September 15, 2020, by Kevin Orland
Three of Canadaâ€™s six biggest banks said they expect most borrowers who took advantage of pandemic-related deferral programs to resume payments, countering fears of a sharp increase in impaired loans.
Chief Executive Officer Brian Porter said in the statement that Scotiabank now has $39 billion (US$30 billion) of deferral exposure, down from $41.5 billion as of July 31, and expects the â€œvast majorityâ€ of its remaining balances to expire this quarter,
Bank of Montreal Chief Financial Officer Thomas Flynn said he doesnâ€™t expect a â€œradically different outcomeâ€ for the loans that are still deferred.
Royal Bank of Canada CFO Rod Bolger said that of the mortgages that his bank has on deferral, the average loan-to-value ratio is in the mid-50s and borrowers have average FICO scores higher than 750.
Most borrowers who deferred mortgages will resume payments, Canadian banks say
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