CWB Q1 Profit Rises 11%, Beat Estimates

CWB Financial Group (TSE: CWB), a Canadian financial institution based in Edmonton, Alberta, reported a higher profit in its first quarter and beat expectations.

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Earnings & Revenue

Profit attributable to common shareholders came in at C$87.6 million (C$0.92 per diluted share) for the quarter ended January 31, compared with C$79.2 million (C$0.91 per diluted share) a year earlier.

On an adjusted basis, CWB earned C$0.99 per share for the quarter, up from adjusted earnings of C$0.93 per share in the prior-year quarter. Analysts on average had expected adjusted earnings of C$0.97 per share.

Revenues totaled nearly C$266 million, up 9% from C$245.1 million in the same quarter last year.

Provisions for credit losses totaled C$9.1 million in Q1 2022 compared to C$13.5 million in Q1 2021.

CEO Commentary

CWB president and CEO Chris Fowler said, “Execution of our winning strategy focused on business owners continues to drive accelerated growth of full-service clients, as our teams leverage our expanding products, capabilities, and brand presence in Ontario. Our new lending volume remained strong this quarter. While our net loan growth was constrained by an elevated level of payouts and paydowns, the strength of our lending pipelines gives us confidence that we remain on track to deliver double-digit loan growth for the year.””

Wall Street’s Take

On February 23, National Bank Financial analyst Gabriel Dechaine kept a Hold rating on CWB and raised the price target to C$43 (from C$39). This implies 13.2% upside potential.

Overall, CWB scores a Moderate Buy rating among Wall Street analysts based on eight Buys and three Holds. The average Canadian Western Bank price target of C$43.86 implies 15.4% upside potential to current levels.

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