US operations may be impacted by regulatory reform
TORONTO, Feb. 24 /CNW/ - While Canada's six largest banks earned strong results and the continued confidence of Canadians last year, as they move forward, new questions will be asked about their ability to handle increased political attention and the ever changing regulatory environment, according to Canadian Banks 2010: Perspectives on the Canadian banking industry, a report released today by PricewaterhouseCoopers LLP (PwC). The annual in-depth review of the Canadian banking industry analyzes the Canadian Banks 2009 performance, the impact this had on consumers, and investigates new challenges for the industry during 2010.
"In 2009, Canada's six largest banks generated top line growth and emerged from an uncertain period with even stronger balance sheets," says George Sheen, national leader of the Financial Services practice at PwC. "This strength reflects their focus on reducing risk, managing costs and growing their top line."
Unlike many other countries, Canadians also stand strongly behind their banks. According to a survey conducted by Leger Marketing on behalf of PwC at the end of last year:
- 80% of Canadians indicate that they have confidence in their banks;
72% feel their banks are well run and 81% believe the strength of
Canadian banks is critical to the health of the overall economy.
- 64% of Canadians believe the banks have responded well to their
personal needs for credit over the last year.
But for the banking industry, uncertainty continues. In 2009, uncertainty was driven by general economic turmoil. But the recent Banking Banana Skins survey (conducted by the Centre for the Study of Financial Innovation in association with PwC) shows a different picture for 2010. The uncertainty around pending regulatory change and potential political interference with the industry globally has left many of our banks feeling paralyzed.
"Our banks are going to remain cautious in the near future," says Diane Kazarian, national leader of the Banking and Capital Markets practice at PwC. "There may be a reluctance to leverage their financial strength into new products and markets until they better understand the impact of regulatory change, and how political intervention might change the global banking landscape."
"Governments globally have gone from reducing one form of risk in the banking sector over the last 18 months, to precipitating a whole new level of regulatory uncertainty." concludes Kazarian.
To hear more about Canadian Banks 2010 from George Sheen and Diane Kazarian, you can listen to a PwC Strategy Talks podcast here: http://www.pwc.com/ca/strategytalks.
For more information and a copy of the report, please visit: www.pwc.com/ca/canadianbanks.
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