Thursday, October 23rd8.2°C
23888
23088

Poor's showing for 6 financial outlets

Standard & Poor's has downgraded the ratings of six of Canada's financial institutions by one notch.

The credit ratings agency cites a softening economy, low interest rates and pressure from the headwinds facing Canada's economy.

"We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system," S&P said in announcing the downgrades.

It added that it expects intensifying competition for loans and deposits "will lead to pressure on profitability growth, especially in banks' retail businesses."

The firm lowered its ratings by one notch on Scotiabank (TSX:BNS) to A-plus. National Bank of Canada (TSX:NA), Laurentian Bank of Canada (TSX:LB), Central 1 Credit Union , Caisse centrale Desjardins and Home Capital Group (TSX:HCG) were also lowered one notch.

The outlooks for all six financial institutions are stable.

S&P also affirmed its credit ratings on the Royal Bank (TSX:RY) and TD Bank (TSX:TD) and raised its outlook to stable from negative. The agency currently rates both banks at double-A-minus.

A downgrade by a credit rating agency usually means investors will demand a higher interest rate when a company goes to raise cash by issuing bonds or other debt.

In its report, says the Journal, S&P noted that loan demand was approaching a cyclical peak and expected to moderate after several quarters of robust growth.

Other economic factors have also brought Canadian financial institutions under increased scrutiny from ratings agencies.

Back in October, Moody's Investors Service announced it was placing the long-term ratings of six Canadian banks under review Friday for a possible downgrade.

It said high levels of consumer debt and high housing prices had left the banks more vulnerable to downside risks to the Canadian economy than in the past.

The agency put Bank of Montreal (TSX:BMO), Bank of Nova Scotia, Caisse Centrale Desjardins, CIBC (TSX:CM), National Bank of Canada and Toronto-Dominion Bank under review.

Royal Bank was not included on the list.

The Canadian Press


Read more Business News

23433


Recent Trending




Today's Market
S&P TSX14476.05+163.979
S&P CDNX810.242.24
DJIA16701.54240.22
Nasdaq4453.306+70.459
S&P 5001952.63+25.52
CDN Dollar0.8898+0.0003
Gold1228.80-16.70
Oil81.45+1.32
Lumber331.00+2.30
Natural Gas3.672+0.013

 
Okanagan Companies
Pacific Safety0.125+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.17+0.02
Cantex0.055-0.025
Anavex Life Sciences0.19-0.008
Metalex Ventures0.05+0.005
Russel Metals33.08+0.55
Copper Mountain Mining2.11+0.01
Colorado Resources0.14-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.4050.00

 





FEATURED Property
20584585321 Chute Lake Road
5 bedrooms 4 baths
$739,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...

_








Member of BC Press Council


22707