(Reuters) – According to the Canadian Bankers ‘Association, Canada’s largest banks have received nearly half a million requests from homeowners to suspend mortgage payments as the economic fallout from the COVID-19 pandemic intensifies.
Since banks announced financial relief more than two weeks ago, nearly 500,000 requests to ignore or defer mortgage payments have been processed or are being processed, up from 213,000 on March 26 , according to a press release https://cba.ca / The mortgage deferrals in Canada reach half a million dollars for the association.
Delayed mortgage payments come at a time when Canadian banks are experiencing moderate profit growth due to lower margins, increased loan loss allowances and divisional volatility in the capital markets .
The “Big Six” Lenders – Royal Bank of Canada
Although owners can request up to six months of deferral, it could cost them additional interest.
“The six largest banks in the country have carried over 10% of mortgages in their portfolios,” the statement said.
The money freed up for Canadians from carry-overs to date has been approximately $ 663 million per month, or almost $ 2 billion per quarter, and that number will increase in the coming weeks, said the association.
A large increase in carryovers generally indicates tight short-term liquidity for lenders, but large banks are better positioned to weather such a spike.
To meet the demand for deferrals and loans, Canada’s largest banks can access government liquidity support, including securities purchases, and also tap into capital buffers.
(Report by Nichola Saminather in Toronto and Bharath Manjesh in Bengaluru; edited by Saumyadeb Chakrabarty and Amy Caren Daniel)