B Of A Securities analyst Ebrahim H. Poonawala revised the rating on several Canadian Banks amid a declining rates scenario.
The analyst says the rapid decline in interest rates (5yr yield -120bp since Oct high) lowers the probability of tail risk events posed by a higher for longer scenario.
Although the analyst still expects 2024 to be challenging, he projects a reduced likelihood of a materially worse credit outcome relative to expectations.
Also, Poonawala decreased the PCL (credit costs) forecast for FY25/26 for Canadian banks, driving EPS estimates higher.
BofA Economics team calls for Canada's GDP growth to accelerate in H2 24/2025 and Bank of Canada (BoC) to cut rates by 125bp through FY24.
Consequently, the Full story available on Benzinga.com