Bank of Nova Scotia’s Meny Grauman added that “constructive forward guidance would be a big plus for TD”, given the current low market expectations.
Credit loss provisions form another key area of interest for the Big Six banks. The top financial institutions have been increasingly stashing funds to cover potential loan defaults as high interest rates continue their impact on consumer and business financial health.
Canaccord Genuity Corp.’s Mathew Lee mentioned that the credit loss provisions for BMO will be “rough, but nothing that will break the thesis,” with improvements coming in commercial real estate and transportation sectors.
Potential economic implications of a Donald Trump presidency likewise shape banking sector discussions, with analysts watching out on how the banks might be impacted by proposed corporate tax cuts and potential 25% tariffs.
Immigration policy is yet another factor in the economic outlook, with Canada’s recent decision to cut immigration targets affecting consumer spending and economic growth. The expected net reduction of one million students and temporary foreign workers could potentially affect business investment and productivity levels, which adds burden for financial institutions.
Read More: Canadian banks brace for economic headwinds in Q4 earnings
