The chief executive officer of the Canadian Imperial Bank of Commerce says he isn’t worried about current debt levels, despite the fact that the debt-to-income ratio is rising in the country as low interest rates entice consumers to borrow more.
“I don’t have any concerns at the moment,” Victor Dodig said in a television interview Tuesday. “We’re working with clients. Clients are making the right decisions.”
“In fact, there’s a tremendous amount of liquidity in the system as well. And that is something that is quite notable across the consumer sector in particular,” Dodig added, noting credit card balances have dropped and there have been fewer opportunities to spend during the pandemic.
Still, household debt levels rose in the third quarter, Statistics Canada reported Friday. The agency said Canadian households owed an average of $1.71 for every dollar of disposable income, up from $1.63 owed in the second quarter.
“The fact is that interest rates are low, and clients are feeling more buoyant in terms of borrowing,” Dodig said.
He added the bank has introduced tools to help ensure clients are saving and borrowing within their means.
“That’s going to be really important as we emerge from the pandemic,” Dodig said.
“We’re working with [clients] on both sides of the balance sheet. It’s a journey – we’ll always do the responsible thing.”
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