Royal Bank of Canada, one of the country’s major lenders, is predicting to see a decline in its mortgage sales over the second half of the year, as stricter lending rules start to make their present felt, according to Reuters.
RBC’s Retail Banking Head Neil McLaughlin confirmed that the bank’s mortgage sales were performing well due to “completion of sales agreed.” These sales were the outcome of borrowers’ rushed loans, which were initiated before the introduction of the new regulations.
In a separate interview, Chief Financial Officer Rod Bolger said that RBA had successfully hit its target of mid-single digit mortgage sales growth for the year.
“Through three quarters we’re north of 6%. If it continues to lag down, we’ll still be above 5% for the full year,” he explained.
Bolger also highlighted that bank was also able to take advantage of the increased renewal rate, some of this due to sales transacted through an online app RBA created to streamline the renewal process for existing customers.
The new mortgage lending rules are part of proposed changes to Canadian mortgage and housing rules so as to regulate housing markets in the cities of Toronto and Vancouver.
“I think it’s been healthy,” Bolger said.
RBC recently disclosed that its earnings per share increased by 14% to C$2.10 in the quarter ended July 31. Its net income also trended higher, up by 11% from 2017 to 3.1 billion.
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