The Bankwatch

Tracking the consumer evolution of financial services

Canadian Banks write off $2.1Bn in US Sub Prime mortgages

So we have all the main expected players having reported in Canada now, with a projection on National Bank. As predicted it exceeds $2bn. There has been nothing like this since in size since the 80’s real estate losses, which were driven by high interest rates. This situation in 2007, however is driven purely by bad lending practices, and risk assessment.

  • RBC $ 360M
  • CIBC $ 753M (includes write down from 2nd Qtr)
  • BMO $ 320M
  • BNS $ 190M
  • National $ 500M (projected)

$2,123M

Other significant losses include the Natural gas commodity speculation
$700M (BMO). Note the Banks are able to mask these losses
somewhat, with expected one time gains in the areas of Visa and MasterCard.

reportonbusiness.com: BMO takes $320-million in debt writedowns

Bank of Montreal said it will take pretax writedowns of about $320-million in the fourth quarter as a result of its exposure to complicated credit products ranging from asset-backed commercial paper to structured investment vehicles.

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Written by Colin Henderson

November 17, 2007 at 16:47

Posted in Uncategorized

4 Responses

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  1. […] Canadian Banks write of $2.1Bn in US Sub Prime mortgages So we have all the main expected players having reported in Canada now, with a projection on National Bank.  As predicted it exceeds $2bn.  There has been nothing like this since in size since the 80’s real estate losses, which were driven by high interest rates.  This situation… […]

  2. Interesting that TD is not on this list (yet) though their stock is nonetheless off by $10 in recent weeks.

    700M loss in commodity speculation amazes me

    As does CIBC’s gigantic writedown. How is that de-risking of the bank going there McCaughey? I can’t believe what shareholders put up with and the core banking management. For every dollar of spectacularly consistent earnings the retail bank earns every year, the investment bank finds a way every few years finds a way to shoot themselves in the head. Why is this one company?

    Time for canadian banks to spin off their wealth management arms from the retail. These two very different beta’s don’t belong under the same ticker.

    thomaspurves

    November 20, 2007 at 17:26

  3. […] TD Canada seems to have dodged the mess completely. Other Canadian banks didn’t fare as well. […]

  4. […] of never ending announcements of new sets of losses, some tied to subprime, and some tied to bad decision making and market speculation. Those losses have grown consequently since that 2007 […]


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