July 31, 2013
August 23, 2013
Does anyone think that the move by the big banks to raise mortgage rates will have any impact on the interest rates paid by online banks such as People's Trust, Canadian Direct Financial, etc., on HISA deposits? Or, will those interest rates only move when the chartered banks hike their prime lending rates? Views appreciated.
December 12, 2009
I fully expect the "Big 5" banks and other institutions, which have been seen their net interest income (NII) margin) hit over the last few years on falling lending rates, will use the opportunity of rising lending rates to widen that margin and increase overall revenue & profit. We'll see deposit rates grow eventually, but I think the first percent or two in lending rate hikes will see flat/nill deposit rate hikes so that there becomes at least 1-2% additional spread. Then, you'll probably see deposit rates grow but at a lower than historical rate , by at 0.25% for every 0.5% in a bank's prime lending rate hike.
Coupled with the process and organizational efficiencies driven over the last few years, and continued constraint on branch network growth, I think you will see record bank profitability in the next few years, so long as Canada's housing market does not crash and rates do not rise much faster than personal incomes.