“The action from the central bank implies lower economic growth than is currently reflected in the market,” Aiken said. “We do not anticipate a significant uptick in consumer loan demand and believe that incremental margin compression is likely.”
Domestic lending is currently slowing as indebted Canadians pare borrowing on loans and mortgages. Specifically, the year-over-year mortgage growth last year was half that of eight years prior, according to Bank of Canada.
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Max Chen contributed to this article.