COVID-19 roundup: TD Bank and CIBC round out difficult week for Big Six earnings

TD Bank tower in Toronto in May 2019. Shutterstock/BobNoah

This article is a preview of The Logic’s Daily Briefing newsletter, sent every weekday.

Get complimentary access to award-winning reporting to navigate these unprecedented times. Sign up now.

It’s day 79 since Canada’s 100th coronavirus case. The number of cases is 88,468 as of publication time, up 949 since yesterday—a seven per cent decrease from the seven-day prior average of new cases. On their respective 79th day, U.S. daily new cases were down four per cent from the seven-day prior average; the U.K. was up 11 per cent in daily new cases from the seven-day prior; and in Italy, new cases were down 38 per cent.*

Latin America is the new epicentre of the coronavirus, representing about 40 per cent of daily deaths worldwide.

Wrapping up bank earnings: TD Bank and CIBC rounded out Big Six earnings week with profit drops and set-asides for bad loans similar to those announced by their peers. TD saw its net income cut in half year over year, dropping to $1.5 billion in its fiscal second quarter as it increased credit-loss provisions in its Canadian retail business by $873 million. The company reported “500,000 loan concessions, insurance premium reductions and deferrals, and loans facilitated under the [Canada Emergency Business Account] program” domestically thus far. TD’s U.S. retail bank suffered the largest drop, with profit falling 90 per cent to $102 million as revenue declined. CIBC posted net income of $392 million, down 71 per cent year over year, and loan-loss provisions of $1.41 billion, up nearly fivefold. Both banks have also been major outlets for governments’ COVID-19 business-support programs. CIBC issued $1.9 billion in loans for Ottawa’s CEBA and US$1.9 billion under the U.S. Paycheck Protection Program through the end of April, while TD had given out $4.7 billion and US$6 billion, respectively, over the same period. 

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

The state of work: Workers in low-paying jobs and in goods-producing sectors felt the first job effects of the pandemic, Statistics Canada’s Thursday release of payroll data shows. The loss of those less lucrative roles meant average weekly earnings in Canada actually increased 0.6 per cent in March compared to the previous month, to $1,053. Business-services firms did better than the economy as a whole, with payroll falling 2.9 per cent versus 5.4 per cent overall. But as Indeed Canada economist Brendon Bernard noted, advertising (-6.1 per cent) and design firms (-7.4 per cent) saw larger-than-average drops, while R&D (-0.2 per cent) and computer systems design companies (-1.9 per cent) were relatively insulated. 

While the pandemic has led to record job losses economy-wide, the innovation economy workforce has proved relatively resilient, The Logic’s analysis shows. Growth in the number of software developers, engineers, life-science professionals and similar fields has far outpaced most other occupations over the last decade and a half, and economists and tech-sector advocates say those workers are better placed to ride out the downturn. 

In the markets: The Dow Jones, S&P 500 and Nasdaq closed down after U.S. President Donald Trump said he would hold a press conference about China and Hong Kong. All three indices were up early in the day  on news that 21.1 million people in the U.S. received jobless benefits last week. That’s a 3.9-million drop from the week prior and the first decline since February, but still more than three times higher than the previous record of 6.5 million receipts in 2009. The 10-week total of jobless claims has now surpassed 40 million. The TSX ended down 0.06 per cent, while the Canadian dollar fell 0.12 per cent in late afternoon trading to hit 72.59 cents U.S., within reach of a two-and-a-half-month high. 

The rally came despite a series of negative macroeconomic indicators. U.S. GDP fell five per cent in the first quarter, more than previously estimated and the worst drop since the last recession. Canada reports GDP on Friday, and economists are predicting a 10 per cent first-quarter drop, followed by a 41 per cent dip in the second quarter. Those estimates would eliminate Canada’s status as one of the fastest-growing G7 nations, but still fall well short of the Bank of Canada’s worst estimates. Meanwhile, a small proportion of the U.S. Federal Reserve’s lending facilities have been used so far. The European Investment Bank will spend €2 billion to bolster health-care systems on the continent and to roll out a vaccine once it’s ready. 

The TSX will increase 2.9 per cent to 15,590 by the end of 2020, according to a survey of 25 portfolio managers and strategists. Back in February, when the TSX hit 17,970.51, the same group predicted the index would hit 18,175 by year’s end. 

“Hiring people through Zoom isn’t necessarily the weirdest part. What’s different is that you start working with someone without actually seeing the person, or taking the person to the office”: Felipe Guerra, chief investment officer at São Paulo-based hedge fund Legacy Capital, reflected on how COVID-19 has disrupted the traditional recruitment process. 

Cross-country checkup: Refugees and Citizenship Canada is urgently seeking a digital system to help process immigration applications, as the pandemic significantly disrupts the system that typically relies on pen-and-paper forms or in-person interviews. P.E.I. has extended its state of emergency until June 14; out-of-province cottagers will have to apply to visit the island. The New Brunswick legislature has adjourned just two days after returning, after new confirmed COVID-19 cases. Prime Minister Justin Trudeau led a call for global cooperation in rebuilding economies after the pandemic; Canada is competing for a seat at the UN Security Council next month on a platform of helping rebuild the post-pandemic world. 

Bay Street to Main Street: Cineplex stock rose 12.7 per cent at close, as U.K.-based Cineworld, the firm seeking to take it over, announced plans to reopen all cinemas by July. Cineworld, for its part, was up 22 per cent after it secured $110 million. Earlier this month, the two firms said they’re still committed to the $2.1-billion acquisition, which would create one of the world’s largest cinema companies with 11,200 screens worldwide. 

  • Rogers, Bell and Telus are cutting costs as profits fall due to fewer new customers signing up and existing ones seeking lower-priced plans. 
  • Google is providing $1 million to set up 50,000 online stores in Canada in an expansion of the Digital Main Street Program first launched in Toronto.
  • Thirty-nine per cent of Canadians workers hold jobs that can be done from home, more than the 37 per cent in the U.S., according to Statistics Canada. 
  • Toronto-based BehrTech received a $3-million federal government grant to build a sensor-technologies lab. The firm currently has about 20 employees and will use the grant to hire five more, CEO Albert Behr told The Logic

Crowdsourcing the crisis: Telus has launched #StandWithOwners, an initiative that asks Canadians to support small businesses on Twitter or Instagram. Every person to post will be eligible to receive a $25 gift card to use at a selected business. 

Trace me on my cellphone: While the federal government hasn’t announced which contact-tracing app it will recommend to Canadians, Mila scientific director Yoshua Bengio said he is “worried about the [government’s] direction” toward Shopify’s open source product. Covi, MILA’s AI-powered app, recently launched, and Bengio hopes the federal government will recommend it to Canadians. Competition in the space is, however, growing. Facedrive, a Toronto-based ride-sharing and food-delivery company, has launched a contact-tracing app called TraceScan, built in partnership with the University of Waterloo. Asked about Facedrive’s app, Hayley Chazan, a spokesperson for Ontario’s health minister, didn’t answer directly, saying the province is broadly “monitoring” the progress of contact-tracing apps. “To ensure that patient privacy is respected, further exploration is needed to examine various consent models for mobile applications that include sharing personal information,” she said. 

Meanwhile, Manitoba Premier Brian Pallister called for a national contact-tracing program; he also said the province is considering the technology: “There are some hiccups we want to work out before we can introduce it.” France’s app will be available from June 2. Here are 16 guidelines Nature recommends governments and public health agencies follow to ensure a contact-tracing app is ethically justifiable.

In the lab: GlaxoSmithKline aims to manufacture one billion doses of its vaccine-efficacy boosters, known as adjuvants, in 2021, to support the development of COVID-19 vaccines. Moderna has extended a deal to secure large volumes of the lipids needed to manufacture its experimental vaccine, which is the first to be tested on humans in the U.S. As the search for a vaccine continues, one analysis has found that, since mid-March, the total stock market value for the eight biotech companies listed in the S&P 500 has grown by US$130 billion to just over US$600 billion.

Drinking from the firehose: 

  • Amazon will make permanent 70 per cent of the new 175,000 U.S. positions it made during the pandemic. 
  • Twenty-seven U.S. companies sought creditor protection in May, the highest monthly number since May 2009 during the last recession. 
  • The U.S. relief-funding program has distributed more than US$100 million to firms that have avoided paying taxes, according to an analysis by Reuters. 
  • Car maker Nissan is shuttering its Barcelona plant and plans to cut capacity by 20 per cent overall after reporting US$6.2 billion in losses for its latest fiscal year. 
  • HP reported a seven per cent drop in laptop and desktop computer sales for its second fiscal quarter, its biggest drop in four years, despite more people working from home. 
  • LinkedIn data suggests global hiring has stabilized in the last six weeks after a precipitous drop in March. 
  • Uber sent thousands of e-bikes and e-scooters to scrap yards, inviting criticism that the company should have donated them. Lime acquired Uber’s scooter and bike division earlier this month, giving the new owner rights to its intellectual property, which Uber said is why it couldn’t repurpose the vehicles. 

Postcard from Hong Kong: Xania Wong returned to Hong Kong from Myanmar in late February, as COVID-19 approached pandemic status. Despite mounting global panic around the virus at the time, there was a relative calm over the region. Tensions between Beijing and Hong Kong—triggered last June by plans to allow extradition to mainland China—had quieted while China focused on the social, economic and health crises ravaging the country. The impacts of the virus in Hong Kong were less severe—to date, there’s been just over 1,000 cases and four deaths, and most businesses have remained open. But physical-distancing rules prohibiting gatherings of more than four people (since increased to eight), had put protests on pause. 

Wong, an entrepreneur juggling multiple companies, has kept going to the office throughout the pandemic. “People have the option to work from home, but we never had a real lockdown,” she said. With some of her work being global, however, Wong’s business has been affected. Her wine company has cancelled events and tastings; growth in Open Financial, her startup that provides financial management services and credit scores for small businesses seeking investments, has been stunted as brick-and-mortar merchants close shop. At the same time, the pandemic has created interest among a new clientele, said Wong. “In emerging markets, their credit crunch is being amplified by COVID-19, and their governments have fewer subsidies—there’s an increasing need there to borrow or get credits, so we’re seeing interest increase around that.” 

In Hong Kong, meanwhile, tensions with China are resurfacing over a national security law Beijing intends to impose on the region. Some businesses that had remained open throughout the pandemic are now closing to limit potential damage from protests. “It’s obviously not good for the Hong Kong economy, but people have the right to express their views,” said Wong, who passed heavy police presence on her way home from work on Wednesday. “Half the shops in the mall were closed when I walked through, and they were closing the entrances,” she said. “The protests hadn’t started at that point; they were just getting ready.”

Share the full article!
Send to a friend


Thanks for sharing!

You have shared 5 articles this month and reached the maximum amount of shares available.

This account has reached its share limit.

If you would like to purchase a sharing license please contact The Logic support at [email protected].

Want to share this article?

Upgrade to all-access now


Around the world: The U.S. House of Representatives allowed lawmakers to cast votes by proxy for the first time this week. On Thursday, the House approved changes to the business relief program, now giving businesses 24 weeks to spend the aid instead of eight as originally designed, while also extending the program through the end of the year. Researchers say a wastewater analysis could be key in preventing a second surge of the virus. The European Commission is looking to create a permanent reserve of essential drugs and medical equipment. Finland said reopening schools this month did not increase the spread of the coronavirus. In Switzerland, sex workers can resume work from June 6 while sports remain closed. The English Premier League will restart its season on June 17. The Boston Marathon has been cancelled for the first time in its 124-year history. 

A fizz-cal crisis: With restaurants and bars closed and little cause for celebration, champagne sales are forecast to drop this year by a third, or 100 million bottles.

* We’re emphasizing new cases, rather than running totals, because “flattening the curve” is when each day’s new cases are fewer than those of the previous day. The percentage increase is determined based on how today’s cases compare to a rolling seven-day prior average. Numbers may also vary based on countries’ individual testing capacity and reporting.


Our reporting team is working tirelessly around the clock to deliver the very latest information on the COVID-19 crisis. If you like our journalism, please consider subscribing. You can get a subscription today for more than $100 off your first year.