Toronto-Dominion Bank (NYSE:TD) is about to release earnings. Ponder this Bear Case Scenario:
American analysts are fixated on a Canadian Housing Bubble. This is discouraging many American investors from accumulating more shares at the present. Many mortgages have been underwritten with very low-interest rates. As rates increase and revert to the mean some chickens will come home to roost.
As the TD continues to expand outside of the Canadian Market there are risks of expertise and understanding of local conditions. Banking is like Politics. It’s all so very local.
Low net interest rate margins will be a negative factor as Canadian Banks increase competition for quality business.
George Gutowski writes from a caveat emptor perspective