Canadian Western Bank shares sink as outcomes delayed

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Canadian Western Bank shares sank after the agency delayed its fiscal fourth-quarter earnings launch Friday morning and left traders guessing why.

Shares of the Alberta-based financial institution dropped as a lot as 12 per cent, essentially the most intraday for the reason that early days of the COVID pandemic in March 2020, earlier than paring a few of these losses. The lender issued a information launch at 2:40 a.m. New York time saying it plans to report the outcomes by mid-December and canceling a scheduled convention name. The shares declined 5.1 per cent to $55.76 as of 12:26 p.m.

Separately, the financial institution boosted its quarterly dividend by three per cent.

“It’s not regular,” mentioned Dan Rohinton, a vice chairman and portfolio supervisor with iA Global Asset Management Inc. who invests in monetary sector shares.

Rohinton’s fund doesn’t personal CWB, however mentioned Friday’s share value drop is probably going being exacerbated by merger-arb funds betting on a barely decrease probability that the takeover by National Bank of Canada might be accomplished as anticipated. National Bank gained approval for the deal in September from Canada’s competitors physique, however nonetheless wants the federal authorities to log off.

“Don’t underestimate the ‘shoot first, ask questions later’ to one thing like this,” Rohinton mentioned, noting that it was a “final minute” change of plans for the financial institution.

Rohinton mentioned traders are attempting to parse what may have precipitated the delay, from potential “gremlins” within the accounting to the chance {that a} small financial institution with 2,500 staff was working to shut a deal, end an audit and report outcomes “and it went all the way in which to the eleventh hour.”

Neither Canadian Western Bank nor National Bank responded to requests for remark. National Bank shares fell as a lot as three per cent Friday morning.

Bloomberg.com

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