The outlook for 2021 continues to be positive, Scotiabank Chief Executive Officer Brian Porter says, with signs of renewing strength both in Canada and Latin America.
At home, the Bank is seeing strong mortgage and commercial loan demand, as well as renewed growth in the auto business, while the international business is seeing a good pipeline of corporate loans amid improving commodity prices, he added.
“We’re optimistic about the year ahead,” Porter said outlining his expectations during the RBC’s Canadian Bank CEO conference, held virtually on Monday. “And the Bank will be back in full earnings power, back to where we were in 2019, towards the latter part of this year.”
Scotiabank’s mortgage business in Canada grew roughly 5.5% last year, and “the early indications in the first two months of this year are stronger than that,” Porter added.
The pattern isn’t concentrated in the metropolitan areas of Toronto, Montreal and Vancouver, but is more broad-based and includes smaller marketsacross the country , he added.
“People are making choices; they are adjusting to the pandemic. And they’re saying… ‘Maybe I have a daughter or son coming home and I need to make an adjustment, and rates are so low, so I’m going to do that’.”
He expects “fairly strong mortgage demand for the next couple of quarters in Canada.” Meanwhile, the commercial loan business domestically is seeing growth of mid-single digits, while the auto business is exhibiting positive quarterly growth.
“There are definite signs that the Canadian economy has adjusted and absorbed the last nine or ten months exceedingly well and is poised for a strong rebound.”
Meanwhile, the Pacific Alliance countries of Mexico, Peru, Chile and Colombia, where Scotiabank has a strong presence, are faring relatively well amid the pandemic.
Porter noted that the rates of COVID-19 infection across the Pacific Alliance per 100,000 inhabitants is 80% lower than in the US, and 50% lower than in Canada, and vaccination in the region is well underway.
As well, the Pacific Alliance countries such as Chile are benefitting from rising commodity prices globally, he told the industry conference on Monday.
Scotiabank has stated that it expects the international business will get back to $500 million of earnings by the fourth-quarter of this year, and Porter says it stands by that target.
“We see a good pipeline of corporate loans and … we know that the retail business will get better sequentially, quarter by quarter, throughout the year."