Page 10 - Newcom

10 | INVESTMENT EXECUTIVE NEWS February 2020 Uncertainty in financial markets affected the brokerages
> CONTINUED FROM PAGE 9
■■ property & casualty
and mortgage insurers.
Four of the five companies in this category had lower net income and Echelon Financial Holdings Inc. was in a loss position.
Only Co-operators General Insurance Co. and Echelon had underwriting losses. Fairfax Financial Holdings Ltd.’s and Intact Financial Corp.’s were pulled down by losses on the fair value of investments. This was particularly so for Fairfax,
as it is an aggressive investor. It had US$96.7 million in fair value losses vs a gain of US$41.2 mil- lion the year before. Intact had losses of $38 million this quar- ter vs $24 million a year earlier. ■■ mutual fund and investment-management
companies. Brookfield and Sprott Inc. were the only two of eight companies (including IGM) in this category with an increase in net income, and they were huge: 86.6% and 189.8%, respectively.
Brookfield is involved in infra- structure projects, real estate,
renewable power and private equity; large changes can occur in the fair value of these assets. In this quarter, there were US$394 million in fair value changes vs US$132 million in Q3 2018. The company had a big jump in assets under management, to US$510.6 billion from US$354.7 billion, as well as a jump in equity account- ing income to US$414 million from US$50 million.
Sprott had a $791,000 gain on proprietary and long-term investments in the quarter vs a $4.9-million loss a year earlier.
Fiera had a small loss vs posi- tive net income a year earlier and Guardian Capital Group Ltd.’s earnings were down by 74.5%. Neither drop is alarming. Fiera continues to grow by acquisition and it will take time for those acquisitions to reflect in earn- ings. Guardian’s results are heav- ily influenced by the value of its large holding of shares in BMO. That holding lost $4 million in value in the quarter vs a gain of $18.4 million a year earlier.
The three big independent mutual fund companies each reported net redemptions in the quarter: AGF, at $103 million; CI Financial Corp., at $1.5 billion; and IGM, at $1 billion.
■■ brokerages. Given the uncertainty in financial mar- kets, it’s not surprising that Canaccord Genuity Group Inc. and Oppenheimer Holdings Inc. saw earnings drop and GMP reported a loss.
■■ exchanges. TMX’s net income was up by 7.3% as revenue rose a little while expenses were a bit lower.
■■ holding companies. Dundee Corp. remained in a loss position; Desjardin Group’s net income was unchanged; and Power Financial’s earnings rose as the increase at GWL offset the lower net income at IGM. IE
N/A = not applicable
NA = not available because the com-
pany has negative shareholders'
equity
NC = not calculable because
FINANCIAL SERVICES PROFIT SURVEY
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPT. 30, UNLESS OTHERWISE NOTED
BANKS
ASSETS
REVENUE
NET INCOME ($MIL.) % CHG. 1,553 -9.2 2,372 1.7 1,182 -7.3 73 7.0 55 14.9 39 19.7 150 -24.2 45 -12.1 612 7.6 3,206 -1.5 2,998 0.4 5 4.7 12,291 -1.9
NET INCOME ($MIL.) % CHG. 2.6 -15.3 4.8 -43.9 98.0 N/A 60.6 16.6 14.6 32.2 13.9 1.5 194.4 N/A
NET INCOME ($MIL.) % CHG. 110 -3.0 808 5.9 176 2.9 615 -67.7 782 -11.9 2,491 -35.1
NET INCOME ($MIL.) % CHG. 12.4 -3.5 -0.7 N/A 74.4 -50.1 198.0 -4.3 111.1 -13.1 395.2 -20.5
NET INCOME ($MIL.) % CHG. 14.4 -10.9 1,756.0 86.6 138.8 -12.3 -0.3 N/A 9.0 -74.5 202.5 -6.7 5.7 189.8 -0.1 N/A 2,126.0 54.8
EPS ($)2
’18 ’19
0.09 0.12 0.15 -0.21 0.36 0.29
EPS ($)2 ’18 ’19 1.02 1.09
NET INCOME ($MIL.) % CHG.
570.0 0.0 -29.7 N/A 981.0 10.1 1,521.3 8.2
EPS ($)2 EFFICIENCY ’18 ’19 ’18 2.60 2.34 55.7 1.79 1.77 52.9 2.81 2.56 56.8 0.72 0.77 46.7 2.80 3.18 36.5 0.41 0.67 52.9 0.38 0.28 54.1 1.15 0.99 68.0 1.53 1.69 52.0 2.20 2.18 57.2 1.59 1.62 56.5 0.21 0.23 46.5 55.6
RATIO (%)3 ’19 58.6 52.1 55.9 48.2 39.5 51.3 56.9 72.0 50.3 56.3 56.0 45.3 55.4
CASH FLOW4 ($MIL.) % CHG. 18,152 351.3 4,065 -77.8 5,972 N/A -32 N/A 19 N/A 157 N/A 686 -68.5 -222 N/A 5,459 743.7 11,077 N/A -1,847 N/A 32 97.9 43,519 155.4
-4.55 -0.60 0.61 -1.31 -0.69 0.23
CF/SHARE2
’18 ’19
24.23 29.53 2.62 1.28 4.96 -1.61 2.65 2.86
1.33 0.21
CASH FLOW4 ($MIL.) % CHG. 212.2 67.4 2.4 -90.4 715.8 -45.8 686.0 24.3 202.3 48.9 1,818.7 -15.8
CF/SHARE2
’18 ’19
0.24 0.27 -0.37 1.05 0.73 0.55 0.28 0.55 0.61 0.81 1.00 1.02 0.06 0.12 0.04 0.02
ROE (%)5
’18 ’19
15.0 11.8 10.5 N/A 8.0 6.4 11.4 5.1
ROE (%)5 ’18 ’19 7.3 7.9
CF/SHARE2 ’18 ’19
NC NC -0.01 -0.01 3.44 1.62
ROE (%)5 ’18 ’19
13.5 13.6 14.5 13.9 16.8 15.1 11.0 10.9 14.6 14.7
6.9 7.6 14.4 11.7 10.2 7.4 18.4 17.1 17.2 16.6 15.7 15.5
8.5 8.9 15.6 15.0
ROE (%)5 ’18 ’19
11.7 11.7 1.0 N/A N/A 9.6 34.4 32.6 14.1 13.1 7.5 7.7 1.4 8.5
ROE (%)5 ’18 ’19
9.8 3.5 14.1 13.4 12.3 11.9 6.7 11.3 11.2 12.3 9.8 12.0
ROE (%)5 ’18 ’19
2.8 6.6 3.4 N/A 5.5 6.5
10.5 10.4 12.8 9.9 7.9 8.1
ROE (%)5 ’18 ’19
8.0 5.6
11.4 14.1 43.0 37.6 2.3 -0.2 15.3 3.3 17.4 21.9 6.8 5.9 NA NA 12.0 15.4
ROE (%)5 ’18 ’19
7.4 7.7 N/A N/A 12.4 13.1 8.9 9.7
($BIL.) Bank of Montreal (Oct. 31)1 852 Bank of Nova Scotia (Oct. 31)1 1,086 CIBC (Oct. 31)1 652 Canadian Western Bank (Oct. 31) 31 Equitable Group 28 Home Capital Group 19 HSBC Bank Canada 112 Laurentian Bank (Oct. 31)1 44 National Bank (Oct. 31)1 281 Royal Bank (Oct. 31)1 1,429 TD Bank (Oct. 31)1 1,415 VersaBank (Oct.31) 2 Subtotal 5,951
FINANCE COMPANIES
% CHG. ($MIL.) 10.2 6,164 8.8 7,968 9.1 4,820 8.3 221 19.0 128 5.9 117 7.7 534 -3.4 242 7.2 2,008 7.1 11,821 6.0 10,376 -1.3 14 7.8 44,412
% CHG. 3.4 7.0 7.5 5.9 23.5 11.0 -9.2 -5.6 7.0 9.2 2.1 -1.4 5.7
ASSETS
REVENUE
EPS ($)2 CASH FLOW4
CF/SHARE2 ’18
($BIL.) Accord Financial1 0.4 ECN Capital (US$)1 1.6 Element Fleet Management1 17.9 FirstNationalFinancial6 37.2 MCAN Mortgage 2.2 Timbercreek Financial6 1.7 Subtotal 61.1
LIFE INSURERS
% CHG. ($MIL.) 26.0 15.3 -32.9 64.3 2.0 245.8 4.6 177.6 0.5 21.1 -7.1 25.1 -30.8 549.2
% CHG. 16.6 -20.3 11.1 15.8 33.1 2.0 7.9
’18 0.33 -0.18 -0.85 0.85 0.47 0.17
EPS ’18 22.08 75.30 1.50 0.77 0.95
EPS ’18 0.48 0.02 3.34 1.39 1.42
EPS ’18 0.20 0.11 0.62 0.03 1.21 0.82 0.01 0.00
’19 ($MIL.) 0.33 5.6 0.01 -54.3 0.20 44.4 1.00 277.5 0.60 10.5 0.17 20.1 303.9
% CHG. N/A N/A -81.7 N/A N/A 7.5 N/A
’19 0.69 -0.23 0.08 4.62 0.44 0.23
ASSETS
REVENUE
% CHG. ($MIL.) % CHG. -3.0 571 94.3 3.9 14,374 19.5 4.0 3,716 87.6 0.5 22,629 181.4
($)2 CASH FLOW4
($BIL.) 9 534 54 646 883 Subtotal 2,125
’19 ($MIL.) 23.26 141 78.50 1,271
1.59 -167 0.35 5,561 1.19 193 6,999
% CHG. 11.4 -51.3 N/A -1.5 -82.7 -30.4
E-L Financial Great-West Lifeco1,7 iA Financial Group1 Manulife Financial Sun Life Financial1
7.5 9,616 4.3 50,906
REVENUE
60.3 79.6
PROPERTY & CASUALTY AND MORTGAGE INSURERS
ASSETS
($)2 COMBINED RATIO (%)8 ’19 ’18 ’19 0.42 104.1 103 -0.04 115.4 113.1 2.04 97.6 97.5 1.34 93.8 92.3 1.29 32.4 37.8
($)2 CASH FLOW4
($BIL.) 7.3 0.1 69.7 30.1 7.1 Subtotal 114.3
% CHG. ($MIL.) 10.8 886.5 -78.4 9.2 8.3 4,925.9 5.5 2,828.0 1.9 222.3 6.7 8,872.0
% CHG. 12.4 15.6 10.9 5.5 -4.7 8.8
Co-operators General Insurance Echelon Financial Holdings Fairfax Financial Holdings (US$) Intact1
MUTUAL FUND AND INVESTMENT-MANAGEMENT COMPANIES
ASSETS UNDER MGMT.
Genworth MI Canada
Desjardins Group doesn’t have common shares
Unusual, non-recurring items have been excluded where possible. In some cases, these figures have been estimated Per-share data are fully diluted except when there is a loss or negative operating cash flow in either this quarter or the corres- ponding quarter a year earlier, in which case the number of basic shares is used in the calculation Calculated as non-interest expenses excluding amortiza- tion as % of revenue (excluding insurance revenue). Unusual expenses (such as for legal settlements) and unusually high revenue items (such as write- downs or large gains or losses from financial instruments) are excluded from the calculation Operating cash flow after change in non-cash working balances
Calculated using net income excluding unusual, non-recurring items for the past 12 months as % of average of beginning and ending shareholders’ equity First National Financial Corp.’s and Timbercreek Financial Corp.’s net income includes comprehensive income Great-West Lifeco Inc.’s and IGM Financial inc.’s results are con- solidated with Power Financial Corp.’s results
Calculated as losses and operat- ing expenses as % of net earned premiums
($BIL.) AGF Management (Aug. 31)1 37.4 Brookfield Asset Mgmt. (US$) 510.6 CI Financial 130.0 Fiera Capital1 164.7 Guardian Capital Group 30.2 IGM Financial1,7 162.5 Sprott 11.3 Stone Investment Group 0.5314 Subtotal 1,047.3
BROKERAGES
% CHG. -3.6 43.9 -6.2 14.8 3.6 1.8 12.5 1.7 19.7
($MIL.) 107.4 17,875.0 527.5 160.0 46.0 816.1 26.7 2.6 19,561.2
% CHG. -7.9 20.3 -7.3 16.7 7.5 -1.9 49.1 393.5 18.0
’19 ($MIL.) 0.18 21.8 0.91 1,898.0
0.60 127.7 0.00 55.2 0.31 22.7 0.85 242.6 0.02 30.4 0.00 0.4 2,398.9
% CHG. 9.8 298.7 -26.6 93.9 25.7 -0.4 109.3 -61.3 145.9
REVENUE
1 2
3
4 5
REVENUE
NET INCOME ($MIL.) % CHG. 15.7 -12.9 -13.8 N/A 3.9 -22.1 5.8 -82.9
REVENUE
% CHG. ($MIL.) % CHG.
CASH FLOW4 CF/SHARE2 ($MIL.) % CHG. ’18
-79.1 N/A 0.93 -38.8 N/A 0.64
60.9 -43.1 7.56
($MIL.) 270.7 9.1 234.8 Subtotal 514.6
% CHG. -9.8 43.6 -1.3 -5.4
’19 -0.60 -0.57 4.40
Canaccord Genuity Group1 GMP Capital1
Oppenheimer Holdings (US$)
STOCK EXCHANGES
TMX Group
HOLDING COMPANIES
Desjardins Group
Dundee
Power Financial1
Subtotal 780.0
NET INCOME
-57.1 N/A
CASH FLOW4 CF/SHARE2
6
7
8
Source: Company reports
($MIL.) 196.3
($BIL.)
1.8
ASSETS % CHG.
5.8 -25.8 4.0 4.7
61.7 7.3
REVENUE ($MIL.) % CHG.
4,986.0 22.6 7.9 -32.7 15,158.0 18.5 20,151.9 19.5
($MIL.) 96.9
’18
NC -0.92 0.80
% CHG. ’18 ’19 -3.5 1.79 1.71
EPS ($)2 CASH FLOW4
312.7 0.7 466.6
’19 ($MIL.)
NC 1.0 -0.30 0.0 0.88 1,470.0 1,471.0
% CHG.
-99.9 N/A -47.0 -64.5