CIBC CIBC bank analyst Paul Holden published his top picks in the sector after a disappointing earnings season,
“Earnings estimates saw a significant haircut following weaker-than-expected FQ2 results. The primary drivers were lower net interest income and higher non-interest expenses. Credit losses came in lower than expected and hence we have not yet seen a major revision on that front. With weak core earnings trends and credit as an overhang we maintain our defensive stance on the sector. NA and TD are our two Outperformers, both of which have higher-than-average CET1 ratios, higher-than-average LCR ratios and higher-than-average performing ACL ratios. Defensive attributes are strong… Funding cost pressures impacted FQ2 NIM and NII more than expected. Challenges are likely to persist at least one more quarter.”