RBC CEO sees interest rates coming down next Year, allowing for soft landing
BNN Bloomberg
Interest rates are likely to come down next year, Royal Bank of Canada Chief Executive Officer Dave McKay said, allowing for the lender’s customers to avoid major pain when the majority of its mortgage book reprices in 2025 and 2026.
“We should be fine,” McKay said Wednesday at the Scotiabank Financials Summit. “We have lots of room to manage a soft landing here and we expect that to happen.”
Higher borrowing costs have cut into mortgage growth at Canada’s biggest banks, with would-be homebuyers sitting on the sidelines. At the country’s five largest lenders, including Royal Bank and Toronto-Dominion Bank, residential loan growth slowed to 4 per cent in the fiscal third quarter, compared with annual growth of 9.8 per cent a year earlier. Meanwhile, the amount of impaired loans in the five firms’ core Canadian banking businesses almost doubled from a year earlier.
The Bank of Canada began its recent rate-hiking campaign in March 2022, raising its trend-setting policy rate from 0.25 per cent to, most recently, 5 per cent, the highest in 22 years.
