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Highlights
- Scotiabank (TSX:BNS) and Toronto-Dominion Bank (TSX:TD) have been in the spotlight as the Bank of Canada raised borrowing rates to cool down the inflationary environment.
- Some believe that the financial sector is likely to perform better amid raised interests as compared to some others.
- The Toronto-Dominion stock surged by about 23 per cent in the past 12 months.
Scotiabank (TSX:BNS) and Toronto-Dominion Bank (TSX:TD) have been in the spotlight as the Bank of Canada raised borrowing rates to cool down the inflationary environment. Some believe that the financial sector is likely to perform better amid raised interest rates as compared to some others.
Additionally, Canada may see bank tax on big financial institutions under the Liberals-NDP' power-agreement announced on March 22, which can impact the financial sector's earnings.
Keeping all these factors in mind, let us look at two TSX bank stocks.
Bank of Nova Scotia (TSX: BNS)
Scotiabank, on Monday, March 28, announced that it received approval from the Toronto Stock Exchange (TSX) and the Office of the Superintendent of Financial Institutions (OFSI) to amend its normal course issuer bid.
The lender said that this amendment aims to increase the number of common shares it may buy for the cancellation to 36 million, earlier 24 million.
BNS stock climbed by nearly 16 per cent in the last one year and closed at C$ 91.99 apiece on Monday, with 3.8 million shares changing hands.
Also read: RY & BMO: 2 TSX bank stocks to watch after Liberal-NDP deal
Toronto-Dominion Bank (TSX: TD)
Toronto-Dominion, on Monday, also stated its intentions to consolidate the units of its exchange-traded funds (ETFs), TD Canadian Long Term Federal Bond ETF and TD U.S. Long Term Treasury Bond ETF.
TD Bank posted a net income of C$ 3.73 billion in Q1 FY2022, up from C$ 3.27 a year ago.
The TD stock surged by about 23 per cent in the past 12 months and closed at C$ 101.97 on Monday, with 5.3 million shares exchanging hands.
Bottomline
Some market experts believe that the central bank may go on to increase the interest rates further to keep inflation in check, improving banks' earnings. However, if a bank tax comes into being, it could impact financial firms’ profits. Hence, investors should ideally be aware of market changes and factors impacting banking businesses when looking into bank stocks.
Also read: Is Dominion Lending (DLCG) a new TSX financial stock to buy?
