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UPDATE 1-Moody's downgrades 6 Canadian banks on rising private-sector debt
May 11, 2017 / 12:40 AM / in 5 months

UPDATE 1-Moody's downgrades 6 Canadian banks on rising private-sector debt

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May 10 (Reuters) - Moody’s Investor Service on Wednesday downgraded the long-term ratings for six Canadian banks, citing a more challenging operating environment for banks in Canada for 2017 and beyond, could lead to a deterioration in the banks’ asset quality, including increasing private-sector debt.

Weakening credit conditions in Canada include an increase in private-sector debt to 185 percent of Canada’s gross domestic product last year, the ratings agency said.

"Continued growth in Canadian consumer debt and elevated housing prices leaves consumers, and Canadian banks, more vulnerable to downside risks facing the Canadian economy than in the past," Moody's senior vice president David Beattie said in a statement. (bit.ly/2pAsPox)

Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce , National Bank of Canada and Royal Bank of Canada were downgraded by one level, Moody’s said in the statement.

The ratings agency also downgraded ratings for the affiliates of the six banks. (Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Leslie Adler)

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