Briefly:

(August 27, 2004) Royal Bank of Canada has released its latest quarterly earnings report, showing a slight, 1% dip in profits, at $768 million based on U.S. generally accepted accounting principles (GAAP). Under Canadian GAAP, profits were off 5% at $746 million.

The earnings decline comes as increases in total revenues, which were up $103 million or 2%, were countered by “higher variable compensation costs due to greater capital markets-related revenues, higher benefit costs and costs of the Rabobank settlement in the first quarter,” RBC said.

“Our performance this quarter reflected continued strong asset quality, solid growth in loans and deposits and higher revenues from insurance and mutual funds but, also reflected continued spread compression on deposits and higher benefit costs,” said Gordon M. Nixon, President & CEO.

RBC Investments’ Canadian mutual fund assets grew by 17%, year-over-year, while assets in the Canadian and U.S. full-service brokerage businesses rose by 11% and 12%, respectively.

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CSI teams up with U.S. technical designation provider

August 27, 2004) The Canadian Securities Institute (CSI) has teamed up with American-based Market Technicians Association (MTA) to assist students working towards the Chartered Market Technician (CMT) designation.

“A recent survey of our students indicates a strong interest in advanced technical analysis education and this new partnership is responding to that feedback,” said Roberta Wilton, CSI’s president and CEO. “By having MTA recognize our training, Canadian students now have a direct path carved out to become technical analysis specialists.”

Students who complete CSI’s Technical Analysis Course will qualify for an exemption from the CMT Level 1 Exam, allowing them, upon becoming members of the MTA, to proceed directly to the CMT Level 2 Exam. Candidates are required to complete all three levels of the CMT program and also have relevant work experience.

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Jovian unveils small profit

(August 27, 2004) Jovian Capital Corporation has announced quarterly earnings of $100,000 on total revenues of $14.7 million.

“After a very busy year, acquiring a number of key companies, management is focusing on making sure our portfolio of companies is well positioned to grow in a very unpredictable environment,” says Philip Armstrong, Jovian president and CEO.

The firm said revenues fell as a result of weaker than expected transaction revenue in its investment dealer’s retail division, due to continued equity market uncertainty and retail seasonality.

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TD announces earnings, acquires stake in Banknorth

(August 26, 2004) TD Bank Financial Group came out with two major announcements today, reporting quarterly profits of $584 million and purchasing a majority stake in a regional U.S. bank.

TD also boosted its common share dividend to 36 cents per quarter.

“We have now seen several quarters of asset growth in our advice-based businesses, affirming the success of our integrated wealth management strategy,” said W. Edmund Clark, TD Bank Financial Group president and CEO. “But soft markets caused many investors to stay on the sidelines for much of the quarter, impacting our discount brokerage business.”

In addition, TD announced that it was acquiring a 51% stake in Portland, Maine-based Banknorth for $3.8 billion US. Banknorth has assets of nearly $30 billion US and more than 300 branches in the New England area.

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McLean Budden tapped to advise U.S. social fund

(August 26, 2004) Citizens Advisors — the investment advisor to U.S. socially responsible fund firm Citizens Funds — has selected Toronto-based McLean Budden as sub-advisor for the Citizens Global Equity Fund.

“McLean Budden is a great global manager,” said Sophia Collier, Citizens’ president. “We are pleased to give our shareholders access to a proven global investment strategy that has previously been unavailable to individual shareholders in the United States.”

“With McLean Budden, I believe we’re adding valuable talent that’s committed and capable of seeking to improve upon the fund’s performance in the years ahead,” added Collier.

The Citizens Global Equity Fund is a no-load products with assets of $104 million US.

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AGF hires vice-president of sales

(August 26, 2004) AGF Funds has announced the appointment of Rose Cammareri as senior vice-president, national advisor sales.

“Rose is one of the top sales leaders in Canada,” said Randy Ambrosie, executive vice-president, sales and marketing, AGF Funds. “As AGF reinforces its vision to be the first choice among investment advisors, Rose will play a key role in implementing strategies that maintain and significantly build on our customer base.”

Cammareri joins AGF with more than 17 years experience in business development. Most recently, she was vice-president, national sales director at CIBC Asset Management and previously worked in the sales department of Merrill Lynch.

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Nearly 1,000 Canadians pass CFA exam”

(August 25, 2004) Nine hundred and sixty-four Canadians passed level three of the Chartered Financial Analyst (CFA) exam, the CFA Institute announced today. The pass rate in Canada was 59%, compared to 64% in the U.S., where 3,720 individuals passed. Worldwide, 8,669 of the 13,500 prospective CFAs who wrote the test in June were successful.

The bulk of the Canadian exam-sitters — more than 500 — were in Ontario, where the pass rate was 55%, which has historically been the average pass rate for all three exams. About 200 people took the exam in Quebec and around 100 wrote in both British Columbia and Alberta.

Completion of the CFA program requires candidates to pass three six-hour exams, and work in the investment industry for at least three years. Those meeting all the requirements will begin receiving their CFA charters in October.

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Strong quarterly profits for CIBC

(August 25, 2004) Earnings reports continue to roll in from Canada’s major banks, with CIBC announcing profits of $620 million in the latest quarter, down from $788 million a year ago. Last year’s profit included a massive $475 million recovery of overpayment of income taxes.

“Strong third quarter results reflect continued progress against our four key business strategies,” said John S. Hunkin, CIBC’s president and CEO. “An ongoing, disciplined focus on these strategies will be key to CIBC achieving its overarching objective of sustainable growth.”

The bank also announced a dividend of 60 cents per share on common shares for the quarter ending October 31, 2004, payable on October 28, 2004.

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BMO unveils record profits

(August 24, 2004) The Bank of Montreal has announced a second quarter profit of $654 million, up 30% from a year ago and a new record for the company. A big part of that gain came from a $110 million net recovery of credit losses, compared with a specific provision of $90 million last year.

“Our net income continues to grow strongly,” said BMO CEO Tony Comper in a statement. “We have increased earnings for the ninth consecutive quarter and, although improving credit performance was a significant contributor to results, our strengths were broadly based.

Comper said that BMO’s personal, commercial and investment banking groups contributed their highest quarterly earnings ever and the private client group was also strong, despite some recent softening in the equity markets.

The bank credited higher mutual fund revenues and lending fees as well as higher securities commissions from Harris Nesbitt Gerard for boosting non-interest revenues to $1.1 million, up 3% or $37 million.

BMO also announced it would boost its common share dividend by four cents per share to 44 cents per quarter, starting in the fourth quarter, payable November 29, 2004.

BMO is the first of Canada’s big five banks to report third quarter results — the others will follow later this week and into next week.

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HSBC Securities fined over minor compliance issues

(August 24, 2004) HSBC Securities (Canada) has agreed to a fine of $625,000 for deficiencies with its trade desk compliance and supervision of trading obligations. HSBC’s conduct contravened the Universal Market Integrity Rules, by failing to properly oversee trading by the company’s directors, officers, partners and staff, according to a release from Regulation Services (RS).

“Although no harm to investors occurred, the firm did not appreciate the importance of these duties in preventing risk to both the firm, its clients and to the capital markets,” said Maureen Jensen, vice-president, market regulation, at RS.

RS says its repeated warnings over insufficient oversight went unheeded by HSBC management and board of directors.

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One Financial launches new hedge fund index notes

(August 23, 2004) One Financial has launched the One Financial MSCI Hedge Invest Index Notes, Series 2, a note linked to a broadly diversified index of 97 hedge funds, with 100% principal guarantee at maturity.

“Index-based investments have been available in the stock and bond universes for many years, and investors are aware of all of the unique benefits index-based products have to offer including diversification, low fees, and access to an entire asset class through a single investment,” said Jeffrey O’Brien, president and CEO of One Financial. “We have incorporated these benefits into a principal guaranteed hedge fund-based product in order to provide Canadian investors with a safer way to access the hedge fund universe.”

The guaranteed notes are a follow-up to the launch of a similar series which closed successfully last December. They are issued by Société Générale (Canada).

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Alberta regulator reports small surplus

(August 23, 2004) The Alberta Securities Commission has reported a surplus of $64,000 for the quarter ended June 30, down from $404,000 in the prior comparable three month period.

While revenues fell by $169,000, expenses rose by $171,000. Year-to-date revenues, including administrative penalty revenue of $35,000, exceeded budget by $148,000, while expenses are below budget by $350,000.

In contrast, the Ontario Securities Commission expects a surplus of $22 million over the next three years and has promised to tweak its budget to move toward operating on a break-even basis.

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08/27/04