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A drop in its U.S. and Canadian retail businesses dragged down the bank’s earnings, which rose 24 per cent in total compared to the same quarter last year. Increased non-interest expenses and more money for potential loan losses also dampened profits. Meanwhile, National Bank joined other major Canadian lenders in beating analysts’ profit estimates: the country’s sixth-largest bank posted a 12 per cent increase in adjusted net income. (Financial Post)

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Talking point: The two banks wrap what was a generally strong first-quarter for the Big Six on the heels of the worst year for Canadian banks since the financial crisis. Across the board, their earnings were boosted by strong growth in their capital markets divisions. That’s largely a reflection of the strength of the financial markets at the time, and doesn’t necessarily signal longer-term improvements. Banks are under more pressure to invest in technology and at a time when credit risk is growing amid low interest rates and threats of an economic slowdown. Between the strong profits this season, banks earnings showed signs of headwinds: CIBC took a $339-million restructuring charge mainly to cover severance packages for the 2,200-plus employees it’s laying off, and three of the Big Six—TD, Scotiabank and BMO—have set aside more money for anticipated credit losses.

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A survey of responses from 8,337 retail banking customers over August and September by J.D. Power found America’s favourite bank is Canada’s second-largest lender. (Bloomberg)

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Talking point: For over a decade, TD has touted itself as “America’s most convenient bank.” It services over nine million customers through 1,250 locations in the United States, offering its U.S. customers digital banking “while excelling at branch service and online banking satisfaction,” J.D. Power said in a statement. Those qualities saw it beat out American competitors like JPMorgan, Capital One, Wells Fargo and Bank of America for the first time since the survey was launched in 2017. TD didn’t make it in the top 10 banks in the study’s previous years. Last month, it was designated a globally systemically important bank.

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TD reported $2.86 billion in net income for the fourth quarter, down about four per cent from last year. CIBC earned $1.19 billion, a six per cent drop. (The Logic)

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Talking point: The big banks are facing a series of macroeconomic challenges, including a growing number of potentially sour loans—something both CIBC and TD cited as partially responsible for their income dips. Banks are looking at cutting costs in response. TD reported a $154-million restructuring charge Thursday; earlier this week, RBC said it spent $113 million on severance and BMO reported a $484-million charge as part of a five per cent staff cut. CIBC did not report a restructuring charge Thursday, but CEO Victor Dodig said the bank is looking at improving efficiencies and simplify operations, which “could potentially require a charge down the line in order to accelerate our progress.”

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The country’s second-biggest lender has joined RBC in being considered a global systemically important bank (G-SIB), meaning it must hold extra capital. TD was added at the lowest tier of the Financial Stability Board’s list, which was introduced after some lenders needed bailouts during the 2008 global financial crisis. (The Logic)

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Talking point: In March 2013, the federal Office of the Superintendent of Financial Institutions named the six largest Canadian banks as domestic SIBs. These banks are subject to a capital surcharge, the statutory bail-in regime, more supervision, recovery and resolution planning and increased disclosure. TD is the 30th financial institution to be added to the global list, and is the world’s 27th largest bank in terms of total assets. JPMorgan Chase tops the ranking.

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The filing comes after the company struggled to find a buyer and repay its debt. It will sell ProFlowers, an online flower delivery company, for US$95 million. It’s selling U.K.-based Interflora for US$59.5 million. (Bloomberg)

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Talking point: FTD is the latest casualty of internet disruption in the retail industry. Sears, which was the world’s largest retailer just 50 years ago, filed for bankruptcy in 2018 after it failed to compete with the discounts provided by online-shopping websites, and brick-and-mortar competitors like Walmart, which invested in e-commerce. Walmart has also implemented scan-and-go apps and one-day shipping to compete with Amazon. In 2014, FTD purchased the parent company of ProFlowers, once one of its competitors, for over US$400 million to boost its e-commerce segment. However, it struggled to integrate the two businesses.

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The Financial Data Exchange (FDX), a non-profit looking to get fintechs and banks to agree on a data-sharing standard, launched in Canada with 31 financial institutions as partners. (The Logic)

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Talking point: An agreed-upon common standard is a key step to allow open banking in Canada. The FDX’s standard is designed to be secure, interoperable and royalty-free. Fintechs and banks have been clashing about the details of an open banking framework for several years. In May, the federal government’s open banking review was delayed until the fall, a move Borrowell CEO Andrew Graham described as “worrying.” Some Canadian fintechs, including Flinks and Koho, have joined the FDX’s consortium. However, it’s executives from RBC and Interac who are joining the board of directors, which also includes U.S. banks. Similarly, TD and Interac execs will co-chair the working group of Canadian members.

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The Japanese technology investment group is using the sale to buy back up to 45 per cent of its outstanding shares, after its stock price plummeted over the past month. News of the buyback sent the stock up 18.61 per cent on Monday. (The Wall Street Journal)

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Talking point: The announcement is a sharp escalation of the firm’s earlier plans to buy back up to seven per cent of its shares. It follows pressure from activist investor Elliott Management for SoftBank to take steps to boost its share price amid the market selloff. It’s already scaled back some investment plans to stabilize its finances, including possibly backing out of the US$3 billion in bailout funding promised to WeWork in the wake of the office-share company’s meltdown late last year. The firm didn’t say which assets it’s considering selling, but analysts told The Wall Street Journal that its massive stakes in companies like Alibaba and in SoftBank Corporation, one of Japan’s largest cellphone carriers, are likely candidates.