Financial Sector Update for 04/17/2018: BMO.TO, BNS.TO, CM.TO, NA.TO, TD.TO, RY.TO

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- Lending Volumes Rebound, Buoyed by Stronger Commercial

Overall, Barclays noted, domestic lending volumes rebounded, up 0.6% month on month (vs. -0.6% in Jan) and up 6.0% from a year ago. It said the improved loan growth rate was buoyed by strength in both personal loan growth, up 0.1% MoM (vs. -0.2% in Jan), and commercial lending where volumes posted a strong rebound, up 2.8% (vs. -2.7% in Jan). Among the 'Big 6', Barclays estimates that BMO garnered the strongest lending performance, up 1.3%, while among the regional banks, Barclays estimates CWB (+0.3% month on month) outperformed LB (-0.4% MoM). On an annual basis, it estimates Canadian Western continues to hold top spot, up 8.9% from a year ago.

- Residential Mortgage Growth Remains Flat

By and large, Barclays noted, residential mortgage volumes held steady in February, up 7 bps (vs. +6 bps in Jan), and remained positive for a 50th consecutive month. Among the 'Big 6' banks, Barclays estimates Scotia set the pace, up 0.2% MoM. "Looking ahead, while only one data point, after two months of declines in January and February, positive March home sales could be a first sign of the seasonally stronger spring," it said. But, Barclays added, "compounded by the weakness to kick off 2018, a sluggish spring selling season could translate into more challenging mortgage growth in the second half of the year."

- Deposits Strengthen, Fuelled by Both Demand/Notice and Fixed Term

Overall, Barclays noted, deposit growth rebounded, up 0.8% month on month, buoyed by stronger growth in demand and notice deposits, up 0.6% MoM, while fixed-term deposits outpaced, up 1.3% MoM. Amongst the 'Big 6', Barclays estimates NA outperformed, up 2.7% M/M, while TD gained 6.5% from a year ago.

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This article appears in: Investing , Banking and loans

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