September 15, 2020, by Kevin Orland
Three of Canada’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 “vast majority” of its remaining balances to expire this quarter,
Bank of Montreal Chief Financial Officer Thomas Flynn said he doesn’t expect a “radically different outcome” 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.
What does this mean?
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