Canadian households are borrowing but many are saving too
After posting about the US borrowing landscape, I thought I would look at Canada. I was looking at the latest Bank of Canada statistics for Canadian chartered banks as a reference point. I compared the end of 2006, right before the banking crisis began to now. These numbers are interesting and display behavioural change amongst consumers and amongst bank marketing.
| Millions | Nov 2006 | Oct 2010 | % increase |
| Personal Loans | $ 40,936 | $ 53,400 | 30% |
| Credit Cards | $ 38, 627 | $ 57,276 | 48% |
| Lines of credit | $ 123,310 | $ 218,937 | 78% |
| Mortgages | $ 421,138 | $ 500,217 | 19% |
| Total | $ 624,011 | $ 829,830 | 33% |
The shift towards non-amortised debt is $114 Bn during this period. The increase in mortgage debt is nominal in comparison.
Next I looked at savings behaviour during the same period and interestingly the numbers are surprisingly healthy although there is a clear shift towards shorter term, non fixed rate deposits.
| Millions | Nov 2006 | Oct 2010 | % increase |
| Chequable | $ 82,486 | $ 201,887 | 145% |
| Non Chequeable | $ 85,514 | $ 154,271 | 80% |
| Term deposits | $ 277,725 | $ 310,596 | 12% |
| $ 445,725 | $ 666,754 | 50% |
Relevance to Bankwatch:
The numbers seem to reflect a positive position for Canadians in that there is enough cash in the aggregate. But we we do know that approximately 45% of Canadians keep balances on their credit cards permanently so it bears asking how much of the disposable cash is also owned by credit card holders and or the lines of credit holders. Those are the ones that reflect higher risk and rate adjustments if and when we enter a period of higher interest rates.
