Real estate concerns RBC CEO
Bank head says governments must intervene with solutions
Royal Bank’s top executive said he’s “increasingly concerned” about the Toronto and Vancouver housing markets and would welcome government interventions.
RBC chief executive Dave McKay said the rapid increase in housing prices in the two cities is the product of an “unhealthy combination of factors.”
He listed an imbalance in supply and demand for residential properties, low interest rates and speculative activity. McKay said a single solution to these problems is unlikely to be successful.
Instead, McKay said, there need to be multiple solutions to address such a complex problem, and he would welcome interventions from federal, provincial and local governments. McKay made his comments in Toronto during Royal Bank’s annual shareholder meeting.
Also on Thursday, the chief executives at two of Canada’s biggest banks highlighted their efforts to listen to client and employee feedback in the wake of news reports that alleged some employees at financial institutions broke the law in order to meet sales targets.
Dave McKay said the fast jump in Vancouver and Toronto home prices is a product of an ‘unhealthy combination of factors’
Royal Bank’s McKay says his bank surveys its employees and customers regularly and makes changes to its business practices based on the feedback it receives.
Questions about sales practices have dogged the chief executives of Canada’s biggest banks during this year’s shareholder meetings, following CBC reports in recent weeks that cited unnamed employees who allege they faced pressure from management to boost sales or risk losing their jobs.
At Royal Bank’s annual meeting, McKay said that of the 2.4 million accounts the bank opened last year, less than 0.05 per cent of clients escalated a complaint about the way that the account was opened. Meanwhile, CIBC chairperson John Manley said the bank has received no complaints that related to the types of sales practices described in the reports. CIBC chief executive Victor Dodig said his bank is focused on meeting its clients’ needs.
“I always tell everybody — we need to do what is right for our clients,” Dodig said in Ottawa in response to a shareholder’s question during the bank’s annual meeting.
“The earnings will come if we do the right thing for our clients.”