Sunday, November 23rd-3.0°C
22246
22916

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

24035


Recent Trending




Today's Market
S&P TSX15111.13+35.95
S&P CDNX789.135.56
DJIA17810.0691.06
Nasdaq4712.97+11.102
S&P 5002063.50+10.75
CDN Dollar0.8901-0.0002
Gold1201.50+10.60
Oil76.72+0.87
Lumber331.50+4.50
Natural Gas4.236-0.253

 
Okanagan Companies
Pacific Safety0.155-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.30+0.03
Cantex0.04+0.005
Anavex Life Sciences0.178+0.008
Metalex Ventures0.03+0.005
Russel Metals31.62+0.82
Copper Mountain Mining2.24+0.06
Colorado Resources0.125-0.015
ReliaBrand Inc0.013-0.002
Sunrise Resources Ltd0.050.00
Mission Ready Services0.35+0.015

 
23744


22970

FEATURED Property
1948944303 - 4004 Bluebird Road
2 bedrooms 2 baths
$498,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...


Be quiet already!

No, you’re not crazy. There really are voices in your head. Voices that keep you from doing what you need to do during your customer care calls. It can be the voice of your teachers, your parent...

_



24158

24207


Member of BC Press Council


22632