Moody's may downgrade several Cdn banks
NEW YORK - Moody’s Investors Service on Friday said it could cut its ratings on several Canadian banks in coming months, including Canadian Imperial Bank of Commerce and Toronto-Dominion Bank, because of economic challenges not fully captured in current ratings.
But the ratings agency added that any cuts would likely be only one notch.
Moody’s also affirmed all RBC ratings except for its supported subordinated debt ratings, which were also placed on review for downgrade.
The reviews reflect worries about high consumer debt levels and elevated housing prices and the ensuing vulnerability of banks from the economy, Moody’s said in a statement.
But the banks “will continue to rank among the highest-rated banks globally following this review,” said David Beattie, a Moody’s vice president, in the statement.
Canadian banks have been eager to diversify their loan portfolios as signs of weakness in the Canadian housing market threaten growth of their residential mortgage businesses, which are their largest revenue stream.