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“The Variable Customer Is In Good Shape,” Says Scotiabank

Steve Huebl
Publication date:
November 29, 2022
Article Summary: 

Scotiabank announced that its variable-rate mortgage portfolio is strong, and its customers are in good shape. Despite the rising interest rates, the bank's variable-rate mortgage customers have payments that adjust regularly to cover the higher costs. Additionally, the creditworthiness of variable-rate customers is higher than their fixed-rate counterparts. The bank is not concerned about the credit side of the mortgage position, and the variable customers have sufficient liquidity to absorb payment increases. During the Q4 earnings call, Scotia reported a 20% year-over-year drop in net income, but mortgage volumes increased by 11%. The bank's total portfolio of residential retail mortgages rose to $302 billion in Q4, up from $280 billion a year ago. The bulk of loans, $94.4 billion, will be up for renewal in 2026.


Scotiabank, variable-rate mortgage portfolio, rising interest rates, net income, mortgage volumes, adjustable-rate mortgages, trigger rate, credit pressure, cash flow management, creditworthiness, fixed-rate customers, deposit accounts, liquidity position, maturity schedule, residential retail mortgages, net interest margin, provisions for credit losses, conference call, cross-selling, balanced balance sheet, NIM, funding costs, higher expenses, higher tax rate.

Source Citation: 
Steve Huebl
“The Variable Customer Is In Good Shape,” Says Scotiabank
November 29, 2022
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