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RBC Joins TD in Betting a Softer Economy Won’t Spur Defaults

  • Profit at Canada’s two largest banks tops analysts’ estimates
  • TD finance chief says credit conditions remain ‘very strong’
Canada’s two largest banks laid down a vote of confidence that consumers and businesses will keep making loan payments even if inflation and rate increases throw the brakes on the economy.

Canada’s two largest banks laid down a vote of confidence that consumers and businesses will keep making loan payments even if inflation and rate increases throw the brakes on the economy.

Photographer: Cole Burston/Bloomberg
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Canada’s two largest banks laid down a vote of confidence that consumers and businesses will keep making loan payments even if inflation and rate increases throw the brakes on the economy.

Royal Bank of Canada surprised analysts on Thursday by releasing C$342 million ($267 million) in provisions for credit losses in the fiscal second quarter, confounding estimates that the bank would stockpile an additional C$241.2 million in capital to protect against loans going bad. Toronto-Dominion Bank set aside C$27 million in provisions, about a tenth of what analysts expected.