Quebec, Montreal house markets ‘in balance’: CEO
National Bank chief confident in supply, demand
National Bank of Canada’s chief executive says t he l ender hasn’ t seen “any signs of imbalance” between supply and demand in Quebec’s real estate sector since Vancouver moved to cool down its housing market with measures including a foreign buyers tax.
Louis Vachon, National Bank’s president and chief executive officer, told shareholders at its annual general meeting Friday that the bank has noticed a greater presence of buyers from outside Quebec, and “we have to remain vigilant.”
However, in Quebec and Montreal — where the lender is more heavily weighted — the market remains “in balance.”
“We are not seeing any signs of imbalance currently caused by the Vancouver tax,” he told shareholders in Montreal on Friday. “We’ll see what happens, but I remain confident that the likelihood of an imbalance on Montreal’s real estate market is relatively low.”
His comments come one day after the Ontario government moved to rein in the housing market with 16 new measures, including a 15 per cent tax on foreign buyers.
In the Ontario market, National Bank has moved to reduce risk. For example, it redirected mortgage brokers — those which get mortgages but do not work for the lender — towards a single supplier, and “have reduced certain types of risks, certain types of loans and we’ve repositioned ourselves much more towards insured mortgages in some niches of the market.”
“By and large, we support the actions yesterday announced by the Government of Ontario,” Vachon added.
Vachon also told shareholders that two of the biggest challenges facing the bank were revenue growth and technological changes — a comment that came as the lender announced a strategic partnership with Canadian financial technology firm Nest Wealth.
The Quebec- based lender has entered into multiple agreements with Nest Wealth, including a minority investment of $ 6- million and the use of its investment technology to enhance National Bank’s internal digital platforms.
“With this agreement, National Bank is increasing its digital services to end-clients, while continuing to emphasize the importance and value of financial advising relationships,” Martin Gagnon, National Bank’s executive vice- president of wealth management, said in a statement Friday.
National Bank has also been looking outside of the country to “high growth potential markets,” said Vachon, as the domestic economy slows.
Its latest move is the acquisition of a 22 per cent stake in ONGO, a mobile payments business in Myanmar, a deal it announced on Thursday.
ONGO is the consumer facing brand of Ronoc Asia, a subsidiary of the emerging markets investment business Ronoc. The fintech company offers retailer payments solutions, payroll programs and direct to consumer services.
“We think that it could be deployed in Cambodia as well,” Vachon told shareholders Friday, adding that National Bank already has a 90 per cent stake in Cambodia’s ABA Bank.
“That economy ( Cambodia) is growing three times faster than ours, and only 15 to 20 per cent of the Cambodian population has a bank account. So there is enormous growth potential in that market.”
The lender’s push into Asia comes as some of Canada’s biggest banks are starting to retreat.
Bank of Nova Scotia is in talks with Cathay Financial Holdings Co. to sell its Malaysian operations, Bloomberg reported last month.
In February, the Royal Bank of Canada’s chief executive said t he bank had undertaken a strategic review of its Asian wealth operations following management changes in the region, according to Bloomberg.
(WE) HAVE REDUCED CERTAIN TYPES OF RISKS, CERTAIN TYPES OF LOANS.