Financial struggles for Canadians: Big 6 Canadian Banks wrote off $3.49B in loans during Q3 2024 (May 1 to July 31), a 48% increase compared to Q3 2023!
This figure is significantly higher than the $2.6B written off in Q3 2020 during the peak of COVID-19, and more than double the $1.5B in Q4 2008, the peak of the financial crisis.
While all six banks saw their write-offs rise year-over-year, TD, National Bank, and CIBC managed to reduce their write-offs compared to the previous quarter.
Canadian banks have substantial exposure in the U.S. and Latin America. These write-off numbers primarily reflect the challenges both Canadians and Americans are facing in repaying their loans. However, the banks remain secure, thanks to the substantial Provision for Credit Losses (PCL) reserves they’ve recently set aside.
The Big 6 banks have set aside $4.32B in PCL this quarter (Q3 2024), following $4.36B in the previous quarter, signaling potential financial struggles for the Canadian economy in the coming quarters.
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