Canada's six largest banks have put aside over $2.4 billion combined to cover potential losses, anticipating more Canadians will be unable to pay off loans and credit card debt as the country heads into an expected recession.
Expecting more Canadians will be unable to pay off loans and credit card debt as the country heads into a potential recession, Canada's six largest banks have put aside a combined total of more than $2.4 billion to cover possible losses.
This marks a significant increase from the $373 million the six banks allocated for PCLs a year ago, during the first quarter of 2022. Around the same time in March 2022, the Bank of Canada began its attempt to tame inflation by hiking the interest rates, which climbed from a historic low of 0.25 per cent to 4.5 per cent today – the highest it's been since 2007.
"Current underlying conditions, particularly the strong level of employment and consumer savings, are supporting a slower rate of normalization of impaired PCLs than we had expected," National Bank executive vice-president of risk management William Bonnell said during a March 1 earnings call.
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