Canadian banks erase $19.7 billion in value on SVB contagion
BNN Bloomberg
The fallout from Silicon Valley Bank’s collapse has led to a continent-wide selloff in financial stocks erasing $19.7 billion in value from Canada’s top banks in the last four days.
Some of the nation’s biggest banks, including Bank of Nova Scotia, Bank of Montreal and Toronto-Dominion Bank fell more than 2 per cent on Friday. With banking equities far and away the largest sector by weighting of the S&P/Toronto Stock Exchange Composite Index, Canada’s main stock benchmark slumped more than the S&P 500 as the biggest U.S. bank failure in more than a decade roils the market.
Large Canadian banks have acquired regional U.S. banks in recent years, increasing their exposure to the banking fallout from the failure of Silicon Valley bank, which entered receivership Friday. SVB Financial Group had opened a Canadian office in 2019 and listed e-commerce darling Shopify Inc. as a client. Shopify did not respond to a request for comment and was among the biggest decliners in Toronto on Friday.
“Liquidity positions across the Canadian banks are strong,” CIBC Capital Markets analyst Paul Holden wrote in a note defending Canada’s financial sector.
