A street sign for King St. West hangs off a light standard at the corner of King Street West and Bay Street on January 12, 2015.Fred Lum/The Globe and Mail
National Bank of Canada will conclude the second quarter reporting season for Canada's biggest banks on Wednesday morning, with results that are expected to rise impressively from last year.
The consensus from analysts is that National Bank, the smallest of the Big Six, will report an adjusted profit of $1.26 a share. That's up from a profit of just 60 cents a share in the second quarter of 2016, when results were weighed down by a large sectoral provision for credit losses related to struggling energy companies.
Now, though, the price of oil has recovered some lost ground, reducing the need for banks to book alarming provisions against bad loans.
Although the bank has a large capital-markets division, investors should be paying close attention to its retail-banking operations, which should benefit from recent cost-cutting initiatives.
Also, analysts are expecting a 2-cent dividend hike, bringing the quarterly payout to 58 cents a share from 56 cents.
For the five big banks that have reported results so far, four have topped expectations, by an average of nearly 5 per cent (Bank of Montreal missed expectations by 0.3 per cent). However, share prices for the group are still down nearly 9 per cent since early March.
In other activity, CAE Inc. will report its fiscal fourth-quarter results. Analysts expect a profit of 29.5 cents a share, up about 9 per cent from last year.
The company, which provides flight-simulation technology, has a good track record for beating expectations. It has exceeded estimates for the past five straight quarters.
In the U.S. market, Michael Kors Holdings Ltd. will report its quarterly results, amid low expectations for the luxury lifestyle brand. Analysts expects profit will slump to 70 cents (U.S.) a share, down from $1.02 last year. Revenue is expected to fall to $1.05-billion, down from $1.2-billion.