ZCAN - Canadian Bank Dividends: Tough But Not Insurmountable Challenges
Following a week when European and UK regulators urged their banks to end dividend payments, Daniel and Kurt weigh in on the prospects for Canadian bank dividends and the associated risks.
Canada's banking regulator, rightly sensing a pickup in loan losses and wanting to avoid a sharp tightening in credit conditions, indicated on Friday a willingness to reduce minimum capital requirements even further to keep lending from contracting during the economic downturn. Dividend yields on Canadian bank stocks reflect a grim outlook, standing at levels not seen since the financial crisis (see chart below). The