BANK EARNINGS NEXT WEEKSeeing as how Canadian Banks are such a significant portion of the DFN portfolio I think this is should be what defines how DFN will do until a vaccine is found. The actual earnings are not as important as they would usually be and will probably be lower. However, estimates have been lowered to reflect this expectation.
Dividends should not be affected. In the current economic environment they will not be increased as that is taboo right now. Share buybacks are also somewhat taboo in this environment.
A possible problem may be exposure to bad loans and thus more money being set aside to deal with credit defaults.
However, the biggest problem for banks may be exposure to LDOs. These are very similar to the Mortgage backed derivatives and bundled loans that brought down the markets/banks/ economy in 2008/2009. The key to Canadian banks getting through that crisis was that they held little or no significant exposure to these in their reserve deposits. The banks have been yield hunting for the past few years so I do hope and will be looking for any reporting of exposure to LDOs or anything that resembles them.
If it is a danger to the banks it is a danger to the share price of DFN and the continuinty of the dividends.
It is nice to see them back and the reason to buy DFN is to buy into a repeat of the last run of 191 consecutive dividends.