CWB reports Q2 growth with increased income and earnings per share
From Investing.com: 2024-06-02 20:14:59
Canadian Western Bank (TSX:) has reported its second quarter 2024 financial results, with a 15% increase in pre-tax pre-provision income and a 9% increase in adjusted earnings per share. Loan portfolio growth was 1%, but overall loan growth fell short of expectations, impacting net interest income growth. CWB aims to accelerate loan growth, projecting adjusted earnings per share between $3.50 and $3.60 for the year.
Key Takeaways:
– CWB’s pre-tax pre-provision income rose 15% and adjusted earnings per share increased by 9% year-over-year.
– The bank’s loan portfolio grew 1% sequentially, with general commercial loans growing by 6% annually.
– Loan growth was below expectations, resulting in lower net interest income growth.
– CWB plans to manage expenses closely and remain within its full-year provision for credit losses guidance.
– The bank aims to increase market share and accelerate loan growth, projecting earnings per share between $3.50 and $3.60 for the year.
Company Outlook:
– CWB intends to grow market share and loan growth as the economy improves.
– Leveraging balance sheet strength and reorganized operations for growth opportunities.
– Launching new cash management platform to enhance client experience and drive deposit growth.
– Focused on positive operating leverage and anticipates strong pre-tax, pre-provision income growth in Q4.
Bearish Highlights:
– Slower loan growth led to reduced outlook for annual earnings per share.
– Decreased asset yields due to reduced loan origination and higher deposit costs.
– Trucking sector impairments expected to continue in the second half of the year.
Bullish Highlights:
– Confidence in winning market share as the market improves.
– Expect loan pipeline to rebound in the second half, meeting full-year guidance.
– Predicted net interest margin increase in Q3, Q4 from loan growth and margin expansion.
Misses:
– Slower loan growth impacts annual earnings per share outlook.
– New cash management platform temporarily affects deposit growth.
Q&A Highlights:
– Seasonal deposit increase is not credit-related.
– Positioned neutrally for interest rate shifts, positive net interest margin expected.
– No significant credit performance changes expected unless macroeconomic environment shifts.
CWB concludes earnings call optimistically and looks forward to Q3 financial results in August. Commitment to selective borrowers and strong companies for loan growth and stable PCL ratio.
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