We’re in 'a terrible environment but it’s temporary': BMO CEO
Bank of Montreal chief executive officer Darryl White expects the COVID-19 pandemic to cause the economy to have a 'sharp, difficult decline' but will see a rebound of growth next year.
In an interview with BNN Bloomberg on Tuesday, White said that the current economic malaise will likely "persist for some period of time" as quarantine restrictions extend for another month as policymakers and health officials attempt to contain the coronavirus pandemic.
"You don't have many environments in the history of the study of recessions where you see a certain segment of the economy not slow down, but virtually go to zero," White said. "That's what we're seeing across many small businesses right now."
White added that the bank is prepared to assist small businesses that are seeing a material impact to their cash flow as a result of the COVID-19 pandemic.
"There'll be a percentage of [small businesses] which will have trouble when they go through this," White said. "If you look at the balance sheet of the business and the cash flow as they go through [a downturn], that's when we step in."
"My hope is that the result is better than that forecast, but it's early days."
White said he believes that growth should resume in both the U.S. and Canada at the "back end" of the year, in line with some health care officials estimates on when the COVID-19 pandemic is expected to be contained. He added that there's a "high probability" that economies will continue to grow in 2021.
He added that the bank is not looking to reduce its dividend during the pandemic, echoing a similar statement made by CIBC CEO Victor Dodig earlier in the day in an interview with BNN Bloomberg.