Canaccord's Wealth Unit Delivers Record Quarterly Revenues
Daniel Daviau, President and CEO of Canaccord
Canaccord Genuity Group Inc.'s global wealth management operations earned record quarterly revenue of C$215.9 million (US$162.4 million), up 13.0% year over year. The firm's total client assets under management reached a record C$1.04 trillion as of Dec. 31, 2023, up 10.8% year over year. Despite the strong financial results, shares in the Canadian wealth manager fell as much as 14%, the biggest intraday drop since May 2023. The decline in share price may be related to the company's overall revenue, which declined year over year, and its earnings per share of C$0.13, which fell short of analysts' estimates of C$0.15.
Record Quarterly Revenue
Canaccord's wealth management operations have been a key driver of growth for the firm in recent quarters. The unit's revenue has grown by more than 20% year over year for the past three quarters. The strong growth in revenue has been driven by a number of factors, including increased market activity, higher client balances, and the acquisition of new clients. Canaccord's wealth management business has also benefited from the firm's strong brand and reputation.
Overall Revenue and Earnings
While Canaccord's wealth management unit delivered record quarterly revenues, the firm's overall revenue declined by 2.1% year over year to C$1.5 billion. The decline in revenue was primarily due to a decrease in its capital markets and investment banking operations. The firm's earnings per share also fell short of analysts' estimates, coming in at C$0.13 compared to the estimated C$0.15. The miss on earnings was largely due to higher expenses, including compensation and technology costs.
Conclusion
Despite the decline in overall revenue and earnings, Canaccord's wealth management unit continues to be a strong growth driver for the firm. The unit's record quarterly revenue is a testament to the strength of Canaccord's brand and reputation, as well as the growing demand for wealth management services. However, the firm will need to address the challenges in its capital markets and investment banking operations in order to return to overall revenue growth.
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