Mortgages help boost banks' bottom line
Canada's banks have shown better-than-expected results in the first quarter of 2010, with reports pointing to mortgages as a profit-boosting factor.
The Financial Times said the "unexpectedly robust" first-quarter earnings - a combined net income of $5 billion among the top five banks - were due to an increase in mortgage lending and other domestic business. An example is Scotiabank, which said it has seen residential mortgages increase by $4 billion since October 2009. The bank saw a total net income of $988 million in the first quarter of 2010.
"This quarter's results benefited from growth in mortgages, lines of credit and personal deposits, in particular our high interest savings and chequing accounts," said Scotiabank president and CEO Rick Waugh in a statement. "The year-over-year increase also came from higher net interest income as margins improved."
Other banks that saw growth in retail business included Toronto-Dominion, which saw record earnings of $720 million in Q1, up 23 per cent from last year. The bank's real-estate secured lending and personal business deposits also saw particularly strong volumes. Bank of Montreal reported net income of $657 million, with over $400 million of that from Canadian personal and commercial banking, an increase of 28 per cent from a year ago.