S&P cuts outlooks to negative at Canada’s six biggest banks

Canada’s six biggest banks - Toronto-Dominion Bank (NYSE:TD), Royal Bank of Canada (NYSE:RY), Bank of Nova Scotia (NYSE:BNS), Canadian Imperial Bank of Commerce (NYSE:CM), Bank of Montreal (NYSE:BMO) and National Bank of Canada (OTCPK:NTIOF) - had their outlooks cut to negative from stable by Standard & Poor’s because of regulatory changes that could affect bondholders.

S&P says the outlook revision reflects its "expectation of reduced potential for extraordinary government support arising from implementation of the proposed new elements of the resolution framework for Canadian banks."

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Comments (22)
  • justin1980
    , contributor
    Comments (16) | Send Message
    Good. Hopefully this will bring about a buying op.
    8 Aug 2014, 05:56 PM Reply Like
  • yohan
    , contributor
    Comments (14) | Send Message
    Absolutely foolish, if a man knows not what to do he ought not do what he knows not, S&P knows not. However a prudent man would encourage their silliness. and buy buy buy. as a matter of fact, keep up the good work, you maka me proud.
    11 Aug 2014, 06:44 PM Reply Like
  • tobaccosand
    , contributor
    Comments (32) | Send Message
    Well. they are still going up.
    12 Aug 2014, 10:21 AM Reply Like
  • marc heilweil
    , contributor
    Comments (180) | Send Message
    the joke is that Canadian banks are so well run and capitalized that the government is not needed.
    8 Aug 2014, 05:57 PM Reply Like
  • tobaccosand
    , contributor
    Comments (32) | Send Message
    Agreed. S&P needs to do a little more thinking.
    8 Aug 2014, 06:15 PM Reply Like
  • EatMyVoltage
    , contributor
    Comments (66) | Send Message
    S&P says they're in trouble? This must mean that the Big 6 Canadian banks didn't pay S&P enough. Either that or they didn't have enough toxic mortgage backed securities to qualify for an AAA rating from S&P.
    8 Aug 2014, 06:26 PM Reply Like
  • pertl
    , contributor
    Comments (37) | Send Message
    Eat my Voltage Is paticularly spot on.
    S&P have nothing to contribute here.
    Of course if these banks fail then our investment is toast anyhow, no matter
    if they bail it out or have us bail in.


    Sir Paul
    8 Aug 2014, 07:01 PM Reply Like
  • user1416
    , contributor
    Comments (951) | Send Message
    Heck, last Friday, TD was passing out $20s in the lobby to all their customers. Must have impacted their reserve ratio..
    8 Aug 2014, 08:37 PM Reply Like
  • piano man
    , contributor
    Comments (70) | Send Message
    S&P what a laugh
    8 Aug 2014, 09:24 PM Reply Like
  • brent_vossler
    , contributor
    Comments (276) | Send Message
    I have BMO in a DRIP. This will only add to my stockpile of shares and I may buy more on the market.
    8 Aug 2014, 10:03 PM Reply Like
  • lorneb
    , contributor
    Comments (330) | Send Message
    I followed the predictions of a number of respected economists for about 10 years. I found their predictions were wrong about 50% of the time. I also read/listened to the advice by analysts employed by several well known brokerage houses for several years, most of them were wrong most of the time. That is why the words "do your own due diligence" is such an important mantra. It is your money, you are the only one you can trust with it so study the game before trusting what some so called expert says. Most of them are no more intelligent than the average person. They would like us to believe they have access to information and expert experienced persons that the average person doesn't. Not so! One benefit of the writers who post here is they don't try to pass themselves off as experts, many just offer their own opinion which is food for thought and discussion.
    8 Aug 2014, 10:04 PM Reply Like
  • canb888
    , contributor
    Comments (673) | Send Message
    "...because of regulatory changes that could affect bondholders" that should be good for common shareholders as bondholders would be sharing the risk with the common shareholders, thus the cut in outlook should be on the bonds not on the common shares. Moody's cut the outlook earlier on the Canadian banks' bonds too but SA and other media all reported likewise as if the outlook cut were for the common shares. I guess that helps make a market.
    8 Aug 2014, 10:09 PM Reply Like
  • canb888
    , contributor
    Comments (673) | Send Message
    This specific question S&P said it "will explore in assessing the
    bail-in framework" in their news release "Outlook On Six Big Canadian Banks Revised To Negative Following Review Of Bail-In Policy Proposal" indicates the rating alert is for senior debt and not the common shares!


    "How will banks respond to the bail-in policy with respect to relative
    amounts of loss-absorbing hybrid instruments versus senior debt (with an
    increasing use of hybrids potentially reducing the default risk of senior


    Am I missing something?
    8 Aug 2014, 10:47 PM Reply Like
  • John Krug
    , contributor
    Comments (36) | Send Message
    S&P is a joke. Utterly worthless for purposes of assessing an investment. There are no companies in Canada that are stronger than the banks.
    8 Aug 2014, 10:57 PM Reply Like
  • John Krug
    , contributor
    Comments (36) | Send Message
    S&P is a joke. Utterly worthless in terms of assessing investments. There are no stronger companies in Canada than the banks.
    8 Aug 2014, 10:58 PM Reply Like
  • sethmcs
    , contributor
    Comments (3565) | Send Message
    Criticize S&P all you want but the risk nature of the senior bonds is changing. Bond holders do not want to be shareholders and neither do depositors.
    9 Aug 2014, 01:16 AM Reply Like
  • whatoncewas
    , contributor
    Comments (36) | Send Message
    The amount of people who refuse to read beyond the headline is shocking.
    9 Aug 2014, 06:02 AM Reply Like
  • Brian971
    , contributor
    Comments (5) | Send Message
    Staying Long in BNS, RY and NA.
    9 Aug 2014, 03:23 AM Reply Like
  • joverage
    , contributor
    Comments (57) | Send Message
    From the comments to date it looks like everybody gets it. Stay long and strong (but selective) in this sector. S&P's failure to distinguish TD from the others, vis-a-vis their American market interests and corresponding programmatic growth/profitability, says they're either overly simplistic and generalizing in their analysis or they didn't want to risk criticism from the other five of the "big six" for excepting TD. WHO ARE THESE CLOWNS?
    9 Aug 2014, 09:04 AM Reply Like
  • youngdividend
    , contributor
    Comments (174) | Send Message
    more reason to stay long lol
    9 Aug 2014, 11:30 AM Reply Like
  • obiwantwo
    , contributor
    Comment (1) | Send Message
    if Canadian banks are in trouble, imagine the state of American banks.... oh, right, the government will bail them out. Was anyone charged and prosecuted in any of the banks scandals ? ... oh, right, none.
    10 Aug 2014, 02:38 PM Reply Like
  • Le Statisticien
    , contributor
    Comments (78) | Send Message
    I suggest that we citizens should create a collaborative research effort based on volunteer work where we join forces to establish and keep abreast of a set of statistical indicators of bank health. We might merge data from these indicators to build a prediction model concerning the whole system.
    The expert writing I have seen on this subject suggests that system implosion can be triggered by an unpredictable "accident" happening to one of the 27 leading money-center banks around the world. Is there some way we could join forces to monitor the data of these 27 banks, as a way to develop some Paul Revere type warnings of imminent system implosion?
    10 Aug 2014, 04:57 PM Reply Like
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