The bank's earnings reports from are so straightforward, clear, honest and detailed, that investors don't need a financial analyst to interpret them and cut through all the hype.
With a little help from improving loan-loss provisions and a lower tax bite, EPS rose 11.6% to $2.12 per share.
It managed to do that on just a 1.8% rise in revenues and a continued challenging interest rate environment that allowed net interest margin of only 1.85%, slightly up from last year's 1.82%.
Return on equity was a stellar 22.3%, also a slight improvement over last year. Return on average assets remains weak, as with all the Canadian banks, at 0.89%, though that also was up from last year's 0.84%.
Despite a weaker Canadian currency, the company raised this quarter's dividend 9.8% to $0.96 and there was a nice improvement in the already excellent dividend payout ratio from 47.4% last year to 44.2% this year.
With the dividend rising, it's even nicer to see the payout ratio falling. That means the company has plenty of money left to grow and to raise the dividend further later.
I'm very happy with this holding and plan to own it a long time and make a lot of money with it. Incidentally, the company was again named the strongest bank in North America and the third strongest in the world by the Bloomberg annual survey. Buy up to $85.
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