Shoveling more money out door, along with having rising expectations of increased defaults. Makes sense in our bizarro world, to wit;
This past week earning for Canada’s biggest banks saw the country’s major lenders move in lockstep ahead of a projected economic downturn, with each putting more money away for a possible rise in credit losses.
The more expensive cost of borrowing in Canada and the possibility of job losses could catch up to households and push a growing number into default, though some believe the worst of the debt pain is likely at least a year away.
Canada’s big six banks — TD Bank, RBC, BMO, Scotiabank, CIBC and National Bank — all reported earnings for their first fiscal quarters this week, with similar-sounding results. All reported a dip in profits as they put more money aside to handle credit losses.
The Q4 2022 Credit Industry Insights Report (CIIR) released this past week from Trans Union showed the Canadian credit market continues to expand against an uncertain economic backdrop, with consumers taking on additional credit and lenders continuing to grow.
TransUnion’s Credit Industry Indicator (CII), which maps consumer credit market health, rose four points year-over-year (YoY) in December 2022, reaching 105 and remaining in the same range as before the COVID-19 pandemic.
See the full report from Trans Union here