These are the big questions facing Canada's Big Six banks in 2024
Interest rates, capital buffers and expense management are among the leading issues facing Canada’s biggest banks in 2024, but in the view of National Bank of Canada analyst Gabriel Dechaine, they’re only a start.
In a note released ahead of Tuesday’s RBC Capital Markets 2024 Canadian Bank CEO Conference, the industry’s first big event of 2024, Dechaine laid out about 10 questions each for the Big Six banks, as well as some for lesser players in the sector, ranging from the big picture to highly specific details of the banks’ operations.
The industry-wide questions included whether interest rate cuts as forecast will affect net interest margins, what level of rate cuts the banks would prefer in 2024 and whether more restructuring charges will be recorded in 2024.
ForCanadian Imperial Bank of Commerce, Dechaine wondered what the bank will do for an encore, after it was the only bank to generate positive operating leverage in 2023. “What’s your plan for 2024,” he asks, in addition to being curious about what kinds of mortgages are popular and how the bank’s Costco credit card book is performing.
The effects of several mergers and acquisitions that closed last year are also on his radar.
While Bank of Montreal has touted the closing of its Bank of the West transaction as a positive for its California presence, Dechaine is curious about whether there are some negatives to consider, such as San Francisco’s challenging socio-economic issues and floundering office market, which is now one of the worst in the United States.
Royal Bank of Canada‘s HSBC Canada acquisition, which recently won regulatory approval, is also on his list. Dechaine wonders how RBC will handle HSBC Canada’s mortgage book, which has elsewhere been
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