Tausi Insider

Minister of Finance Chrystia Freeland holds a news conference on the second day of the Liberal cabinet retreat in Ottawa on Sept. 15, 2020. Sean Kilpatrick/The Canadian Press When Deputy Prime Minister Chrystia Freeland called the chief executive officers of Canada’s Big Six banks on the Sunday in February before her government invoked the Emergencies Act, CEOs stressed that the tools they had to help choke off money pouring in to support the convoy protests were limited. At that moment, banks needed court orders to freeze funds, the CEOs said, which are slow to be granted. To give banks the power to freeze funds faster, the government needed to sanction the protesters under the same anti-financial-crime laws it uses for terrorists, three CEOs said. They also urged the government to plug gaps in systems for monitoring transactions by bringing in a broader range of payments providers under stricter regulations. Accounts of at least three calls Ms. Freeland held with bank CEOs over an ...

TD Bank Group says it paused the MyMoney lending program it recently launched with Canada Post. Andrew Vaughan/The Canadian Press TD Bank Group TD-T says it paused the MyMoney lending program it recently launched with Canada Post after it detected suspicious activity on its system. Spokeswoman Amy Thompson says processing was affected when the bank’s security system noticed “early warning signs of irregular activities” and the bank decided to pause the program to investigate. She says it is disappointing that “bad actors” tried to take advantage of the lending program, officially launched Oct. 12, that is meant to expand access to loans through the partnership with Canada Post. Thompson says the bank, which is in charge of running the program, hopes to reopen applications as soon as it feels it is appropriate. The program, offering loans of between $1,000 and $30,000 at variable interest rates currently ranging from about 10 and 20 per cent, is designed to fill a gap between payday l...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

Bank towers are shown from Bay Street in Toronto's financial district. Adrien Veczan/The Canadian Press Canada’s major banks wrapped up their fiscal year on an uneasy note, with a boost to profit margins from rising interest rates offset by inflated costs and gradual increases in loan losses as customers start to feel the strain from higher borrowing costs. Five of the six largest lenders reported fiscal fourth-quarter profits that were flat or lower than a year ago, and three of them – Bank of Montreal, BMO-T Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – fell short of analysts’ earnings estimates. The outlier was Toronto-Dominion Bank, TD-N a lender that is rich in deposits and posted large increases in the margins it earned on loans – the difference between what it charges borrowers and pays on deposits. That helped drive retail banking revenues higher. In the 2023 fiscal year, banks are expecting to be dealt a tougher economic hand. Several bank CE...

Canada’s most prominent banks and insurers say they are sticking with the virtual or hybrid annual general meetings they adopted during the COVID-19 pandemic for another year. The group of 12 banks and insurers say they recently obtained a court order allowing them to hold the meetings in these formats again. Though they acknowledge the COVID-19 situation has improved this year, they say they want to use virtual and hybrid meetings because the virus is so “unpredictable.” They add that using the formats will also allow them to respect protocols recommended by public health authorities. The group, which includes Royal Bank of Canada, TD Bank Group, Sun Life Financial Inc. and Manulife Financial Corp., were granted a similar order in March 2020, December 2020 and December 2021. Rounding out the group are Bank of Montreal, Canadian Imperial Bank of Commerce, Canadian Western Bank, Laurentian Bank, Bank of Nova Scotia, National Bank, Great-West Lifeco and Canada Life. https://www.ta...

Shares of U.S. banks are taking a beating in December, as worries over an expected recession and weakening profit margins dull the industry’s appeal. The S&P 500 banks index has slumped some 11 per cent this month against a 5.5 per cent drop for the broader index in the same period. Among the hardest hit were shares of Bank of America BAC-N, which have fallen 16 per cent this month. Shares of Wells Fargo & Co WFC-N have slumped about 14 per cent, and those of JPMorgan Chase & Co JPM-N are down over 6 per cent. Signs of pessimism over the economy have crept into asset prices in recent weeks, as investors grow increasingly worried that the Federal Reserve’s most aggressive monetary policy tightening in 40 years – aimed at reducing inflation – will also hamstring growth Treasury yields, which move inversely to prices, have recently tumbled to three-month lows, signalling that growth worries may be pushing investors into bonds. Others have pointed to energy shares, which have...

A majority new customers for Canadian banks are immigrants, eclipsing the growth from young adults growing up or customers switching institutions. Fred Lum/the Globe and Mail Competition is heating up among major banks to land new customers arriving from abroad, as Canada ramps up its immigration targets and a pending bank merger adds pressure to an already crowded banking market. The largest Canadian banks have spent years building and honing offerings for newcomers to Canada, as well as referral networks to reach them before they arrive. That’s for good reason: A large majority of banks’ new customers are immigrants, far eclipsing the growth that comes from young adults growing up, or established clients switching financial institutions. Canada set an annual immigration record in 2021, when it welcomed 405,000 new permanent residents. Now the country is opening its doors wider in an attempt to fuel economic growth, aiming to attract at least 500,000 newcomers annually by 2025. That...

Opinions expressed by Entrepreneur contributors are their own. Imagine this. John Carter begins his job as the country club's new finance and administration director by reconciling its payroll journal entries with employee payroll logbooks provided by its payroll processor. It takes him weeks and distracts him from other important issues. Eventually, Carter deduces that the club's HR director is misappropriating thousands of dollars in overpayments to herself and other employees. Without reconciliation, Carter might not have been able to discover the fraud. He might have caught it sooner — maybe even prevented it — if the club had a monthly or biweekly reconciliation policy that provided tight oversight of its bookkeeping. Reconciliation reliably helps monitor cash by cross-validating accounting data with an independent financial record like a bank statement to reduce errors, duplicated entries and inaccurate information. Does your accounting data show m...

The logo of EQ Bank on a building in Toronto, on Dec. 16, 2017. CHRIS HELGREN/Reuters The hardest job in Canadian business is getting people to break away from the Big Six banks to try an alternative. In good times and bad, customers stick to the big banks like bugs on a windshield. Alternative banks now offer dramatically better rates on savings and guaranteed investment certificates in many cases, yet people have been flocking to the big banks. “In challenging times, there is a flow to quality,” said banking industry consultant David McVay. Looks like we need a broader definition of quality. What the big banks offer is size, stability, longevity and a national network of branches. For a quality alternative, consider the EQ Bank Card launched Wednesday. Think of it as what results when a high-interest savings account gets together with what we should now call a transactional account – the term “chequing account” seems dated. EQ is the online banking division of Equitable Bank, which...

Office of the Superintendent of Financial Institutions (OSFI) Peter Routledge in Ottawa. Dave Chan/Tausi Insider Canada’s banking regulator is proposing big changes for housing finance, with potentially three new limits on how lenders grant mortgages. The proposal comes after the Bank of Canada has ramped up interest rates by four percentage points since March 1, the average Canadian home price has plunged 22.4 per cent in the past nine months and the threat of recession looms. On Thursday morning, the Office of the Superintendent of Financial Institutions (OSFI) released the new proposed mortgage guidelines for public comment. Essentially, OSFI wants to skim another layer of the least-qualified borrowers off the federally regulated mortgage market. But how they’ll do that is not yet determined. “We’ve thrown out some ideas we’re considering,” OSFI Superintendent Peter Routledge told Tausi Insider in an interview. “We’re opening up the consultation early. We want ideas. We want const...

At an international symposium on central bank independence in Sweden last week, Federal Reserve chair Jerome Powell had a simple message for the high-powered audience about what monetary policy makers should do to preserve their freedom from political meddling. “We should stick to our knitting,” Mr. Powell said. “It is essential that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day. Taking on new goals, however worthy, without a clear statutory mandate, would undermine the case for our independence.” The mere existence of the event – organized by Sweden’s central bank and attended by a who’s who of monetary policy thinkers, including the heads of four G7 central banks – would have been hard to imagine a few years ago. Central bank independence was more or less a given, at least among the world’s advanced economies. But that independence is being challenged by critics and politic...

Bank towers at the four corners of King St. West and Bay St. are photographed on Oct 1 2018. Clockwise from top left are Bank of Montreal, TD, CIBC and ScotiaBank. Fred Lum/the Globe and Mail As Canada’s big banks wrapped up their past fiscal year and looked forward into a period of economic uncertainty, they forecast that things were going to be … pretty okay, actually. I wasn’t eavesdropping in the boardrooms. Instead, I’ve surveyed the fine print of the banks’ securities filings, which detail some of the economic projections they use to forecast potential loan losses. All of the banks give some degree of insight into their estimates of Canada’s gross domestic product, unemployment rate and housing prices for the following 12 months. And as of Oct. 31, only one – Royal Bank of Canada RY-T – thought the economy would contract, to the tune of 0.2 per cent. The rest were still putting GDP growth in their “base case” – or most likely – scenarios. We could call those forecasts “the good...