TSX Drops Despite Strong Bank Results

 @ibtimes on August 27 2009 1:24 PM

RTTNews - Canadian stocks took a turn for the worse Thursday morning as strength among financial stocks has been offset by widespread weakness in other sectors.

The S&P/TSX Composite Index was down 50 points at 10,860, giving back some of its this week's gains.

Resource stocks have come under heavy pressure as commodity prices dropped. Oil fell below $70 briefly, driving energy shares lower by 1.8 percent. Metals stocks dropped 2.1 percent.

Among financials, Royal Bank (RY.TO) surged 6 percent. The company reported third-quarter net income of C$1.56 billion or C$1.05 per share, compared to C$1.26 billion or C$0.92 per share in the same quarter last year.

TD Bank (TD.TO) was up 2 percent after it reported a decline in third-quarter profit, hurt by several charges. Excluding items, profit increased from the previous year, on higher earnings contributions from the wholesale banking and Canadian personal and commercial banking segments.

National Bank (NA.TO) on Thursday reported a 6% year-over-year increase in profit for the third quarter, aided by a 7% growth in revenues as trading revenues surged. Results were boosted by strong operational results at financial markets segment.

Canadian banks have largely managed to evade the global slump that has slapped the U.S. financial firms. Canada is the only nation in the group of seven industrialized nations that has not bailed out its banks since the onset of the financial crisis. Strict capital requirements, conservative lending policies and periodic regulatory reviews have contributed to the stability of Canada's financial system.

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