(Reuters) - UBS revised its price targets on several Canadian banks, including Canadian Imperial Bank of Commerce and Royal Bank of Canada , in its third-quarter review of the banks.
The brokerage said it still prefers Bank of Nova Scotia to others due to its strong international and domestic growth, low capital market exposure and highest leverage to net interest margins.
"Bank of Nova Scotia has strong capital, which is increasing, and which should underpin higher organic growth and acquisitions," analyst Peter Rozenberg said in a note to clients.
"Banks could begin raising dividends in fourth quarter, but more so in fiscal 2009 as earnings and capital improve," Rozenberg said adding that only Toronto Dominion Bank raised its dividend in third quarter.
Royal Bank showed the best improvement in earnings, up 5.6 percent, helped by Canadian property and casualty and solid capital markets, the analyst said.
"Canadian banks continue to outperform their global peers due to a superior economic and competitive environment, and industry leading capital, liquidity and returns," Rozenberg said.
Following are the price target changes UBS made:
COMPANY RATING PRICE TARGET New
Old
Bank of Montreal Neutral C$48
C$49
Canadian Imperial
Bank of Commerce Buy C$73
C$74
Royal Bank of Canada Buy C$57
C$56
Toronto Dominion Bank Buy C$75 C$79 (Reporting by Anurag Kotoky in Bangalore; Editing by Jarshad Kakkrakandy)
68.81 (0.82%)