TORONTO (Reuters) – Toronto-Dominion Bank (TD.TO) has approved 60,000 requests for mortgage deferrals received so far as part of efforts to ease the impact of the COVID-19 outbreak on borrowers, the bank’s chief executive officer said on Thursday.
FILE PHOTO: The Toronto-Dominion (TD) bank logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie
Talking to media after the bank’s annual shareholder meeting, TD CEO Bharat Masrani pointed to expectations that the crisis should abate within a few months to play down the risk that borrowers may be unable to repay loans beyond the six-month mortgage deferral.
The approvals are “virtually all” the requests it has received, he said.
“Governments have introduced programs that are unprecedented… and of a scale that should weather the storm over the next while,” he said. “If this continues for a longer period, governments will act… they do have more capacity if they need to do more.”
He added that the bank will maintain dividends, thanks to a strong capital position, contrary to European counterparts who have suspended payouts.
Masrani also reiterated that TD will not cut any jobs in 2020 due to the pandemic.
The crisis comes at a time when Canadian banks were already seeing subdued earnings growth due to lower margins, increasing loan loss provisions, and volatile performance in their capital markets divisions.
Canada’s regulatory relief measures for financial institutions can reduce their credit risk by stimulating demand and employment, ratings agency Moody’s said in a report on Wednesday.
The measures introduced to cope with the pandemic will also be available to borrowers dealing with the fallout of the collapse in energy prices, Masrani said.
“There are, of course, stresses where (energy) prices are, but we haven’t yet seen major shifts in financial metrics,” Masrani said on the media call.
“If this goes on, we will see stresses,” he added. But “we will continue to support long-standing relationships in this space. We’re there for them.”
In pledging to continue to support energy companies, TD joins rival Bank of Montreal (BMO.TO), which said earlier this week that divesting from the fossil fuel industry is not a productive solution to climate concerns and collapsing energy prices.
Canadian banks have grown their oil and gas loan books faster than total lending in recent quarters, with TD among those with the biggest growth.
TD shares rose 1.3% at midday in Toronto, compared with a 2% gain in the Toronto stock benchmark .GSPTSE.
Reporting By Nichola Saminather; Editing by Denny Thomas and Chizu Nomiyama