Many firms stuck in `suspended animation': BMO boss
The chief executive of the Bank of Montreal said Wednesday that businesses are in something like a state of “suspended animation,” as the coronavirus pandemic is making firms cautious now, but could provide Canada's fourth-largest lender with an opportunity later.
BMO CEO Darryl White said the coming year or so could look similar to a “pause” the bank's clients in the United States took in 2017, during which they held off on things such as acquisitions or investments while they awaited details of U.S. President Donald Trump's promised corporate tax cut.
There was then a “release” once those plans became clear, White added.
“My own view is, for very different reasons naturally, we're kind of in that suspended animation right now,” the BMO CEO said in
response to an analyst's question during an investor event. “The loan demand, as you all know, as you've seen across the industry, has tapered off. I expect that will continue for some time as we go through the uncertain phase. But when the business owner decides that there is more clarity, there is more stability, they do move quickly.”
A pause by businesses would come as the economic recovery from the effects of COVID-19 has been slowing of late and as a second wave of the virus has materialized in some places, raising the prospect of another round of government restrictions.
And while support programs have been crucial to keeping businesses and workers afloat during the pandemic, those programs are intended to be temporary, and are stretching governments' finances.
The online event at which White's comments came highlighted BMO's commercial banking operations in Canada and the U.S., which provide deposit accounts and loans for businesses, as well as various other products and services.