canada (LSE: HSBA) for $13.5B, implying 2.4x P/B and 18.7x P/E. These multiples reflect a 103% premium to the current sector averages, and a 49% premium to pre-pandemic levels, indicating that RBC is expecting significant synergies from the deal. Keep reading more in the full report available here: https://www.researchfrc.com/canadian-banks-tsx-ry-td-bns-bmo-cm-rate-hike-pause-should-benefit-the-big-five/?utm_source=stockhouse.com&utm_medium=Referral&utm_campaign=stockhouse.com&utm_id=Canadian+Banks *FRC provides issuer-paid coverage. *Past performance is not indicative of future results.
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