TORONTO, Jan 11 (Reuters) – Canadian bank heads on Monday forecast a rosier growth outlook for this and next year, driven by pent-up consumer demand, continued residential mortgage growth and ongoing government stimulus to help offset the impact of the coronavirus pandemic.<\/p>\n
Canada\u2019s biggest banks ended fiscal 2020 with better than expected earnings, while warning of an uneven economic recovery and a slower housing market. But they struck a somewhat more optimistic note at the RBC Capital Markets Canadian bank CEO conference.<\/p>\n
\u201cWe\u2019re definitely feeling good about things,\u201d said Dave McKay, chief executive of Royal Bank of Canada, the country\u2019s largest lender.<\/p>\n
\u201cThere\u2019s a lot of frustrated spending sitting on the sidelines,\u201d he said. \u201cMortgage activity and … purchase activity continued to be very strong through the end of the year, so we\u2019re feeling pretty confident we\u2019ll beat the forecast of slower growth.\u201d<\/p>\n
In a note to clients on Sunday, National Bank Financial analyst Gabriel Dechaine wrote that \u201cgreen shoots\u201d of rebounding loan growth, particularly in consumer categories, are already visible.<\/p>\n
Bank of Montreal CEO Darryl White forecast economic growth of as much as 5% in Canada and the United States this year and about 4% in 2022.<\/p>\n
\u201cWe may see a drastically better economic environment in the back half of 2021,\u201d he said. \u201cWhen we get through the next two to four months, and see the vaccine overtake the virus, then we\u2019ll be in a period where loan growth, toward the back end of the year, can begin to be very substantial.\u201d<\/p>\n
Still, the CEOs warned that margins will continue to face pressure as interest rates remain low.<\/p>\n
\u201cWe\u2019d like to see a more normalized interest rate environment, which is a sign that things are starting to recover,\u201d Victor Dodig, CEO of Canadian Imperial Bank of Commerce, said.<\/p>\n