![]() We will continue to take a prudent approach and are closely monitoring as interest rates rise and markets evolve," CIBC executives said on the call. "Our late-stage delinquencies across these portfolios continue to remain low compared with pre-pandemic levels. Story continues Execs tout resilience of mortgage booksīank executives touted the resilience of their mortgage portfolios on their conference calls, and even though delinquencies have ticked higher amid rising interest rates, they are increasing off an extremely low base. And that would have implications on the growth in the balance sheet in the loan portfolio, earnings and everything else." "But that would be very different from low-single or mid-single digits. "I'm just suggesting the downside scenario could be a few percentage points down," he said. However, if the banks' mortgage portfolios were to decline, it would likely be a very modest contraction, Rizvanovic says. ![]() He's not convinced that's going to happen in the near term considering the state of the market, with many regional real estate boards reporting monthly sales activity down double digits. Overall growth in Canadian mortgages and home equity lines of credit for the big banks in the first quarter sequentially was a meagre 0.3 per cent, the smallest increase since early 2014, according to his analysis.īank executives acknowledged in their earnings conference calls that mortgage originations are down substantially, and Rizvanovic says the only way the banks could achieve low-to-mid single digit mortgage growth is if the housing market accelerates. "They seem to always throw out that number as a trough level," he said, adding there's downside risk to those calls. Most of the largest Canadian banks expect their mortgage portfolios to grow in the low-to-mid single digits this year. So it's a bit confusing as to how the banks can remain confident." "Unless you start to see sales volume pick up, that's really your indication on originations. And until you see that start to turn, it's indicating that there's no originations going on," Mike Rizvanovic, director of financial services at KBW, told Yahoo Finance Canada. It's been down for seven or eight months now. "Any way you cut it, sales volume has been atrociously bad. One Bay Street analyst thinks Canadian bank executives are too optimistic about growth to their mortgage loan books this year as home sales activity continues its slump. (Photo by Roberto Machado Noa/LightRocket via Getty Images) Executives from the big Canadian banks see their mortgage portfolios growing this year, but one analyst says those expectations might be too optimistic considering the plunge in housing activity.
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