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2019 Q3 Canadian Bank Earnings – Mortgage Edition

The third quarter of 2019 saw moderate growth for Canadian bank earnings.

Canadian Mortgage Trends recently reported on the 2019 Q3 Canadian bank earnings in the mortgage market. Here are some of the highlights:

Residential Mortgages

Most of Canada’s Big Six banks saw moderate growth in their residential mortgage portfolios from 2018 Q3. The only bank that saw a downtrend was CIBC.

BMO’s residential mortgage portfolio rose to $110.5 billion. In 2018 Q3 it was at $107.2 billion.

  • CIBC’s residential mortgage portfolio remained flat from Q2 at $201 billion, but down from $203 billion year-over-year.
  • National Bank’s residential mortgage and HELOC portfolio rose to $69.3 billion in Q3, up from $66.7 billion year-over-year. Uninsured and insured mortgages made up 67% of that combined.
  • RBC’s residential mortgage portfolio rose to $256 billion, up from $239 billion a year ago.
  • Scotiabank’s total portfolio of residential mortgages rose to $222 billion in Q3, up from $212 billion in 2018.
  • TD Bank’s residential mortgage portfolio was $197.5 billion in Q3, up from $191 billion in Q3 2018.

HELOC Portfolios 

HELOC portfolios also saw mixed growth. Some banks, such as BMO and TD Bank, saw a rise in HELOCs, however, others, such as CIBC and RBC, saw a decrease.

  • BMO’s HELOC portfolio went up from $32.3 billion in 2019 Q2 to $33 billion in Q3, of which 57% is amortizing.
  • Year-over-year CIBC’s HELOC portfolio decreased to $21.6 billion in Q3 from $22 billion in 2018 Q3.
  • National Bank’s residential mortgage and HELOC portfolio rose to $69.3 billion in Q3, up from $66.7 billion year-over-year. HELOC’s represented 33% of the distribution.
  • RBC’s HELOC portfolio was also down year-over-year from $40.2 billion in 2018 to $39.4 billion in 2019.
  • TD Bank’s HELOC portfolio rose substantially from $83.4 billion in 2018 to $90 billion in 2019.

Insured vs. Uninsured Mortgages

 In 2019 Q3, more residential mortgages were uninsured. The uninsured figure is also on the rise from 2018 Q3.

 43% of BMO’s residential mortgage is insured, down from 47% a year ago.

  • National Bank had 40% of residential mortgage portfolio insured vs. 42% a year ago.
  • RBC had 64% of its mortgages uninsured, up from 59% a year ago.
  • Scotiabank had 60% of its mortgage portfolio uninsured up from 55% in 2018.
  • TD had 68% of its residential real estate secured lending portfolio uninsured up from 63% a year ago.

 Mortgage Portfolio Locations

 Several of the Big Six banks reported on how their residential mortgage portfolio was dispersed nationally. While some markets differed slightly from 2018, the majority remained unchanged.

  • For CIBC, $27 billion of the residential mortgage portfolio came from the Greater Vancouver Area (down from $28 billion in 2018). $63 billion of the residential mortgage portfolio came from the Greater Toronto Area (the same as in 2018).
  • Quebec represented 54% of the National Bank’s mortgage book (down from 55% in 2018). Ontario made up 26% of the National Bank’s book and Alberta made up 8%, both unchanged from 2018.
  • TD Bank had 51% of its residential mortgage portfolio in Ontario, 19% in B.C., 18% in the Prairies, 9% in Quebec, and 3% in Atlantic Canada.

See the full 2019 Q3 breakdown on Canadian Mortgage Trends: https://www.canadianmortgagetrends.com/2019/10/q3-2019-bank-earnings-mortgage-morsels/

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