Expecting more Canadians will be unable to pay off loans and credit card debt as the country heads into a potential recession, Canada’s six largest banks have put aside a combined total of more than $2.4 billion to cover possible losses.
“Unfortunately some people can not repay loans that they have taken out,” Laurence Booth, a professor of finance at the University of Toronto’s Rotman School of Management, told CTVNews.ca. “This happens regularly but it tends to spike when we go into recession and people lose their major source of income, such as their employment or small business income. “
Known as provisions for credit losses, or PCLs, the $2.49 billion in reserves were outlined in recent first quarter results posted by Canada’s six largest banks: the Royal Bank of Canada, TD Bank, Scotiabank, BMO, CIBC and National Bank.
This marks a significant increase from the $373 million the six …