The National Bank of Canada believes that uncertainty due to potential tariffs is growing, but says it has not yet adjusted its revenue expectations due to the threat.
Banks, like others who have reported so far, are still keeping their forecasts for growth per single share, so they're not in the way of hits.
“We remain wise, but we haven't incorporated any significant impacts on tariffs. We are happy with the guidance we still share,” said Chief Financial Officer Marie Chantal Ginrath in Wednesday's revenue call.
However, the banks are in close contact with their clients, said Michael Denham, vice-president of commercial and private banks.
“A moment like this is challenging, going back to Covid and going back to previous tariffs, we are incredibly close contact with our clients, so we are able to respond when our clients need to respond.”
While the risks are rising, he said it is still not clear what impacts will be and how much impact Canadian companies can increase.
Banks are sticking to the guidance that double-digit growth rates for commercial loans are low as their main customers are not affected by tariffs.
“Based on what we're seeing right now in the pipeline and client discussions, we're going to stand up to it,” Denham said.
“One of the main reasons is that much of our growth has returned to insured commercial real estate. There, despite the second and third order effects of tariffs, the underlying intrinsicity remains positive in terms of more desires, more accommodation needs, and more development needs.”
The bank says exposure to high-risk industries such as automobiles, aluminum and steel is only a small part of its wholesale books.
The bank has yet to incorporate any significant impacts on tariffs in its guidance, but CEO Laurent Ferreira has used analyst calls to drive economic reforms they think are necessary to meet at the moment.
“We must restructure relationships and negotiate economic and trade terms with our biggest partners, as well as eradicating investment in our country,” he said.
Ferreira sought the appointment of a nonpartisan deregulation head and the ability to allow accelerated depreciation of capital investments, reduced capital gains for employers, and tax deferrals when transferring businesses to future generations or selling to employees to maintain the company's Canadian ownership.
