Canadian Western Bank Q3 Profit Rises 39%

Canadian Western Bank (CWB), a Canadian bank based in Edmonton, Alberta, reported better-than-expected profits in its second quarter.

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Earnings available to common shareholders came in at C$86.3 million (C$0.98 per diluted share) in Q3 2021, up 38.6% from C$62.3 million (C$0.71 per diluted share) in Q3 2021.

Lower provisions for credit losses (PCL) and revenue growth drove the improvement in profits. Indeed, PCL totaled C$8.9 million, down from C$24.4 million a year earlier.

Meanwhile, revenue was C$263.2 million, up 16% from the prior-year quarter, and higher than the consensus of C$259.2 million. (See Canadian Western Bank stock charts on TipRanks)

On an adjusted basis, CWB earned C$1.01 per share in the first quarter, up from C$0.74 per share a year ago.

Analysts on average expected earnings of C$0.89 per share.

CWB president and CEO Chris Fowler said, “We delivered very strong results again this quarter, and expect to drive annual growth of adjusted earnings per common share in excess of 20% for fiscal 2021. Our brand of proactive, personalized service is a differentiating factor that clearly resonates with business clients.”

On August 17, Scotiabank analyst Meny Grauman maintained a Buy rating on the stock, and lowered its price target to C$42 (from C$43). This implies 15.6% upside potential.

Overall, CWB scores a Moderate Buy rating among Wall Street analysts, based on six Buys and four Holds. The average CWB price target of C$40.65 implies 11.9% upside potential to current levels.

TipRanks’ Smart Score

CWB scores a 6 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to perform in line with the overall market.