Canadian bank CEOs say their credit outlooks are still generally positive despite an escalating trade war, but they’re taking some precautions.
Speaking at the Scotiabank Financials Summit being held in Toronto, RBC president and CEO Dave McKay says he is a little cautious due to the ongoing trade tensions, but the credit picture in the bank’s consumer and commercial segments is broadly improving.
However, he says tariff-impacted sectors are facing a significant degree of uncertainty and the bank is maintaining a robust capital buffer to absorb potential losses.
Scotiabank president and CEO Scott Thomson says he doesn’t think tariffs will have a large effect on the lender’s credit performance, but the bank is monitoring the situation.
The trade war entered a new chapter on Tuesday as the Canadian government introduced retaliatory tariff measures in response to U.S. tariffs introduced in August. In response to Canada’s retaliatory tariffs, U.S. President Donald Trump signed new executive orders to completely bar imports of certain Canadian goods.
Shortly after the U.S. imposed its initial round of duties, Canada’s major banks reported third-quarter earnings that were largely positive, with the lenders pointing to a resilient economy while saying the trade tensions were manageable.