Canada's 2 big banks' earnings surprise

Royal Bank said its third-quarter net income was $1.26 billion Canadian dollars ($1.2 billion). The bank said its net income was down 10 percent from a year ago because of write-downs, which reduced income by $263 million Canadian dollars ($249 million) after tax or C$498 million ($473 million) before tax, and increased provisions for bad loans at its U.S. banking business.

RBC Financial said its Canadian banking business had a net income of C$709 million ($673 million), up 19 percent from the third quarter of 2007, thanks to strong growth across all its business lines and cost cutting.

The bank's wealth management business also had higher profit. Wealth Management net income was C$186 million ($176 million), up 5 percent or C$9 million ($8.5 million) over last year on higher fee-based revenue, including the contribution from recently acquired Canadian money management company Phillips, Hager & North.

When the financial results are adjusted to take out one-time items, cash earnings per share came in at about C$1.14 ($1.1). That was well above analysts' forecasts of roughly $1.05 (99 cents) per share.

TD said Thursday its quarterly dividend rose to 61 Canadian cents from 59 cents per common share, an increase of 3.4 percent.

TD Bank Financial Group said its profit for the third quarter was C$997 million ($948 million), down 9.6 percent from the same time last year, but fueled by strength in its retail operations.

TD Canada Trust, its main Canadian retail operation, posted record earnings of $644 million ($612 million) in the third quarter, up 8 percent over the same period last year.

"The increase this quarter demonstrates the board's confidence in the strength and stability of our earnings as we head into 2009," Ed Clark, TD's president and chief executive officer, said in a statement.

TD said the overall profit decline was due to problems at its wholesale banking unit, where net income fell to C$37 million ($35 million), down 85 percent from the prior year. The $216-million ($205 million) decline in the wholesale banking net income offset increases in other parts of TD's operations.