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Canada’s main stock index fell on Monday, hurt by information technology and healthcare shares, as investors remained risk-averse ahead of potential U.S. tariffs.
At 10:30 a.m. ET (1503 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 0.3% at 25,068.54, its lowest level since February 3.
Among sectors, information technology and healthcare led the declines, down over 2% each. The heavily-weighted energy sector lost 0.43% as oil
prices edged lower in the day.
Canada and Mexico are set to intensify discussions to avoid 25% tariffs on their exports to the U.S. ahead of a March 4 deadline.
The two north American countries have taken steps to beef up border security, which bought them about a month’s reprieve from the tariffs that could wreak havoc on a highly integrated economy of the region.
TSX hits two-week low as commodity-linked stocks drag
“It’s very hard to say what the real objective of the new U.S. administration is, whether it is really just something that can be addressed from increasing border security,” said Angelo Kourkafas, investment strategist at Edward Jones Investments.
Top domestic lenders are set to report later this week, starting with Bank of Montreal and Bank of Nova Scotia, also known as Scotiabank, on Tuesday.
Trump’s proposed 25% tariff on all non-energy Canadian imports may lead banks to set aside additional funds, despite anticipated gains from capital markets and wealth management in the first quarter.
Among individual stocks, Calibre Mining was among the worst performers on TSX, down 6.7% after mid-tier gold producer Equinox Gold on Sunday said it would buy all outstanding shares of the mining company.
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TORONTO, Feb 24 (Reuters) – Canada’s big six banks are expected to build more credit loss provisions as they brace for uncertainty surrounding the U.S. tariff threat, analysts said, potentially weighing on first quarter earnings and beyond.
The banks have already been putting aside more funds to cover any souring loans due to continued high Canadian unemployment, which has fuelled investor concerns despite some more robust economic data recently. Also called provisions for credit losses, a rise in those funds dents profits for the banks.
U.S. President Donald Trump’s threat to impose a 25% tariff on all non-energy Canadian imports starting in March means banks are likely to set aside yet more rainy day funds, even as they are expected to benefit from a boom in capital markets activity and strong wealth management earnings in the first quarter.
“(We) expect large banks to build larger performing provisions for credit losses than we previously believed… we also believe pessimistic scenario assumptions may become more pessimistic,” RBC Dominion Securities analyst Darko Mihelic said.
For the first quarter, loan loss provisions are expected to jump between 6.4% for Royal Bank of Canada to as much as 80% for Bank of Montreal. CIBC is expected to show a fall in provisions of 0.7%, according to LSEG data.
Net income forecasts for the six banks range from a 7.5% fall for BMO to 13.8% growth for RBC.
Mihelic forecasts provisions to increase about 70% to $5.6 billion in aggregate and expects core earnings to decrease about 10% year-over-year in the first quarter.
The banks report later this week starting with BMO and Bank of Nova Scotia, also known as Scotiabank, on Tuesday.
The uncertainty triggered by Trump’s tariff threats has weighed on bank stocks and the broader Toronto Stock Exchange, due to concerns about the duties triggering a recession.
“The potential impact of tariffs on all of these key earnings drivers is likely to dominate the earnings calls this quarter,” Scotiabank analyst Meny Grauman said, noting that one key area of interest will be how banks expect provisions to reflect tariff risks.
Four of the big six banks – RBC, Scotiabank, CIBC and National Bank – have lost between 2.3% and 6% so far this year, while the broader Toronto Stock Exchange has gained 3%. TD Bank and BMO have gained 12% and 2.5% respectively.
Scotiabank, which sold some of its South American assets recently, is the only bank that has focused largely outside of the U.S., betting on the $1.5 trillion North American trade corridor.
Analysts have noted Scotiabank could be more significantly impacted than peers in a tariff scenario, because their diversification strategy was based on growth in North American trade.
“We could return to a more positive call if Mexico and Canada are able to negotiate relatively harmless tariffs. Until that happens, we think it will be hard for (Scotiabank’s) stock to be a relative outperformer,” CIBC analyst Paul Holden said.
(Reporting by Nivedita Balu in Toronto; Editing by Nia Williams)
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TORONTO, Feb 24 (Reuters) – Canada’s big six banks are expected to build more credit loss provisions as they brace for uncertainty surrounding the U.S. tariff threat, analysts said, potentially weighing on first quarter earnings and beyond.
The banks have already been putting aside more funds to cover any souring loans due to continued high Canadian unemployment, which has fuelled investor concerns despite some more robust economic data recently. Also called provisions for credit losses, a rise in those funds dents profits for the banks.
U.S. President Donald Trump’s threat to impose a 25% tariff on all non-energy Canadian imports starting in March means banks are likely to set aside yet more rainy day funds, even as they are expected to benefit from a boom in capital markets activity and strong wealth management earnings in the first quarter.
“(We) expect large banks to build larger performing provisions for credit losses than we previously believed… we also believe pessimistic scenario assumptions may become more pessimistic,” RBC Dominion Securities analyst Darko Mihelic said.
For the first quarter, loan loss provisions are expected to jump between 6.4% for Royal Bank of Canada to as much as 80% for Bank of Montreal. CIBC is expected to show a fall in provisions of 0.7%, according to LSEG data.
Net income forecasts for the six banks range from a 7.5% fall for BMO to 13.8% growth for RBC.
Mihelic forecasts provisions to increase about 70% to $5.6 billion in aggregate and expects core earnings to decrease about 10% year-over-year in the first quarter.
The banks report later this week starting with BMO and Bank of Nova Scotia, also known as Scotiabank, on Tuesday.
The uncertainty triggered by Trump’s tariff threats has weighed on bank stocks and the broader Toronto Stock Exchange, due to concerns about the duties triggering a recession.
“The potential impact of tariffs on all of these key earnings drivers is likely to dominate the earnings calls this quarter,” Scotiabank analyst Meny Grauman said, noting that one key area of interest will be how banks expect provisions to reflect tariff risks.
Four of the big six banks – RBC, Scotiabank, CIBC and National Bank – have lost between 2.3% and 6% so far this year, while the broader Toronto Stock Exchange has gained 3%. TD Bank and BMO have gained 12% and 2.5% respectively.
Scotiabank, which sold some of its South American assets recently, is the only bank that has focused largely outside of the U.S., betting on the $1.5 trillion North American trade corridor.
Analysts have noted Scotiabank could be more significantly impacted than peers in a tariff scenario, because their diversification strategy was based on growth in North American trade.
“We could return to a more positive call if Mexico and Canada are able to negotiate relatively harmless tariffs. Until that happens, we think it will be hard for (Scotiabank’s) stock to be a relative outperformer,” CIBC analyst Paul Holden said.
(Reporting by Nivedita Balu in Toronto; Editing by Nia Williams)
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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West African gold producer Orezone Gold has announced a bought deal offering with financial services company Canaccord Genuity, acting as the sole underwriter and bookrunner, to raise C$35m ($24.5m).
Under the agreement, Canaccord has committed to purchasing 42,683,000 common shares of Orezone for C$0.82 per share.
Orezone will also grant an option for 6,402,450 shares to Canaccord, which could raise additional proceeds of up to C$5.25m.
The proceeds will fund the development of the stage two hard rock expansion and the exploration of the Bomboré Gold Mine in Burkina Faso, West Africa. The funds will also support working capital and general corporate purposes.
The Bomboré mine’s processing complex includes a six million tonnes per annum (mtpa) oxide plant.
The expansion of the hard rock plant at the mine will further boost gold production.
The company forecasts an optimised gold production profile of 220,000–250,000oz per year by late 2026, with preliminary cost estimates for stage two ranging between $90m and $95m.
The stage two expansion is scheduled to commence in the second half of 2025 and follows the ongoing stage one expansion that is scheduled to achieve first gold in the fourth quarter of 2025.
Stage two will enhance the hard rock plant’s throughput to 5mtpa, with the addition of new processing units within the stage one footprint.
The offering is expected to close around 13 March 2025, subject to regulatory approvals, including from the Toronto Stock Exchange (TSX).
The shares will be made available in Canada, certain offshore jurisdictions, and the US via private placement, adhering to the US Securities Act’s exemption requirements.
In addition to the offering, Orezone is planning a secondary listing on the Australian Securities Exchange (ASX) to attract more investors and enhance its capital markets profile.
This listing is targeted for mid-2025, contingent on market conditions and ASX listing requirements.
The ASX secondary listing will supplement the company’s primary listing on the TSX, aiming to enhance trading liquidity and attract a broader base of sophisticated investors including specialised mining-focused funds.
Orezone president and CEO Patrick Downey said: “Orezone is excited to be advancing these transformational initiatives during this period of record high gold prices. We believe that an acceleration of the Stage II hard rock expansion to an overall production profile of 220,000–250,000oz per year will serve to maximise free cash flow in the coming years, positioning Orezone with a cornerstone asset from which to diversify and grow its production base.
“This strategic goal will be complemented by our plans to list on the ASX, which is expected to enhance the company’s trading liquidity and promote better access to investment capital.”
West African gold producer Orezone Gold has announced a bought deal offering with financial services company Canaccord Genuity, acting as the sole underwriter and bookrunner, to raise C$35m ($24.5m).
Under the agreement, Canaccord has committed to purchasing 42,683,000 common shares of Orezone for C$0.82 per share.
Orezone will also grant an option for 6,402,450 shares to Canaccord, which could raise additional proceeds of up to C$5.25m.
The proceeds will fund the development of the stage two hard rock expansion and the exploration of the Bomboré Gold Mine in Burkina Faso, West Africa. The funds will also support working capital and general corporate purposes.
The Bomboré mine’s processing complex includes a six million tonnes per annum (mtpa) oxide plant.
The expansion of the hard rock plant at the mine will further boost gold production.
The company forecasts an optimised gold production profile of 220,000–250,000oz per year by late 2026, with preliminary cost estimates for stage two ranging between $90m and $95m.
The stage two expansion is scheduled to commence in the second half of 2025 and follows the ongoing stage one expansion that is scheduled to achieve first gold in the fourth quarter of 2025.
Stage two will enhance the hard rock plant’s throughput to 5mtpa, with the addition of new processing units within the stage one footprint.
The offering is expected to close around 13 March 2025, subject to regulatory approvals, including from the Toronto Stock Exchange (TSX).
The shares will be made available in Canada, certain offshore jurisdictions, and the US via private placement, adhering to the US Securities Act’s exemption requirements.
In addition to the offering, Orezone is planning a secondary listing on the Australian Securities Exchange (ASX) to attract more investors and enhance its capital markets profile.
This listing is targeted for mid-2025, contingent on market conditions and ASX listing requirements.
The ASX secondary listing will supplement the company’s primary listing on the TSX, aiming to enhance trading liquidity and attract a broader base of sophisticated investors including specialised mining-focused funds.
Orezone president and CEO Patrick Downey said: “Orezone is excited to be advancing these transformational initiatives during this period of record high gold prices. We believe that an acceleration of the Stage II hard rock expansion to an overall production profile of 220,000–250,000oz per year will serve to maximise free cash flow in the coming years, positioning Orezone with a cornerstone asset from which to diversify and grow its production base.
“This strategic goal will be complemented by our plans to list on the ASX, which is expected to enhance the company’s trading liquidity and promote better access to investment capital.”
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