(October 20 – 16:15 ET) – Scotiabank has disclosed it’s exposure to the cable and telecommunications sector.
Its total loans to this sector are $4.1 billion. That’s 2.4% of the bank’s total loans and acceptances. $2.2 billion of these loans are investment grade and $1.9 billion are non-investment grade. Lending to the telecommunications sector alone totals $2.6 billion. Most of these loans represent secured senior debt.
Scotia says its portfolio is diversified both geographically and by industry sub-segment. The net impaired loans are $4 million. Its total high-yield bond trading portfolio is currently US$28 million, with US$16 million in the cable and telecommunications sector.
Scotia insists it has a history of strong risk management and ensuring credit quality. “We are satisfied with our current 2000 provisioning against this portfolio.”
Yesterday, TD Bank becaame the first Canadian bank to update its media and communications loan exposure. TD’s total telecommunications and media loans represent 6.9% of the total loan portfolio. It did not disclose the level of impaired loans.
CIBC also disclosed its telecom loan exposure . The total is $5.5 billion, 4.1% of all loans and acceptances.
Merrill Lynch views these disclosures as a positive in light of recent speculation about excessive loan exposure to the telecom sector. The string of disclosure follows the very recent rebound of tech stocks.
-IE Staff