Large Canadian Banks 2020 Outlook: Headwinds to Slow Growth
Economic conditions will remain challenged this year, given persistent uncertainty caused by trade and political tensions. Additionally, the low interest-rate environment will lead to pressured net interest margins (NIMs) while provisions for credit losses (PCL) will continue their path to normalization. As a result, DBRS Limited (DBRS Morningstar) expects earnings growth to moderate for the large Canadian banks in F2020. In Canada, we remain concerned about highly leveraged consumers and elevated housing prices in the Greater Vancouver Area (GVA) and Greater Toronto Area (GTA), where housing activity picked up in the latter part of 2019; however, most of these banks have geographic diversity, which provides some offset.
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