Concerns about a slowing Canadian housing market and rising debt levels among Canadian citizens are exerting a drag on earnings growth for the Big Six banks in the Great White North. Provisions for credit losses inched up across the group, though overall credit quality remains sound.

And Canadian banking is still providing a solid foundation for what remains one the strongest banking systems in the world.

Rates of growth moderated in the fourth quarter of fiscal 2012, which ended Oct. 31. And management teams sounded cautious notes on the Canadian economy as well as on conditions in the US and abroad. But those with significant south-of-the-border operations also noted signs of strength, and the bank with the most overseas exposure benefitted in a big way from that competitive advantage in the recently concluded period.

Dividend growth was limited to a single bank. But in this environment holding steady is good news, too.

Bank of Nova Scotia (TSX: BNS, NYSE: BNS), our favorite among Canada’s Big Six banks, wound up fiscal 2012 fourth-quarter reporting season for the group by posting a 31 percent increase in net income to CAD1.52 billion, or CAD1.18 per share. Scotiabank earned CAD1.16 billion, or CAD0.97 per share, in the year-ago quarter.

Adjusted earnings were CAD1.21 per share, beating a consensus forecast of CAD1.18 per share. Revenue rose 15 percent to CAD4.94 billion on acquisitions and improved fixed-income trading performance. Provisions for credit losses rose to CAD321 million from CAD281 million.

Scotiabank is the most global of the Big Six, with its growth initiatives concentrated in Latin America and emerging Asia.

Scotiabank’s Canadian banking division earned CAD481 million, up 15 percent from a year earlier, while international banking profits rose 22 percent to CAD453 million, driven by acquisitions, particularly Banco Colpatria in Colombia.

Global wealth management earnings rose 15 percent to CAD300 million, while the capital-markets business, known as global banking and markets, earned CAD396 million, up 63 percent from a year ago when market conditions were weak.

For fiscal 2012 Scotiabank posted net income of CAD6.47 billion, up 21 percent to establish a new company record. Earnings per share were CAD5.22, up 15.2 percent from CAD4.53 in fiscal 2011. Adjusted EPS were up 8 percent. Return on equity for the year was 19.7 percent versus 20.3 percent in fiscal 2011, while Scotiabank’s productivity ratio declined to 52 percent from 53.9 percent.

Scotiabank, the third-largest by market cap of the Big Six, reported a Tier 1 capital ratio of 13.6 percent as of Oct. 31, 2012, up from 12.2 percent at the same point in 2011. The bank’s tangible common equity ratio rose to 11.3 percent from 9.6 percent.

Scotiabank declared a fourth-quarter dividend of CAD0.57 per share, level with the third quarter payout but up from CAD0.52 a year ago. It paid dividends totaling CAD2.19 during calendar 2012, up 6.8 percent from calendar 2011.

Bank of Nova Scotia, which is yielding 4.1 percent, is a buy under USD60.

Royal Bank of Canada (TSX: RY, NYSE: RY) reported a 22 percent increase in net income to CAD1.91 billion, or CAD1.25 per share, as revenue grew 12 percent to CAD7.5 billion. RBC earned CAD1.57 billion, or CAD1.02 per share in the fourth quarter of fiscal 2011.

Like Scotiabank, the biggest of Canada’s Big Six banks experienced a solid recovery in fixed-income trading and saw additional gains from personal loan growth. Adjusted EPS, which includes amortization and other intangible items, were CAD1.27, better than the consensus estimate of CAD1.26.

Personal and commercial banking profit rose 9 percent to CAD1.03 billion. Personal loan and deposit growth rose 7 percent and 8 percent, respectively, from a year earlier, reflecting softer–yet still-healthy–housing demand and consumers’ appetite for debt.

Wealth management earnings increased 16 percent to CAD207 million and capital markets earnings more than tripled to CAD410 million. Trading revenue more than tripled to CAD625 million.

Provisions for loan losses in RBC’s Canadian banking group rose to 0.34 percent of total loans from 0.30 percent at the end of the third quarter of fiscal 2012. Total loan-loss provisions increased to CAD362 million from CAD276 million due to one corporate account and higher provisions in Canadian personal and business lending portfolios.

For fiscal 2012 RBC posted 17 percent profit growth to a company-record CAD7.5 billion, as personal and commercial banking, capital markets and insurance generated their best results ever.

As of Oct. 31 RBC’s Tier 1 capital ratio was 13.1 percent, up 10 basis points from the end of the third quarter.

RBC declared a dividend of CAD0.60 per share, equal to the CAD0.60 it paid Nov. 23 in respect of fiscal third-quarter results. The bank paid total dividends of CAD2.28 per share in calendar 2012, up 9.6 percent from CAD2.08 per share in calendar 2011.

RBC must refinance debt totaling CAD30 billion–approximately 36 percent of its CAD85 billion market capitalization–by the end of calendar 2014. Royal Bank of Canada, currently yielding 4.1 percent, is a hold.

Toronto-Dominion Bank (TSX: TD, NYSE: TD), Canada’s No. 2 bank by market cap behind RBC, reported fiscal 2012 fourth-quarter net income growth of 0.5 percent to CAD1.597 billion, or CAD1.66 per share, from CAD1.589 billion, or CAD1.68, a year earlier. Revenue grew 4 percent.

Adjusted EPS were CAD1.83, beating a consensus estimate of CAD1.81.

TD also announced it has agreed to buy Epoch Holding Corp, a New York-based asset management firm, for USD668 million in cash. TD’s growth efforts are focused on the US, where it now has more retail branches than it does in the Great White North.

The Epoch bid is the latest among several small acquisitions by TD since the 2008 financial crisis. In October it agreed to buy Target Corp’s (NYSE: TGT) USD5.9 billion US credit card portfolio.

TD has focused on small deals over the past two years, but CEO Ed Clark said during the bank’s quarterly conference call that it would consider larger deals to bulk up its already sizeable US presence. “We are seeing improvement in the US economy that makes larger deals more feasible,” Mr. Clark noted.

TD’s residential mortgage loans grew almost 9 percent from a year ago but fell 2 percent from the third quarter, reflecting tighter lending rules for borrowers using Canadian government-backed mortgage insurance.

For the full fiscal year TD posted EPS of CAD6.76, up from CAD6.43, on reported net income of CAD6.47 billion, up from CAD6.04 billion. Loan-loss provisions rose to CAD565 million from CAD404 million.

Canadian personal and commercial banking posted reported net income of CAD806 million in the fourth quarter on loan and deposit growth, while stable credit quality helped to drive core earnings growth. Wealth and insurance delivered net income of CAD293 million in the quarter, down 15 percent from the same period last year.

US personal and commercial banking generated net income of USD321 million for the quarter; on an adjusted basis the segment earned USD358 million, up 23 percent from the fourth quarter of fiscal 2011 on organic loan and deposit growth. Wholesale banking recorded net income of CAD309 million for the quarter, a year-over-year increase of 10 percent.

TD’s Tier 1 capital ratio was 12.6 percent at Oct. 31, up from 12.2 percent at the end of the third quarter.

TD declared a dividend of CAD0.77 per share, level with the rate paid for the third quarter. It paid CAD2.89 per share in calendar 2012, up 10.7 percent from the CAD2.61 paid to shareholders in 2011.

TD Bank is a hold at these levels.

Bank of Montreal (TSX: BMO, NYSE: BMO) reported a 41 percent increase in fiscal 2012 fourth-quarter net income, as capital-markets profits more than doubled and loan-loss provisions came in well below year-earlier levels.

BMO earned CAD1.08 billion, or CAD1.59 per share, up from CAD768 million, or CAD1.11 per share, a year earlier. Adjusted EPS were up 35 percent to CAD1.65 per share, beating estimates of CAD1.43.

Net income from Canadian personal and commercial banking were flat at CAD439 million, while earnings in its US personal and commercial unit fell 16 percent to CAD130 million. Capital markets profit more than doubled to CAD293 million.

Loan-loss provisions fell to CAD192 million from CAD362 million. BMO’s Tier 1 Capital ratio ticked up to 12.6 percent from 12.4 percent at the end of the third quarter.

For fiscal 2012 net income surged 35 percent to CAD4.19 billion, while adjusted earnings grew 25 percent to CAD4.09 billion. Adjusted EPS were CAD6.00, up 18 percent from fiscal 2011.

Total provisions for credit losses were CAD765 million for the year, while adjusted provisions of CAD471 million were down CAD637 million from fiscal 2011.

BMO maintained its quarterly dividend at CAD0.72 per share. The bank paid dividends of CAD2.82 per share in calendar 2012, up from CAD2.80 a year ago. Bank of Montreal is a hold.

Canadian Imperial Bank of Commerce (TSX: CM, NYSE: CM) reported net income rose 13 percent to CAD852 million, or CAD2.02 a share, from CAD757 million, or CAD1.79, a year earlier. Adjusted earnings were CAD2.04 a share, above the CAD1.98 analysts expected and better than the CAD1.78 recorded for the fourth quarter of fiscal 2011.

For the year ended Oct. 31 CIBC reported net income of CAD3.3 billion, EPS of CAD7.85 and adjusted EPS of CAD8.07, compared to net income of CAD2.9 billion, EPS of CAD6.71 and adjusted EPS of CAD7.57 for fiscal 2011.

Retail and business banking posted net income of CAD2.3 billion in fiscal 2012, up from CAD2.2 billion in 2011 on volume growth across most retail products and higher fees.

Wealth management generated net income of CAD339 million, up from CAD279 million in fiscal 2011 on higher revenue in asset management. This was partially offset by lower retail brokerage revenue.

Wholesale banking delivered strong results, reporting net income of CAD613 million, compared with CAD543 million in 2011.

Provision for credit losses of CAD328 million was up CAD22 million from the fourth quarter of 2011. The bank reported a Tier 1 Capital ratio of 13.8 percent as of Oct. 31.

CIBC declared a dividend of CAD0.94 in respect of fourth-quarter results, in line with the CAD0.94 paid for the third quarter. The bank paid CAD3.64 per share in calendar 2012, up 3.7 percent from CAD3.51 in calendar 2011. Canadian Imperial Bank of Commerce, now yielding 4.7 percent, is a hold.

National Bank of Canada (TSX: NA, OTC: NOITF) is the smallest of the Big Six but it was the only one to raise its fourth-quarter dividend. National will pay CAD0.83 per share on Feb. 1, 2013, to shareholders of record as of Dec. 27, up from the CAD0.79 it paid for the third quarter of fiscal 2012.

The bank paid CAD3.08 per share in calendar 2012, up 12.4 percent from CAD2.74 in 2011. Indeed National Bank has been the most aggressive of the Big Six with regard to dividends since the end of the Great Recession, having been the first to raise its payout after the crisis abated.

The bank earned CAD351 million, or CAD1.97 a share, up 20 percent from CAD292 million, or CAD1.62, a year ago. Excluding items, adjusted earnings were CAD1.93, in line with analysts’ expectations.

For 2012 National Bank earned CAD1.63 billion, up 26 percent from CAD1.30 billion in 2011. EPS were CAD9.32 for 2012, up 35 percent from CAD6.92 in 2011. Adjusted net was CAD1.40 billion, up 7 percent, while adjusted EPS were CAD7.86, up 9 percent.

The bank’s Tier 1 Capital ratio declined to 12 percent from 13.6 percent a year ago. Provisions for loan losses declined to CAD190 million from CAD210 million a year ago. National Bank, the most Canada-centric of the Big Six, is a hold.

Bay Street Beat

CE Portfolio Aggressive Holding Poseidon Concepts Corp (TSX: PSN, OTC: POOSF) has taken a pounding in the market since mid-November. Bay Street analysts have jumped into the ring to throw their blows, too. For details on the sinking of Poseidon see Portfolio Update and Dividend Watch List.

Nine brokerage houses downgraded the stock in the aftermath of the company’s third-quarter earnings report, which showed solid growth and decent prospects for the future but came in below guidance and obviously disappointed analyst expectations.

The stock’s buy-hold-sell line on Bay Street went from 10-0-1 a month ago to 1-7-3 as of Dec. 6. The one “buy” rating comes from consistent outlier EVA Dimensions, which boosted the stock to “overweight” from “hold” on Nov. 29, by which time the share price had fallen to CAD3.89 from above CAD13 ahead of the earnings release.

The average 12-month price target among the 10 analysts who provide a forecast is now CAD7.85, down from CAD19.95.

IBI Group Inc (TSX: IBG, OTC: IBIBF), which was shifted from the Conservative to the Aggressive Holdings in a Nov. 15 Flash Alert, has also suffered significant damage on Bay Street in the aftermath of third-quarter earnings.

Four analysts downgraded the stock, and it now sports a 2-6-3 buy-hold-sell line. Last month the line was 7-2-2, with a CAD12.11 average 12-month price target. That figure is CAD8.27 as of Dec. 6.

Fellow Aggressive Holding Ag Growth International Inc (TSX: AFN, OTC: AGGZF) enjoyed two upgrades following its third-quarter earnings report. Macquarie Capital lifted the stock to “neutral” from “underperform” but kept its 12-month price target at CAD26.00. Laurentian Bank Securities raised it to “buy” from “hold,” boosting its target to CAD34 from CAD32.

ARC Resources Ltd (TSX: ARX, OTC: AETUF) enjoyed three upgrades after posting solid third-quarter results.

TD Securities raised the stock to “buy” from “hold” with a new price target of CAD27, up from CAD26. National Bank Financial now rates ARC “outperform,” up from “sector perform,” with a new target of CAD27, up from CAD25.

Canaccord Genuity Corp raised the stock to “buy” from “hold” and boosted its 12-month price target to CAD27 from CAD26.

Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF) is now a “hold” at EVA Dimensions, up from “underweight.” Scotia Capital dropped the stock to “sector perform” from “sector outperform” but maintained its price target at CAD17.

Noranda Income Fund (TSX: NIF-U, OTC: NNDIF) is still a “buy” at TD Securities, and the CAD8.00 12-month price target is intact.

Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF) is now on the “restricted list” at four houses, BMO Capital Markets, FirstEnergy Capital Corp, Scotia Capital and Peters & Co Ltd. This is likely due to investment banking relationships arising between Peyto and each of the four.

Peyto was downgraded to “sell” at EVA Dimensions.

Conservative Holding Bird Construction Inc (TSX: BDT, OTC: BIRDF) saw no changes to its standing on Bay Street following release of its third-quarter numbers, nor did fellow Conservative Holding Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF). As well, all four analysts that cover Student Transportation Inc (TSX: STB, NSDQ: STB) reiterated their ratings.

Here’s how the CE Portfolio stacks up on Bay Street with all Holdings having reported results. The number of analyst “buy,” “hold” and “sell” ratings for each company are shown, followed by the average 12-month price target among the analysts that provide such guidance.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–6–1–2 (CAD35.13)
• Artis REIT (TSX: AX-U, OTC: ARESF)–6–3–0 (CAD17.72)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–1–3–3 (CAD13.65)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–2–5–0 (CAD14.50)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–0–1–0 (CAD13.50)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPFF)–5–6–0 (CAD31.30)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–8–3–0 (CAD26.81)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–6–7–0 (CAD31.00)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–3–5–0 (CAD22.39)
• Dundee REIT (TSX: D-U, OTC: DRETF)–5–2–0 (CAD41.25)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–4–1–0 (CAD10.70)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–4–7–1 (CAD11.41)
• Just Energy Group Inc (TSX: JE, NYSE: JE)–2–3–2 (CAD10.71)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–6–2–1 (CAD52.00)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–3–6–1 (CAD33.99)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–7–4–1 (CAD31.10)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–3–7–0 (CAD30.08)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–5–11–2 (CAD21.63)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–2–2–0 (CAD7.31)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–8–2–0 (CAD21.94)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–2–1–1 (CAD13.13)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–3–6–1 (CAD33.17)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–8–10–1 (CAD26.33)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–2–4–0 (CAD17.63)
• Colabor Group Inc (TSX: GCL, OTC: COLFF)–1–4–0 (CAD8.60)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–16–3–1 (CAD48.29)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–2–2–1 (CAD8.00)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–2–6–3 (CAD8.27)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–8–1–0 (CAD17.57)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–1–0–0 (CAD8)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–4–5–0 (CAD18.66)
• Pengrowth Energy Corp (TSX: PGF, NYSE: PGH)–8–7–4 (CAD7.51)
• PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF)–13–8–1 (CAD16.45)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–8–3–2 (CAD27.36)
• Poseidon Concepts Corp (TSX: PSN, OTC: POOSF)–1–7–3 (CAD7.85)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–10–5–1 (CAD52.93)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–3–7–0 (CAD46.94)