Canadian banks bullish on Trump's pro-growth agenda

Tue Jan 10, 2017 2:50pm EST
 
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By Matt Scuffham

TORONTO (Reuters) - Canadian banks are looking to expand in the United States, taking advantage of pro-growth policies expected to be pursued by President-elect Donald Trump's new administration, senior executives told a banking conference in Toronto.

The valuations of U.S. regional banks have soared following Trump's victory in the Nov. 8 election, supported by the prospect of higher interest rates, softer banking regulation and a lower corporate tax rate.

Royal Bank of Canada (RY.TO: Quote) Chief Executive Dave McKay expects the bank to benefit from changes made by the incoming president, he said at the RBC 2017 Canadian Bank CEO conference.

"We do see a stronger growth agenda in the United States, we do anticipate pro-growth policy coming out of the new administration," he said. "That would potentially lead to higher rates which is very good for our franchise in the United States."

Canada's largest banks want to expand in the United States to offset sluggish growth in their domestic market.

Toronto-Dominion Bank (TD.TO: Quote) CEO Bharat Masrani said the bank would look at acquisition opportunities in the U.S. Southeast or expanding its credit card business in the United States.

"We are organically growing right through our franchise but I would like to see more in the southeast of the U.S. because I think there's more opportunity there," he said.

TD, Canada's second-biggest bank, has grown to become one of the 10 biggest banks in the United States, where it has a major retail presence serving 9 million people through 1,300 branches.   Continued...

 
A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto, January 22, 2015. REUTERS/Mark Blinch/File Photo