Here are five things you need to know this morning:
Scotiabank beats on retail strength: Earnings at Canada’s big banks continue this morning, with Scotiabank beating analyst expectations on strength from its core Canadian retail banking unit. Adjusted profit came in at $1.63 per share, just ahead of the $1.62 expected. Earnings at the core domestic retail banking unit came in at $1.1 billion, an increase of six per cent. That’s a good sign that recessionary fears for the Canadian economy may be unwarranted. On the downside, the bank continues to set aside more money to cover bad loans. Provisions for credit losses came in at $1.05 billion for the quarter, in line with expectations but slightly up from $1 billion the previous quarter and $819 million this time last year.
BMO misses on higher loan losses: That loan loss trend was very much a theme over at BMO, where the lender missed expectations on broad-based weakness, but loan loss provisions were especially notable. BMO set aside $906 million during the quarter. That’s well ahead of the $745 million that analysts were forecasting. Adjusted earnings came in at $2.64 a share for the period. That’s below the $2.75 that analysts were forecasting.
7-Eleven seeks takeover protection: The owner of 7-Eleven is lobbying the Japanese government to require prior notification of any share purchase of more than 10 per cent, a move that if granted would present a major hurdle for TSX-listed Alimentation Couche-Tard’s ambitions to buy the company. Japan-based Seven & i Holdings Co., which owns 7-Eleven, is seeking designation as a core company under the Foreign Exchange and Foreign Trade Act. Any company deemed to be “core” requires sign-off from the government if outside investors want to buy a stake of more than 10 per cent, similar to national security laws on the books in Canada and elsewhere. The move seems blatantly targeted at fending off Couche-Tard’s overture, after the Montreal-based convenience store chain offered US$36 billion for the business earlier this month. It’s not clear whether Seven & i will get the status change it is seeking since it is typically reserved for companies in industries like aerospace, nuclear energy and rare earth mining, but at the very least it makes it clear that the company is not in the mood to be bought out, which means Couche-Tard is facing a much more uphill and hostile climb.
Waymo partners with Magna at Arizona robotaxi plant: Forbes is reporting this morning that self-driving car company Waymo is partnering with TSX-listed car part manufacturer Magna to open a second assembly plant in Arizona. The plant will equip thousands of electric Jaguar SUVs as part of the company’s expansion plans. The new 230,000-square-foot factory will be in Mesa, Arizona and will be operated by Magna to outfit I-Pace SUVs with cameras, laser lidar, radar and other sensors, the company confirmed to the magazine. The move is expected to create hundreds of jobs, a spokesperson for Magna told Forbes.
Bronfman backs out of Paramount bidding: Edgar Bronfman has dropped out of the bidding for Paramount Global, clearing the way for Skydance Media to become the company’s new owner. Skydance had been negotiating with Paramount for months over the terms for a takeover when Bronfman emerged as an X factor, suggesting he was interested in bidding during Paramount’s “go-shop” period when they were permitted to seek other suitors. The Bronfman family has a rich history in the entertainment game harkening back to the days of Warner Music and Vivendi Universal, but ultimately Bronfman decided to withdraw his potential bid. The move clears the way for Skydance to take over the company for more than US$8 billion in early 2025.
