Commercial real estate loan losses remain a manageable risk for Canada’s biggest banks even in the wake of last week’s turmoil at New York Community Bancorp, according to the head of the country’s bank regulator.

“My spidey sense, my intuition, is that we’ll come through this commercial real estate, office commercial real estate problem pretty well,” Peter Routledge said of the Canadian banking sector during a briefing with reporters Tuesday in Toronto. “Not without loss, just everything’s relative and I think relatively, we’ll be OK on that.”

Routledge, who leads the Office of the Superintendent of Financial Institutions, said property-loan defaults, particularly those tied to office buildings, remain concerning. But after diving into New York Community Bancorp’s regulatory filings after the regional lender reported a surprise loss tied to worsening credit quality, he saw no need to change his own outlook for Canada’s banks.

“It didn’t really change our fundamental take” on the lenders’ credit risks around property loans, Routledge said. He also cited Jerome Powell’s remarks during a 60 Minutes interview that aired Sunday in which the Federal Reserve chair said he believes commercial real estate is a “manageable” problem for the financial system.

Last month, Routledge said banks around the world are likely to suffer “meaningful losses” on commercial-property loans and that Canadian banks’ earnings will likely take a hit, but without a major capital risk resulting.  

Of the country’s six biggest banks, National Bank of Canada has no exposure to office real estate in the US, while Bank of Nova Scotia’s lending on that front is minimal, according to Lidia Parfeniuk, director at S&P Global Ratings in Toronto. Canadian Imperial Bank of Commerce, Bank of Montreal, Royal Bank of Canada and Toronto-Dominion Bank have larger exposures to U.S. commercial real estate, but their overall portfolio of office loans is between just one per cent and two per cent of total lending, Parfeniuk said.