Canadian banks see clearing skies after Caribbean storms
By Jeffrey Hodgson
TORONTO Dec 10 (Reuters) - Canadian banks say the worst of the financial hits they have taken on their Caribbean operations should be behind them as an improving U.S. economy and lower oil prices help support the region's recovery.
Even if Caribbean economies continue to struggle with weak tourism spending, Canadian bank executives say the work they have done this year to control costs and provide for bad loans should give them a buffer.
"The bulk of the pain is likely behind us on the Caribbean, especially if the U.S. economy does start picking up," Sean McGuckin, chief financial officer at Bank of Nova Scotia , told Reuters.
Canadian banks are among the region's most influential, with roots in some cases going back more than a century. Bank of Nova Scotia opened its first Caribbean branch in 1889.
They have consequently felt the pain of the sharp drop in tourism that followed the financial crisis, squeezing local economies and government finances.
Scotiabank warned last month it would book a C$451 million ($392 million) charge, partly because of soured bets in its Caribbean hospitality portfolio.
In May, Canadian Imperial Bank of Commerce booked C$543 million of charges related to the Caribbean.
But CIBC's chief risk officer said last week that even though the bank's Caribbean portfolio faces challenges, adequate provisions have been made for losses. Continued...