From boosting cash on hand to cutting staff, Canadian banks are taking a variety of strategies to prepare for a widely expected economic slowdown in the year ahead.
Banks outlined some of their approaches in their fourth quarter results this week, which saw executives strike notes of caution because of the variety of economic pressures, while still committing to a push for growth.
Expenses jumped for CIBC in the quarter in part from severance costs as it "repositioned the business" for the changing outlook, said chief financial officer Hratch Panossian. "You have higher tail risk right now," said McKay. "And therefore, we're building a little bit of a capital buffer for uncertainty."
BMO's chief financial officer Tayfun Tuzun said the bank is so far not cutting back on any business segments because of uncertainty. "You have to invest for growth, and in a potential downturn, you're just more selective on what you invest. But it is important to drive growth." Scotiabank's chief risk officer Phil Thomas said that the bank's efforts to de-risk its portfolio have positioned it well to manage economic uncertainties, while chief executive Brian Porter said he expects rate pressure to soon ease.
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