WESTERN CANADA – A balanced growth strategy and targeted diversification by Canada Western Bank rewarded shareholders with a 25 percent increase in share prices for the fourth quarter and a 16 percent increase from the previous year. In its year-end summary, the bank reported:
- Fourth quarter adjusted cash earnings per common share of $0.74, up 25 per cent from 2016; and
- Fiscal 2017 adjusted cash earnings per common share of $2.63, up 16 per cent from 2016
“CWB’s strategic execution and financial performance in fiscal 2017 were both very strong,” said Chris Fowler, President and CEO. “We maintained our focus on business owners while delivering growth across a broader geographic footprint with increased industry diversification.
“We also made significant progress toward the upcoming transformation of our capital management processes, and worked to ensure our ongoing technology investments and process improvements position us to meet the rapid pace of growth and change within our industry. “
Other accomplishments during 2017 included:
- Delivery of record total revenues from core operations;
- Record core pre-tax, pre-provision income, the latter metric exceeding $100 million in back to back quarters for the first time;
- Higher net interest margin in every quarter, positive operating leverage and strong credit quality;
- Increase in the annual common share dividend for the 25th consecutive year; and
- A highly strategic and accretive acquisition of equipment loans and leases, and general commercial lending assets.
Fowler thanked his people for their committment to help the bank’s clients and the bank achieve strategic goals.
The strength of the bank gives CWB “an incredible opportunity to create exceptional client experiences for business owners across Canada,” Fowler added. “There is no doubt in my mind that CWB’s future looks more exciting than ever before. Thanks to our tremendous teams, I am very confident in our ability to achieve our full potential together.”
Fourth Quarter Fiscal 2017 Highlights, compared to the same period in 2016, include:
- Very strong operating performance, with record core common shareholders’ net income of $61 million, up 27 per cent and record core pre-tax, pre-provision income (teb) of $104 million, up 17 per cent;
- Diluted and adjusted cash earnings per common share of $0.68 and $0.74, up 26 per cent and 25 per cent respectively;
- A gain on sale related to the appointment of a successor trustee for Canadian Western Trust’s exempt market securities business contributed $0.06 to adjusted cash earnings per common share;
- Record total revenue (teb) from core operations of $196 million, up 16 per cent with strong 14 per cent growth of net interest income (teb);
- Net interest margin (teb) of 2.64 per cent, up 28 basis points from last year and 4 basis points from last quarter;
- Provision for credit losses as a percentage of average loans of 20 basis points, down from 24 basis points last year and unchanged from previous quarter;
- Very strong Basel III regulatory capital ratios under the Standardized approach for calculating risk-weighted assets of 9.5 per cent common equity Tier 1 (CET1), 10.8 per cent Tier 1, and 12.5 per cent Total capital; and
- An agreement to acquire for cash, on January 31, 2018, approximately $900 million of equipment loans and leases, and general commercial lending assets.
Accomplishments highlighted in the report from the full-year Fiscal 2017 included:
- Very strong operating performance with common shareholders’ net income of $214 million, up 21 per cent, and record core pre-tax-pre-provision income (teb) of $391 million, up 10 per cent;
- Diluted and adjusted cash earnings per common share of $2.42 and $2.63, up 14 per cent and 16 per cent, respectively;
- Record total revenue (teb) from core operations of $729 million, up 10 per cent, including 10 per cent growth of net interest income (teb) and 16 per cent higher non-interest income;
- Positive operating leverage of 0.3 per cent;
- Loan growth of 6 per cent with 11 per cent growth outside of Alberta and 18 per cent growth of non-Alberta general commercial loans;
- Strong execution of CWB’s funding diversification strategy, including record issuance of senior deposit notes in capital markets, growth of securitization capabilities, and stable branch-raised deposits;
- Net interest margin of 2.57 per cent, up 14 basis points, with sequential increases in every quarter;
- Provision for credit losses as a percentage of average loans of 23 basis points, down from 38 basis points;
- Gross impaired loans represented 0.72 per cent of total loans, up from 0.58 per cent last year and down from 0.74 per cent last quarter; and
- Confirmation of CWB’s investment grade issuer credit rating as having a stable trend by independent, international ratings agency DBRS.
Click here to view the complete report and financial tables.
