Moody’s downgrades ratings of 6 Canada banks

SEATTLE: Six of Canada’s largest banks had credit ratings downgraded by Moody’s Investors Service on concern that over-indebted consumers and high housing prices have left lenders vulnerable to losses on assets.

Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada and Royal Bank of Canada had their long-term debt and deposit ratings lowered one level, said Moody’s on Wednesday. It also cut its counterparty risk assessment for the firms, excluding Toronto-Dominion.

“Expanding levels of privatesector debt could weaken asset quality in the future,” said David Beattie, a Moody’s senior vicepresident.

A run on deposits at alternative mortgage lender Home Capital Group Inc has sparked concern over a broader slowdown in the nation’s real estate market, at a time when Canadians are taking on higher levels of household debt.

The firm’s struggles have taken a toll on Canada’s biggest financial institutions, which have seen stocks slide on concern about contagion. Bloomberg