Canadian Industrial Outlook: Banking—Winter 2019

The Conference Board of Canada, March 20, 2019
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This report examines the short-and medium-term economic and profitability outlook for Canada’s banking industry.

Document Highlights

Slower Growth—After expanding by 1.8 per cent in 2018, economic growth in Canada is expected to remain modest in the medium-term. As growth in industry drivers such as mortgages and consumer loans moderates, banks will face difficulties in maintaining the strong performance seen over the past five years.

Open Banking—The Department of Finance Canada is currently holding public consultations on open banking, which allows consumers and firms to share financial data across many banks. The innovative fintech system will promote competition and efficiency in the sector, though privacy and financial safety concerns are likely to stall its mainstream adoption.

New Deposit Rules—The Office of the Superintendent of Financial Institutions has proposed rules to increase the share of less stable deposits that financial institutions must hold as cash rather than lend. While the new rules would dampen the profitability of many lenders, the rules would reduce the likelihood of lenders’ becoming insolvent and would allow Canada to remain among the soundest banking systems globally.

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