took higher provisions for credit losses and classified more loans as impaired in their fiscal first quarters, but showed resilience in other areas, an indication that the country’s lenders are weathering a softening economy brought on by
And while Toronto-Dominion Bank posted a provision for credit loss ratio of 0.44 per cent, higher than analyst expectations of a 0.40 per cent ratio and up from 0.32 per cent a year earlier, Canada’s second-largest bank also posted seven per cent loan growth in Canada. “More importantly, the bank is guiding to a declining GIL ratio going forward, putting downward pressure on loan losses that will offset some expected increases in Canadian consumer loan losses,” he wrote.
Paul Holden, a bank analyst at CIBC Capital Markets, said loan growth at BMO is unlikely to exceed low to mid-single digits until the economy improves. “We remain cautious on the credit outlook as business bankruptcies are rising faster than consumer delinquencies.”