TORONTO — The Bank of Montreal’s chief executive says it has seen a “moderation of growth” in Canadian consumer loans and mortgages but its economists say the risk of recession in the year ahead remains “relatively low.”
BMO CEO Darryl White says the moderation was both “healthy and expected” and credit quality continues to be “very good” in these consumer portfolios.
His comments today during a speech at the Toronto-based bank’s annual general meeting of shareholders come after an analyst and short sellers heeded caution about the Canadian banking sector.
Veritas analyst Nigel D’Souza said recently that the Big Six banks’ latest quarterly earnings were “underwhelming” and cautioned that the sector is likely facing an “inflection point” in the credit cycle and investors should reduce exposure ahead of “an acceleration of credit losses.”
BMO economists say underlying fundamentals such as strong population growth, historically healthy job markets and a more benign interest rate environment point to a “relatively low” risk of recession in the year ahead.
He added that BMO remains confident in its medium-term target of earnings-per-share growth of seven to 10 per cent.
Companies in this story: (TSX:BMO)
The Canadian Press