RE:RE:RE:RE:Time to accumulateThey can make more money on loans and mortgages but there is also moe risk of creditors defaulting on those loans and mortgages because of an inability to make the higher payments. JPMorgan just put aside $1B for potemtial loan losses. That is $1B that they cannot loan out and make money on on top of the potential non-payments and loan losses.
JPMorgan is an American bank and they are understandably skiddish now with the recent housing collapse in the US. BNS and Canadian Banks in general have more stringent loan and mortgage requirements so we won't know until they report earnings how much they have tucked away for a rainy day but I doubt it will be nearly as much.
The market will price all banks together until they prove they are not as at risk or tucking as much away but they also have to deal with the new Federal budget bank tax. It will be interesting to see how well it all shakes out in the upcoming ER.
Until then, we collect our $1/ share/ quarter...safely.
GLTA
FiddyFiddyOddzz wrote: I was under the impression the higher interest rates go, the more money banks make.
Given today was the first time in 22 years the Bank Of Canada had raised rates by 0.5 %, I expected a decent jump in stock price but that didn't happen...
Biggy G wrote:"True they are at the moment. However with Trudeaus big housing stock promises the banks will be doing the mortgages not to mention rate increases so it could be a bonanza for the banks looking forward imo"