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Globe says CIBC, rivals need to show lending rebound

2021-07-22 07:11 ET - In the News

See In the News (C-CM) Canadian Imperial Bank of Commerce (CIBC)

The Globe and Mail reports in its Thursday, July 22, edition that Canada's large banks are under pressure to show that their core lending business is rebounding after investors appeared unimpressed with the latest round of U.S. bank earnings. The Globe's James Bradshaw writes that U.S. bank stocks tumbled last week as lenders reported earnings, falling 3.5 per cent on average. Canada's largest banks will look to avoid the same fate when they report results for the fiscal third quarter, which ends July 31. Reporting season begins on Aug. 24 and although economies have started roaring back to life, consumers and businesses have been slow to start borrowing money again, limiting the income banks can earn from interest on loans. CIBC analyst Paul Holden says net interest income at Canadian banks needs to do better to escape a similar outcome. He says there are "reasons to believe this will be the case." He expects loan growth to return later this year. The dip in borrowing is most evident with credit cards. National Bank's Gabriel Deshaine says, "There is no clearer sign of the decline in consumer lending than the 20-per-cent drop in Big-6 credit card balances from pre-COVID levels."

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