Even with rising recession risk,
In the most recent financial quarter,
Big 5 Canadian banks continued to release reserves.
In Q2 F’22, the total allowances were down another $0.9 billion CAD.
The big 5 banks hiked reserves by $12.6 billion in 1st year of the pandemic.
So far, more than 70% of the build-up has been released.
Key Risk Factors:
Dampened consumer confidence
Persistent high inflation
Geopolitical risk
However, for the time being:
Credit quality is still strong
Consumers still have money in the bank
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