Scotiabank CEO sees no recession in sight for U.S. or Canada
The chief executive officer of Bank of Nova Scotia says his bank is prepared for an economic downturn, whenever that day comes.
“We’ve classified ourselves as downturn ready, and you can see it in our numbers,” Brian Porter told BNN Bloomberg’s Amanda Lang Wednesday, noting the bank’s impaired loans have gone down.
“We feel pretty good about ourselves; we haven’t been stretching for business.”
Porter added that he doesn’t see a looming recession in the U.S., which he said would need to happen before Canada’s economy goes into contraction.
While he doesn’t see a recession in the near-term, Porter said the bank is always prepared for bumps in the road.
“We’re a bank, we get paid to worry; risk happens quickly, and we govern ourselves accordingly,” he said.
One of the biggest risks Canada’s banks faced in the last couple of years was the possibility of a housing correction. But as 2019 winds down, Porter said he’s optimistic about market conditions, partly due to this country’s immigration policy and growing population.
However, he said the bank would like see a national housing strategy tied to immigration to address some of the supply issues facing the country’s biggest cities.
Porter’s comments come at the end of a year that saw high-profile warnings about the ability of the country’s biggest lenders to deal with potential credit losses.
Veritas Investment Research Analyst Nigel D’Souza fetched headlines in March when he put sell recommendations on each of the country’s Big Six banks on an expectation credit losses would pile up; he later told clients to buy shares of Bank of Montreal based on valuation.
And famed short-seller Steve Eisman warned earlier this year in an interview with BNN Bloomberg that Canadian bank CEOs were ill-prepared for potential credit losses in the event the economy slows, although he did not include Scotia in his list of short targets.
Scotiabank was the first big Canadian lender to report its fourth-quarter results on Tuesday, meeting profit expectations despite slower profit growth and higher provisions for loan losses.