By Nivedita Balu
TORONTO (Reuters) – Limited exposure to U.S. commercial real estate (CRE) is giving shareholders hope that Canada’s big banks can weather the storm that has rocked rivals in the United States and Europe.
However, investors will be on alert for signs of stress when Canada’s top six banks next week post first quarter earnings, that will continue to be pressured by high bad loan provisions.
The beleaguered U.S. CRE sector has taken a toll on banks in Europe and Asia, with borrowers at the risk of defaulting on loans as high interest rates and low occupancies hit valuations.
The recent sell-off of New York Community Bancorp has soured sentiment and dragged down U.S. peers, reviving fears of a global contagion stemming from the sector.
“While the space is undoubtedly challenged … it will be largely unimpactful to the Big-6 Canadian banks given their diverse loan books,”…
