Bank of Nova Scotia is about to release earnings. Many American Investor believe Canadian Banks are set up for large real estate and mortgage defaults. Ponder this Bear Case Scenario
Net Interest rate position continues to be under pressure in a low interest rate environment.
High growth international activities earn smaller margins than less risky domestic operations. Incremental growth will be financially disappointing.
The past ten years have been very good to Canadian banks. The next ten years will most likely not be the same.
While there is a significant exposure to mortgages the Canadian government has underwritten much of the credit risk. Canada is “AAA”
George Gutowski writes from a caveat emptor perspective.