E228 – Decoding Q2 Canadian Bank Earnings

BMO ETFs: Views from the Desk

In this special episode, Sohrab Movahedi, Chris Heakes, and Daniel Stanley break down the second quarter earnings from Canada’s “Big Six,” recapping the recent results and ongoing challenges. They also discuss loan-loss provisions, central bank policy, and reasons for a more optimistic outlook.

Daniel Stanley is the Managing Director and Co-Head of Institutional Distribution at BMO Global Asset Management. He is joined on the podcast by Chris Heakes, Portfolio Manager and ETF Specialist, BMO Global Asset Management and Sohrab Movahedi, Managing Director, Financials Research, BMO Capital Markets. This episode was recorded on Monday, June 10, 2024.

ETFs mentioned in the podcast:

• BMO Equal Weight Banks Index ETF (Ticker: ZEB)
• BMO Covered Call Canadian Banks ETF (Ticker: ZWB)
• BMO Equal Weight US Banks Hedged to CAD Index ETF (Ticker: ZUB)
• BMO Equal Weight US Banks Index ETF (Ticker: ZBK)

Looking back to the past five rate cut experiences as a guide, in the six months following the first GIC outflow, the S&P TSX Bank Composite Index has tended to outperform the S&P TSX Composite by an average of ~1,100 basis points. BMO Capital Markets, as of June 10, 2024.

The average yield for Canadian Banks was 5%, BMO Global Asset Management and Bloomberg, as of Monday, June 10, 2024.

Disclaimers:

Standard Deviation: A measure of risk in terms of the volatility of returns. It represents the historical level of volatility in returns over set periods. A lower standard deviation means the returns have historically been less volatile and vice-versa. Historical volatility may not be indicative of future volatility.

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