Canada's major banks continue to show they largely avoided the financial meltdown experienced by banks in the U.S. and overseas.
Canada's big five banks reported quarterly results this week and together they earned a combined total of $4.4 billion Canadian (US$4 billion) in the third quarter, up CA$500 million ($458 million) from CA$3.9 billion ($3.6 billion) a year earlier.
Craig Fehr, bank analyst at Edward Jones in St. Louis, said Friday that with the exception of Canadian Imperial Bank of Commerce, all the major banks roundly beat analyst expectations.
While the U.S. has seen 81 banks fail in 2009 alone Canada not experienced the failure of any major financial institution.
There has been no crippling mortgage meltdown or banking crisis in Canada where the financial sector is dominated by five large banks.
President Barack Obama said earlier this year that the United States should "take note" of how Canada has shown itself to be a good manager of its financial system. Prime Minister Stephen Harper has said Canada has strong regulation that encourages a cautious culture in the banks.
Canada's big banks weren't as leveraged as their international peers. The World Economic Forum has said Canada has the most sound financial system in the world, with a rating of 6.8 out of 7.
TD bank chief Ed Clark credited the strength of the Canadian resale housing market as one of the reasons for the better than expected results. A top executive at the Royal Bank of Canada also noted a robust spring mortgage season. Canada's banks avoided the sub prime mortgage mess.
The Bank of Montreal's adjusted earnings per share beat analyst expectations by 11 percent, while TD topped expectations by 20 percent, Royal beat expectations by 33 percent and Scotiabank exceeded predictions by 4 percent. CIBC was the only major bank to disappoint investors, missing expectations by 2 percent.
