Economic recovery in N.America slipping: Bank

TORONTO - Despite reports from the US Thursday that initial jobless claims fell to 472,000 last week and pending home resales were up 5.2 per cent in July, Canada’s top Toronto Dominion (TD) Bank said the economic recovery in North America is slipping after positive hints four months ago.

“Does the world look as good as it did four months ago? No, it doesn’t really,” TD Bank CEO Ed Clark told the media after announcing the results for the third quarter.

He said he was also “less optimistic” about the Canadian economy than four months ago, indicating that current low interest rates in North America will continue, taking into account “how long and slow the recovery in the U.S. is going to be.”

But Canada’s second largest posted a higer (third-quarter) profit of $1.18 billion, up 29 percent from the same period last year.

The bank CEO attributed the higher profit to higher personal and commercial lending despite slump in capital-markets operations.

“Our third quarter results really tell the growth story of our retail businesses on both sides of the border, with our total adjusted retail earnings hitting a new high of $1.3 billion, up 21 percent from last year,” the Canadian bank CEO said.

“Wholesale Banking earnings continued to normalize, performing in line with expectations despite tougher markets in the quarter. We also saw the best credit quality and lowest credit losses in seven quarters across all of our businesses,” he added.

Meanwhile, the gains by the top Canadian bank helped the Toronto Stock Exchange (TSX) maintain its positive streak for the seventh straight day Thursday.

The TSX composite index rose 107.31 points to close at 12,111.09, with financial, metal and energy sectors being the gainers.

The stock of BlackBerry maker Research In Motion (RIM) - which has slipped almost 18 percent during the month - also rose very marginally to close at $46.50.

(Gurmukh Singh can be contacted at gurmukh.s@ians.in)