UPDATE 5-RBC keeps close eye on Vancouver and Toronto housing markets

Wed Aug 24, 2016 3:58pm EDT
 
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* CEO says RBC can react quickly if situations materialise

* CFO says jury out on impact of Vancouver real estate tax

* Earnings per share of C$1.72 edge past expectations (Adds comment from CFO interview)

By Matt Scuffham

TORONTO, Aug 24 (Reuters) - Royal Bank of Canada, Canada's biggest bank, said it was closely monitoring home prices in Vancouver and Toronto after reporting slightly higher-than-expected quarterly earnings on Wednesday.

Canada's banks are facing heightened scrutiny of their mortgage underwriting practices as authorities try to tackle the potential threat of a housing bubble in the two cities, where prices have soared.

RBC Chief Executive Officer Dave McKay said the bank was watching those markets, although it has less exposure to Vancouver than rivals.

"We have prudent underwriting practices in place, with the necessary technology to closely monitor these markets and quickly react if situations materialise," McKay said.

He added that the bank supported the federal government's move to set up a working group to look at the issue.   Continued...