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Canadian Banks' Earnings Growth Pressured by Global Weakness in Telecommunications and Cable Industries May 02
Standard & Poors, May 2002
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
The recent announcement that BCE Inc. was withdrawing support of its extremely weak Teleglobe Inc. subsidiary caused most of the large Canadian banks to reevaluate their provision levels, and will lead some to miss their earnings targets for the second quarter of 2002. Canadian banks typically provide annual projections of estimated provisioning early on in the fiscal year. This addition to the banks' portfolios of problematic loans is only the latest in a series of soured loans that have caused banks to revise those projections for fiscal 2002, just as they did in fiscal 2001. It also serves to point out the issue of large single-loan exposures that can have a significant impact on earnings if they go sour. Telecom...
Companies mentioned in this report are: Royal Bank of Canada,Toronto-Dominion Bank (The),Bank of Montreal,Bank of Nova Scotia (The),Canadian Imperial Bank of Commerce,National Bank of Canada,BCE Inc.,Teleglobe Inc.,Laurentian Bank of Canada
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