Royal Bank of Canada chief executive David McKay painted a picture of a less connected world after the pandemic during his speech at his company’s annual investor meeting. This will result in adjustments to a Canadian economy that depends on free trade and an influx of newcomers.
“Global trade migration should not revert to the old model. The international movement will not press a “resume” button anytime soon. Buyers, diners and tourists can choose to stay away from each other for a period of time, “said McKay in his prepared text on Wednesday. “These are major challenges for a world that has benefited greatly from globalization.”
Canada must not give up globalization, he said, but the country must do more to be self-reliant.
“We need to think about how we can be more self-reliant in the areas that matter most to our competitiveness and prosperity,” said McKay, 56. “This includes creating more resilient Canadian supply chains, using technology to work and connect differently with stakeholders and transforming the way we learn and train, so that our businesses and communities are better equipped for a new paradigm of perturbation. “
The recession is certain
Canada was in the “final stages” of economic expansion when the pandemic broke out, although the collapse in oil prices added to its challenges, said McKay. The impact of this crisis will drag the country into a recession, although the depth and duration of the slowdown “are hard to see at this point,” he said.
The country’s priority must be to help businesses stay solvent and keep employees, he said, adding that help is needed urgently – days and weeks, not months, said McKay. .
“This will allow our economy to start and accelerate recovery once the health crisis is under control,” said McKay, while recognizing the efforts of Ottawa and provincial governments to respond with substantial measures to compensate for the scale. budgetary challenges.
McKay highlighted the Bank of Toronto’s efforts to provide relief to customers during the pandemic. These include:
- Processing more than 250,000 deferred payments for mortgages and other loans;
- Work closely with “thousands” of entrepreneurs and business owners, including increasing operating lines of credit and removing minimum credit card payments;
- Reduce interest on credit cards by 50% for individuals and small businesses receiving minimum payment deferrals;
- Getting heritage advisors to reach “hundreds of thousands” of clients;
- Work closely with financial market clients for financing needs
Royal Bank has also made significant changes to its own operations, with more than 70,000 of its 82,500 employees working at home. This is an increase from 4,000 just a month ago, said McKay.
McKay said he was “confident” about the way forward for Canada’s largest lender, helped by diversified operations, strong capital and liquidity ratios.
“Right now, our bank is well placed to handle the crisis,” he said. “We have the stability and strength of one of the highest rated financial institutions in the world.”