According to the Dominion Bond Rating Service (DBRS) based in Toronto, Canada, yesterday it has confirmed the Deposits & Senior Debt rating of Canadian Western Bank (CWB) at A (low) and its Subordinated Debt rating at BBB (high) with all trends remaining Stable. DBRS also recognizes CWB’s long history of low write-off rates and its use of “relationship-based lending” (a key principle well depicted in “The Banker Who Saved His Soul”.
From the CBRS website –
CWB’s most important strengths are its strong asset quality as evidenced by its very long history of low write-off rates, its proven niche strategy using relationship-based lending, its low-cost base (partially due to its business mix) and its strong internal capital generation characteristics. Funding diversification has improved over the past several years.
Challenges include concentration in the loan book, both geographically (Alberta and British Columbia) and by industry (commercial, construction and real estate lending), although the secured nature of the loan book and the low write-off rates suggest this issue has been well managed throughout the Bank’s history.
CWB recently reported earnings of $133 million (a return on equity of 15.7%) for the nine months ended July 31, 2011, a 15% increase over adjusted earnings for the similar period in 2010, when it reported an adjusted profit of $116 million. The earnings increase was in part due to higher net interest income and the acquisition of National Leasing Group Inc. (NL) in Q2 2010. Both periods included significant gains on securities, which are not expected to recur. The most recent quarter was CWB’s 93rd consecutive profitable quarter (more than 23 years). Loan loss provisions relative to average loans were 20 basis points (bps) annualized in the first three quarters of 2011, down a little from 21 bps for full-year 2010. Gross non-performing loans as a percentage of gross loans have improved over the course of the year relative to both the loan book and to common equity and reserves. Liquidity levels were temporarily below targeted levels at the end of Q3 2011, but they have since recovered.
Under DBRS’s global rating methodology for banks, Canadian Western Bank’s long-term Deposits & Senior Debt rating has an intrinsic assessment of A (low) and a support assessment of SA3. The SA3 rating, which reflects the expectation of no timely external support, results in the final rating being equivalent to the intrinsic assessment.
According to the Siskends LLP website, a class action was commenced in October 2011 against CIBC Mortgages Inc. regarding its practices for calculating prepayment penalties on mortgages entered into across Canada since 2005.
The Statement of Claim alleges that CIBC applied terms and conditions to certain mortgage contracts to allow it unfettered discretion for calculation of mortgage prepayment penalties. It if further alleged that the quantification of prepayment penalties applied by CIBC are in breach of the mortgage contracts.
The action applies to CIBC mortgages as well mortgages through related entities such as Firstline Mortgages and President’s Choice Financial.
Scotiabank Commodity Price Index Declines for Second Consecutive Month in September
WTI no longer a true benchmark for Alberta light synthetic crude oil.
Copper prices rebound from an over-sold position in early October. Inventories are modest in China.
TORONTO, Oct. 28, 2011 /CNW/ – Scotiabank’s Commodity Price Index, which measures price trends in 32 of Canada’s major exports, fell by 1.1 per cent month over month (m/m) in September, the second consecutive monthly decline. The All Items Index has retreated by 6.2 per cent from the near-term high last April, just prior to the advent of financial market concern over sovereign-debt challenges in the Eurozone.
“The commodity price correction has been mild compared with the 40 per cent plunge in the second half of 2008,” said Patricia Mohr, Vice-President, Economics and Commodity Market Specialist at Scotiabank. “While exchange-traded commodity prices declined sharply in early October, prices for oil, copper and the grains have rallied back in recent weeks on optimism that measures would be implemented to shore up the Eurozone financial system and bolster liquidity, culminating in a broad agreement on October 27.”
Nevertheless, a number of commodities not traded on exchanges (e.g. coking coal and iron ore) will likely be adjusted down in October, when quarterly contract prices are re-negotiated – dampened by uncertainty over global economic conditions and somewhat slower growth in China. The contract price for Western Canada’s premium-grade hard coking coal will decline from US$315 per tonne (FOB Vancouver) to a still lucrative US$285 in October. While prices may recede further in early 2012, the medium-term outlook for premium-grade hard coking coal remains favourable. Only 35 per cent of China’s domestic coal reserves are premium grade, while China requires 50 per cent for use in its larger blast furnaces.
The Oil and Gas Index inched ahead in September (+0.7 per cent m/m). The gain reflected a surprising increase for both light crude oil in Edmonton and Hardisty Heavy crude in Alberta – the two prices used in the Scotiabank Commodity Price Index — despite a slight decline in WTI oil.
“The price of WTI oil at Cushing, Oklahoma, the pricing point for the NYMEX contract, is no longer as relevant a marker as it once was for light synthetic crude oil from the Alberta oil sands,” noted Ms. Mohr.
WTI oil prices edged down from US$86.34 per barrel in August to US$85.58 in September. Oil prices are particularly sensitive to sentiment on the global economic outlook, falling as low as US$75.67 on October 4, before rebounding strongly to US$93 on October 27 on news of the Eurozone plan and a pick-up in U.S. third-quarter GDP growth (+ 2.5 per cent from a mere 1.3 per cent in the second quarter). However, WTI oil prices continue to trade at a wide US$20 discount to Brent — a better benchmark of world oil prices. WTI prices at Cushing, Oklahoma have been dampened by rising volumes of crude oil from the Alberta oil sands and the U.S. Mid-continent to Cushing in the face of onward pipeline constraints to refining centres in the U.S. Gulf Coast.
In contrast, the price of light synthetic crude oil (SCO) from Alberta (upgraded bitumen) has averaged US$103 per barrel in 2011 YTD – a US$9 premium over WTI oil. While this partly reflects upgrader outages in the Alberta oil sands, it also reflects a trend towards pricing SCO off its cracking parity with competing, higher-priced crude oil (such as Light Louisiana Sweet) in U.S. Midwest refining centres.
In September, the Metal and Mineral sub-component lost significant ground (-2.5 per cent m/m). Widespread declines in base metals and lower silver prices more than offset flat potash prices and gains in gold, sulphur, uranium and cobalt (a steel alloying agent). LME prices for copper – the bellwether for base metals – dropped from US$4.10 per pound in August to US$3.77 in September and a low of US$3.08 in early October, before surging back to US$3.65 on the 27th. Prices remain exceptionally profitable, yielding a 60 per cent profit margin over average world break-even costs including depreciation.
“Copper prices were over-sold in early October, given prospects for a supply deficit in the fourth quarter, that is, global demand will exceed refined metal supplies,” concluded Ms. Mohr. “China stepped up its purchases in early October recognizing bargain prices, pulling down LME stocks in South Korea. At the height of concern over Eurozone prospects, traders appear to have focused their profit-taking on copper, as well as nickel, given its comparatively large margin over costs and where the bulk of long positions probably resided.”
Scotia Economics provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.
The Scotiabank has proudly announced highlights of the Scotiabank Toronto Waterfront Marathon in their press release dated October 16,2011. But, before you read it, here is an exclusive MetroActive bird’s eye video of the race as it passes by the Pinnacle buildings along the waterfront.
Now for the press release.
Canadians Coolsaet and Gillis qualify for London Olympics at 2011 Scotiabank Toronto Waterfront Marathon
Toronto’s premier running event raised more than $3.5 million for 164 local charities
TORONTO, Oct. 16, 2011 /CNW/ – Today was a spectacular day for Canadian pride at the 2011 Scotiabank Toronto Waterfront Marathon (STWM), with Canadian runners Reid Coolsaet and Eric Gillis qualifying for the London Olympics. More than 22,000 runners took to the streets in windy conditions, raising more than $3.5 million for 164 local charities.
Coolsaet and Gillis, his training partner at Speed River Track Club in Guelph, ON, finished third (2:10:55) and fourth (2:11:28) respectively at STWM, meeting the Canadian Olympic standard and ensuring their spots on the 2012 Olympic Team. Coolsaet’s time was the fastest time ever run by a Canadian on Canadian soil and the second fastest time ever for a Canadian over the classic 42k distance. Gillis, who met the qualifying standard by merely one second, previously represented Canada at the 2008 Beijing Olympics in the 10,000m.
Kenya’s Kenneth Mungara won the overall men’s title with a time of 2:09:51. Ethiopia’s Shami Dawit narrowly lost a thrilling sprint to the finish line, also being timed in 2:09:51 for second. The women’s race was equally exciting. Despite battling a tough headwind over the last seven kilometres, Ethiopia’s diminutive Koren Yal, equaled the course record of 2:22:43 defeating fellow Ethiopian Mare Dibaba by 42 seconds to claim the top prize. Yal’s performance was the ninth fastest women’s marathon run in the world so far this year.
“This was a remarkable breakthrough day for Canadian marathoning,” said Alan Brookes, Race Director. “Over the past few years our IAAF Silver Label race has established itself as one of the best in the world and today’s times confirm that. Most exciting today is that our Canadians ran with the best in the world and punched their tickets to London. We’re thrilled and so proud of not only our elite athletes, but also the 22,000 other runners that collectively raised a record-breaking amount for charity.”
“I am extremely proud to report that the 2011 Scotiabank Toronto Waterfront Marathon has raised over $3.5 million for some incredible Canadian charities,” said John Doig, Senior Vice-President, Toronto Region, Scotiabank. “STWM is an amazing event where people from all over the world can run, cheer on loved ones, or raise money for charity. It’s a great combination of athleticism, philanthropy and community spirit.”
Marathon Highlights
Men’s Race – Kenya’s Kenneth Mungara was crowned Scotiabank Toronto Waterfront Marathon champion for the fourth consecutive year, with a finishing time of 2:09:51. Mungara previously broke the record for fastest time on Canadian soil at STWM in 2010 (2:07:57).
Women’s Race – Koren Yal, from Ethiopia, placed first in the women’s race (2:22:43) just ahead of fellow Ethiopian Mare Dibaba who came in second (2:23:25). Russia’s Silvia Skvortsova came third in 2:27:51.
Canadian Standings – Reid Coolsaet of the Speed River Track Club in Guelph, ON, led the Canadians with an overall third-place finish with an international-class time of 2:10:55, qualifying him for the 2012 Olympic Games. Also qualifying for the London Olympics is Reid’s clubmate Eric Gillis who finished fourth at 2:11:28. Particularly noteworthy is that six Canadians finished in the top ten in this world-class event.
Half-Marathon – Thomas Breitbach won the men’s half-marathon, with a time of 1:07:21, and Leslie Sexton took the women’s title with 1:16:32.
Milton, ON phenom, Ed Whitlock, 80, continued to re-write the record books, running 3:15:54 for a new M80+ age-group world record. The longstanding previous mark was 3:39 which Whitlock took down to 3:25 in Rotterdam in April before slicing down nine more minutes today at STWM.
Capping off an incredible event, 100 year-old Fauja Singh (India) is set to break the world record for the oldest person to complete a marathon with a finish time of 8:25:16.
The full list of results for the 22nd Scotiabank Toronto Waterfront Marathon is available at www.stwm.ca.
The Scotiabank Group Charity Challenge and Neighbourhood Challenge together surpassed the $3 million target with a total of more than $3.5 million as of press time. This remarkable achievement exceeds last year’s total of $2.54 million. In addition, Scotiabank will award $6,000 to the three charities with the most runners, the largest amount of pledges per runner and the most money raised in pledges.
Along the marathon course, 12 Neighbourhood Cheering and Entertainment stations encouraged the runners to the finish line as part of the Scotiabank Neighbourhood Challenge. To honour their exuberance and support, Scotiabank will award them a charity bonus of $6,000 for having the most people, best costumes, best entertainment, and above all, creating the most noise. This year’s challenge was the best-ever with tons of spectators and incredible costumes, with the final report on the winners being issued later this week.
About the Scotiabank Toronto Waterfront Marathon (STWM)
For the fourth consecutive year, the STWM has been awarded a prestigious Silver Label by the International Association of Athletics Federations (IAAF). This designation makes the STWM one of only five internationally recognized IAAF Label marathons in North America. In 2010, the STWM was ranked as 6th fastest marathon in the world, 3rd fastest women’s race in the world and holds the record for both the fastest men’s and women’s marathons on Canadian soil (2:07:58 run last year by Kenneth Mungara and 2:22:43 by Sharon Cherop equaled today by Koren Yal). The Scotiabank Toronto Waterfront Marathon attracts participants from over 50 countries and this year’s goal is to raise more than $3 million for 164 charities reached $3.5 million as of press time.
The Scotiabank Toronto Waterfront Marathon includes a 5km, half-marathon (21.1km), and full marathon (42.2km) run. For more information, please visit www.stwm.ca.
About Scotiabank
Scotiabank is committed to supporting the communities in which we live and work, both in Canada and abroad, through our global philanthropic program, ‘Bright Future.’ Recognized as a leader internationally and among Canadian corporations for our charitable donations and philanthropic activities, Scotiabank has provided on average approximately $44 million annually to community causes around the world over the last five years. Visit us at www.scotiabank.com.
Image with caption: “Eric Gillis (left) and Reid Coolsaet celebrate at the 2011 Scotiabank Toronto Waterfront Marathon (October 16, 2011) after qualifying for the 2012 London Olympics.
Image with caption: “Kenneth Mungara of Kenya wins his 4th consecutive Scotiabank Toronto Waterfront Marathon (October 16, 2011) with a time of 2:09:51.
Image with caption: “More than 22,000 runners take to the streets of Toronto for the 2011 Scotiabank Toronto Waterfront Marathon (October 16, 2011), raising more than $3.5 million for charity.
Image with caption: “British Sikh 100 year-old Fauja Singh completes the 42.2km 2011 Scotiabank Toronto Waterfront Marathon (October 16, 2011) with a time of 8:25:16.
For further information:
Julia Wall-Clarke, Narrative Advocacy Media
Tricia Soltys, Narrative Advocacy Media
Patty Stathokostas, Scotiabank Media Communications
TORONTO, October 13, 2011 — Canadian entrepreneurs say the most important pieces of advice that they would give to other entrepreneurs to help them grow their businesses are: 1) develop an effective business plan (44 per cent); 2) manage your time well (43 per cent); and 3) engage in networking (38 per cent), according to the 2011 RBC Small Business Survey conducted by RBC and Ipsos Reid.
“With many competing priorities, it can be challenging for any small business owner to know where to focus their attention,” said Mike Michell, national director, Small Business, RBC. “These survey results tell us loud and clear that planning, networking, and managing your time should be at the top of every entrepreneur’s agenda.”
Entrepreneurs suggest that other business owners who want to grow their businesses should also:
Seek help/advice (28 per cent);
Aggressively solicit clients/business (25 per cent);
Conduct market research/planning (25 per cent); and
Get financial advice before starting our business (23 per cent).
“This is great advice coming from small business owners considering the challenges that they expect to face over the next year,” said Michell. “The expertise of peers and professionals can help take your business to the next level.”
The study also found that the top three challenges business owners say that they will face over the next year are:
finding clients/developing market (60 per cent);
maintaining sufficient cash flow/maintaining growth (47 per cent); and
work life balance issues, like working long hours (35 per cent).
“Lessons can be learned from these challenges,” adds Michell. “Finding clients, as well as retaining them, is an ongoing challenge for business owners at every stage, and critical to the life and success of any business.”
RBC Business Success Tips
The creation of a business plan should help you identify your customers, your market, the competitive landscape, and other important aspects of your business.
Leverage your business plan to help identify what your true priorities are, and start each day with a plan to effectively manage your time.
Ask for advice from people who are already working in your line of business, as many of them are usually willing to share industry information or serve as sounding boards for your ideas.
Leverage technology to communicate to potential and existing clients, using websites and social media.
These are some of the findings of an RBC/Ipsos Reid survey conducted from July 29 to August 8. This online survey of 1,400 entrepreneurs, who were either self-employed or owned their own small business, was conducted via the Ipsos I-Say Online Panel, Ipsos Reid’s national online panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample’s composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted, probability sample of this size, with 100 per cent response rate would have an estimated margin of error of ±3 per cent, 19 times out of 20.
About RBC Small Business Banking
Small businesses in Canada want flexible banking choices, convenient payment options and simple ways to manage their cash flow. Whether they are starting a business, managing growth, or succession planning, the RBC Advice Centre can help answer their questions. Free interactive tools and calculators provide customized information covering many facets of business finance and online advice videos are updated regularly to answer questions that are top of mind with small business owners. With the guidance of RBC business advisors, small business owners have access to free, no obligation professional advice about RBC products and services. For more assistance, please visitwww.rbcadvicecentre.com.
TORONTO, Oct. 13, 2011 /CNW/ – Canadian businesses of all sizes are likely to face challenging conditions in the months ahead, according to a report released today by Scotia Economics. Domestic prospects are being constrained by the much slower and uneven pace of economic growth in most advanced nations, amid increasing fiscal restraint and persistently high unemployment. Meanwhile, intensifying debt-related strains in the euro zone and the United States suggest that financial markets will remain volatile during this adjustment period, dampening business and consumer confidence.
“Small firms are particularly sensitive to domestic demand, so their ability to maintain momentum will depend in large part on the resilience of consumer and business expenditures,” said Adrienne Warren, Senior Economist, Scotia Economics. “We expect consumers to be cautious spenders for the time being, given high household debt loads and some recent softening in employment conditions. A more subdued outlook for housing and renovation activity will reinforce this outlook.”
However, household employment, income and spending trends will continue to have a distinct regional performance differential, with the commodity-sensitive areas benefitting from more buoyant conditions than those regions more reliant on non-resource exports to the established markets in the United States, Europe and Japan.
“While activity in Western Canada and Newfoundland and Labrador is being supported by continued strength in resource-related investments, Central and Maritime Canada’s heavier exposure to a slowing U.S. economy suggests relatively more moderate growth prospects for small and large businesses alike,” noted Ms. Warren.
The current environment favours firms whose products and services are geared to corporate customers over those that rely primarily on households. While businesses may become more conservative in new hiring and investment in the months ahead, corporate balance sheet strength provides considerable flexibility to maintain current expenditures. Small businesses also will continue to benefit from the ongoing buoyancy in resource-related activity.
According to the report, the best growth prospects for many small firms may lie in their ability to tap export markets, notwithstanding the near-term disruptions to global trade flows. The fast-growing emerging nations in Asia and Latin America in particular offer considerable growth potential. Exporters focused on the more traditional markets of theUnited States and Europe will undoubtedly be challenged by underlying weak demand and less favourable demographic trends.
“Beyond the adjustment to a more muted outlook for global demand over the near-term, small businesses must continue to adapt to broader longer-term shifts in the economic landscape,” concluded Ms. Warren. “Key issues facing small businesses include an aging population, rising immigration, skilled labour shortages, particularly in the construction trades, a high Canadian dollar, and high energy costs.”
Scotia Economics provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.
For further information:
Adrienne Warren, Scotia Economics, (416) 866-4315
Alex Koustas, Scotia Economics, (416) 866-4212
Patty Stathokostas, Scotiabank Media Communications, (416) 866-3625
On December 29, 2009 CBC (Canadian Broadcasting Corporation) wrote on their cbc.ca website about a 42-year-old banker at Canadian Imperial Bank of Commerce who won a lawsuit claiming his former employer discriminated against him because of his age when he was fired last year.
German-born Achim Beck, a derivatives salesman earing about $1.5 million a year filed the lawsuit against the CIBC in London, England after he dismissed. The CIBC had closed its battered structured products division amidst the credit crisis at the time. Beck claimed he was treated unfairly due to his nationality and age when he was dismissed in May of 2008.
Various media reports indicated that an internal CIBC memo declared the ideal candidate for a subsequent job posting to head the bank’s European derivatives division should have a “younger, entrepreneurial profile” — a stipulation the bank was unable to justify.
The Globe and Mail in its coverage of the event published further details.
– When Beck appealed his dismissal to the bank, alleging it was commonly known that recruiters had already been asked to look for replacements for himself and his colleagues, the CIBC’s Toronto-based head of fixed income sent an e-mail to a couple of people at CIBC World Markets saying: “Further to our discussion this morning I am not sure why we would negotiate any unfair dismissal … as far as I am aware we restructured the IRD sales marketing desk and have not rehired nor do we have any current plans to do so.”
– One of e-mail recipients replied: “Sorry I missed the beginning … did he forget we are rehiring.” To which the head of fixed income replied: “We have no plans to hire I will call u now.”
– CIBC’s legal department sent Mr. Beck a letter saying his role was genuinely redundant, that the bank would not be hiring equivalent employees in the foreseeable future, and laid out criteria that were used to evaluate the marketing team.
The bank faces a significant payout after a British employment tribunal (the London South Employment Tribunal) decided in favour of Beck. The Tribunal found that the bank dismissed Beck and several members of the derivatives team at the time, yet the CIBC had plans to restaff the unit with younger workers. The Tribunal basted senior executives at CIBC for using a “sham” process. It said in its ruling that the e-mail exchange between management “demonstrates a culture amongst senior management of being willing to cover up the true picture.”
Although the Tribunal found in Beck’s favour on age discrimination grounds, it rejected his claim of race discrimination.
In a statement, the bank said it was reviewing the decision and had no comment. The value of the restitution CIBC may be obliged to pay to Beck was to be determined at a later date.
An internet-based search was unable to determine if the CIBC has made payment to Beck and if so how much was paid to him.
A federal court judge has set a precedent by ordering TransUnion of Canada Inc. to pay $5,000 in damages to a Calgary man who was turned down by a bank after another man’s credit history was wrongly forwarded.
Federal Court Justice Russel Zinn ruled that on the basis of the privacy breach and repeated failures by the credit rating agency, TransUnion of Canada to correct the “grossly inaccurate” information quickly and effectively a payback to the victim is warranted, along with an award of $1,000 in legal costs.
Mirza Nammo represented himself in court and persuaded Justice Zinn to make the first ever damage award for a breach of the federal privacy act, the Personal Information Protection and Electronic Documents Act (PIPEDA).
Justice Zinn compared the dissemination of false credit information to a strip search in that it lays “bare to those receiving the information the creditworthiness of a person” and therefore can be “equally intrusive, embarrassing and humiliating as a brief a respectful strip search”. Zinn also elaborated that in this case, while the act was “serious,” it was “relatively brief and not extremely disrespectful” and therefore warrants “moderate” damages.
The situation started when Nammo went to the Royal Bank of Canada (RBC) for a loan to help start a trucking business with a partner. The next day RBC advised him that his loan was not approved “because he had ‘bad credit’ and his partner did not have a financial background sufficient to support a loan of the necessary amount on his own credit.”
It didn’t take long for Nammo to discover that TransUnion had provided RBC with information that came from a collection agency and was related to a man with a different name and date of birth and who had never lived at any of the same addresses Nammo had lived at. We’re not talking about a minor difference either, Nammo is 44 and the other person is 28.
Although the collection agency denied passing on the information related to Nammo, it was a bureaucratic mess to correct the record. So much so that Zinn found that overall TransUnion “failed to collect accurate information” on Nammo, failed to correct the erro and failed to take responsibility to begin with.
In the end Nammo won the day with the judge saying that the credit rating agency’s attempts to lay blame on Nammo during arguments in court was “offensive”.
This ruling could set the stage for many more lawsuits against not just banks, but any bureaucratic organization whose employees are negligent in their diligence or in listening to common sense. With more cases like this it will eventually cause corporations to implement some common sense within their organizations rather than blind policies and procedures. This is a subject that is covered in ‘The Banker Who Saved His Soul’.
