DM Monthly Report – Mar 2021

PRUDENTIAL PAYBACK – Like just about everyone else at this time last year, Canada’s banks were justifiably concerned about what the unfolding pandemic would mean for their economic futures. How would mortgage books be impacted by surging unemployment and a potential chill across the real estate market? Where would the explosion of the government’s balance sheet send interest rates? Would ordinarily reliable wealth management and brokerage revenues plunge if investors became locked in a state of inactivity? Against this uncertain backdrop, the management teams of the big 5 banks sharply increased provisions for credit losses, while the Office of the Superintendent of Financial Institutions put a freeze on share buybacks and dividend increases.

As it turned out, the scale and swiftness of government programs, such as CERB, filled the economic chasm created by the lockdown and the principal worries hanging over the banks never came to pass.

Click here to read more:  DM Monthly Report – March 2021