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moneysense.ca, 1/06/05
Bank Earnings, Part II
With Scotia Bank reporting earnings yesterday, all the five big Canadian banks have completed the recent round of earnings reports. Here is a summary of the last three reports:
Scotia Bank: $0.81/share up 8%
Royal Bank: $1.37/share up 20%
TD Bank: $0.86/share up 16%
Royal Bank increased its quarterly dividend from $0.55 to $0.61 and Scotia Bank did the same increasing from $0.32 to $0.34. TD Bank is also in talks with Ameritrade about a possible merger of its Waterhouse unit. The strong bank earnings show that it is better to own the banks than keeping money in them.
(FD: I own shares in TD Bank).
moneysense.ca, 1/06/05
First time I heard that was from a comedian, so I investigated, went out and bought Bank of Montreal and TD shares (3.5 years ago), just for the dividends! Nice surprise that they can gouge consumers and raise their value at the same time.
–c8j
Big Cajun: Financials usually pay a fat dividend (that usually increases nicely over time). I disagree that they gouge consumers. In a free market goods and services are sold at prices the market will bear. As consumers we have a choice to be smart and keep free checking accounts. And as investors we can buy these cash flow machines. Ain’t capitalism sweet?
“In a free market goods and services are sold at prices the market will bear.”
That’s funny. There are plenty of cases where this is not true.
Anon: Can you give me an example? The point I am trying to make is there are options for free checking (like President’s Choice), but most Canadians still pay fees to maintain an account with the big five. Just imagine if a majority of consumers start migrating to free checking. Banks would immediately respond by lowering fees or offering free iPods. Of course, this is only true in a free market.
monopolies, oligopolies, price fixing, deceptive advertising, duties, trade restrictions, etc. all affect what you pay for good and services. The point I’m trying to make is that there is not always full competition in all markets at all times, hence gouging the consumer will take place.