Canada’s biggest banks will start to report their quarterly earnings this week but strong numbers could detract from the longer-term issues.
While the banks are expected to show rosy outlooks thanks to new US tax rules and rising interest rates, but weaker demand in Canada, and the threat of a NAFTA collapse may mean later challenges.
The banks are also likely to be impacted by the change to the B-20 mortgage rules which came into effect at the start of 2018; that could be a headwind of between 5% and 10% for the lenders.
The Canadian Press reports that the jump in new mortgage applications seen at the end of 2017 as home sales rose 4.5%, has been followed by a rise in the number of big bank-rejections that mortgage brokers have experienced. Clients are increasingly being directed to alternative lenders and credit brokers, the report says.
