\u0027Worst yet,\u0027 the analysts wrote in a note to clients
“Worst yet,” the analysts led by Gabriel Dechaine wrote in a note to clients late Wednesday, if economic conditions are indeed deteriorating, it could lead Canada’s big banks to a new “build” phase where they set aside more funds to cover loans they believe could be in trouble.
“In our view, banks with the most ex-Canada lending exposure could be under the most pressure to retain performing provisions,” Dechaine wrote in the note, which names Bank of Montreal, Bank of Nova Scotia, and Toronto-Dominion Bank. BMO and TD, which have substantial lending operations in the U.S., are in an “interesting position” because they need to generate internal capital as part of planned acquisitions announced in recent months, the analysts said.Article content
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