Canada’s Big Banks Anticipate Borrowers Propping Up Financial Results

Canada’s biggest banks are expecting loan growth to boost their financial results for the first quarter of the fiscal year, despite the threat of a recession. Analysts anticipate that borrowers will prop up the banks’ results, fuelled by aggressive interest-rate hikes by the Bank of Canada and demand from commercial customers. However, analysts are also keeping an eye on slowing growth in mortgages and rising reserves for potential sour loans, as well as tighter regulatory and government oversight.

Related Facts

• The first major bank to report earnings for the fiscal first quarter is Canadian Imperial Bank of Commerce (CM-T).
• The Big Six banks are expected to raise their reserve funds for bad loans in anticipation of a potential economic downturn.
• Analysts expect the banks to make relatively minor adjustments to PCLs, due to the expected downturn.

Key Takeaway

Canada’s biggest banks are expecting loan growth to boost their financial results for the first quarter of the fiscal year, despite the threat of a recession. Analysts anticipate that borrowers will prop up the banks’ results, fuelled by aggressive interest-rate hikes by the Bank of Canada and demand from commercial customers. However, analysts are also keeping an eye on slowing growth in mortgages and rising reserves for potential sour loans, as well as tighter regulatory and government oversight.

Conclusion

Overall, Canada’s biggest banks are expecting loan growth to prop up their financial results for the first quarter of the fiscal year. However, analysts are also watching for slowing growth in mortgages and rising reserves for potential sour loans, as well as tighter regulatory and government oversight. It remains to be seen how the banks’ results will be affected by these factors in the coming quarter.