Friday, October 31st9.0°C
23888

Banks face new challenges

Change is afoot at the big Canadian banks, as some of its top leaders near retirement age just as the economy runs into fresh challenges with the pace of growth.

Last week, TD Bank chief executive Ed Clark disclosed a succession plan that will lead to his exit in November 2014, but his move also raises questions about how the other big banks are planning for their next generation of leaders.

"Succession is always of interest, especially to shareholders," said Dan Werner, Canadian bank analyst at Morningstar based in Chicago.

"You're not going to see the growth that you saw five or six years ago," he added.

Over the past few years, the Canadian banking sector has thrived on its lack of surprises, having endured the financial crisis without suffering any major stumbles and keeping its dividends reliable for investors.

Those days could be over as expectations of slower growth overtake Canadian retail banking and questions arise over where each bank will choose to turn in an attempt to drive its profits higher.

Last week, Clark told TD's annual meeting that slower growth in the Canadian economy will pressure the sector and make it "tougher'' for the bank to meet its earnings targets of seven to 10 per cent in 2013.

While the other banks haven't shared their specific outlooks yet, the list of headwinds runs long, from high consumer debt to weakness in the housing market and a stubborn recovery in the U.S. economy.

"You've got natural slowing of growth in your core business, you've got a highly leveraged customer ... and you've got very few switches to pull to allocate capital on a cost-effective basis and feel comfortable it will return," said Stonecap Securities analyst Brad Smith.

"Those are pretty big challenges for incoming CEOs."

The Canadian Press


Read more Business News

23015


Recent Trending




Today's Market
S&P TSX14613.32+154.63
S&P CDNX769.59-2.06
DJIA17390.52195.10
Nasdaq4630.742+64.604
S&P 5002018.05+23.40
CDN Dollar0.88750.00
Gold1166.30-32.2999
Oil80.55-0.35
Lumber325.70+2.10
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.125+0.015
Knighthawk0.01-0.005
QHR Technologies Inc1.18+0.03
Cantex0.045-0.015
Anavex Life Sciences0.185+0.0139
Metalex Ventures0.03-0.005
Russel Metals32.85+0.63
Copper Mountain Mining2.09+0.12
Colorado Resources0.125-0.015
ReliaBrand Inc0.015+0.003
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.39+0.015

 





FEATURED Property
21117955040 Windsong Crescent
3 bedrooms 3 baths
$499,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...

_








Member of BC Press Council


22707