The Bankwatch

Tracking the consumer evolution of financial services

Bank of Canada Monetary Policy Report Apr 2009 sees economy worse that projected, but consumer credit is growing

Bank of Canada has released its quarterly Monetary Policy report.  It is useful here in the context of Canada and the impact on consumers, particularly as Canada has been painted as being in better shape than other countries.  Consumer confidence represented by purchasing is down, but consumer credit is still growing at a slower pace.  They question will be to what extent credit defaults arise over upcoming months.

Speech and Report:

Global industrial production has fallen sharply …

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… and Canadian GDP has fallen sharply too, and worse than predicted earlier ..

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… while the Canadian hit on wealth has been less than the US the impact on Canadians saving (spending less) is similar.

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Bottom line – the impact on Canadian banks and merchants must be to expect significantly less spending though to 2011 at the earliest.

Credit growth and credit conditions in Canada remain tight according to the report, although credit is still growing, albeit at a slower pace. 

 

Mar-09
C$ Billions Outstanding % Distribution 12-month  Dollar Change 12-month % Change 3-month % Change (annualized) 1-month % Change (annualized)
(C$ Billion)
Total household credit 1324 100 100.5 8.2 6.7 4
Consumer Credit (1) 416 31.5 29.3 7.6 9.4 5.8
Chartered Banks 299 22.6 36.6 13.9 13.1 6.7
Non-Banks* (2) 64 4.9 -1.4 -2.1 6.5 8.3
Loans securitized by banks and non-banks* 53 4 -5.9 -10.1 -9.9 -9.9
Residential Mortgage Credit 908 68.6 71.3 8.5 5.5 3.2
Chartered Banks* 435 32.9 -29.3 -6.3 -14.7 -26.7
Non-Banks* 187 14.1 8.5 4.8 4.1 3.4
Loans securitized by banks and non-banks:
NHA MBS program* 266 20.1 96.2 56.7 36.8 63.8
Other securitization products* 20 1.5 -4.1 -16.9 -15.3 -15.9

Written by Colin Henderson

April 23, 2009 at 14:32

Posted in Canada, economy

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