Standard & Poor’s Ratings Services today said that the recent market turmoil within the Canadian ABCP market for nonbank sponsored conduits will not affect the ratings or outlooks on the Canadian banks.

“We have held discussions with the major Canadian banks on the current status of their liquidity risk management practices and positions, and remain satisfied that liquidity is sound and supportive of their current short-term ratings,” says Standard & Poor’s credit analyst Donald Chu. “As well, given the sector’s solid and consistent earnings profile, minimal credit quality issues, and strong-to-very strong capital adequacy positions, we see no issues that would change our views on the underlying creditworthiness of the banks that we rate,” he adds.

S&P’s analysis also considers its recent review of the liquidity risk management practices and structural balance-sheet liquidity positions of each of the banks.
This review of bank liquidity positions and management practices included the use of the Standard & Poor’s Canadian liquidity model to measure the survival horizon of the banks under a name-specific liquidity crisis. S&P also used a number of other qualitative and quantitative measures where warranted to derive a more complete picture of a bank’s liquidity risk profile. In general, all of the banks within S&P/s review have, and continue to incorporate, industry best practices in their liquidity risk management procedures, given this is such an important and fundamental component in the safe and sound management of a bank.

S&P’s ratings on the Canadian banks are listed below:

  • Bank of Montreal (A+/Stable/A-1);
  • The Bank of Nova Scotia (AA-/Stable/A-1+);
  • Caisse Centrale Desjardins (AA-/Stable/A-1+);
  • Canadian Imperial Bank of Commerce (A+/Stable/A-1);
  • Credit Union Central of British Columbia (A+/Stable/A-1);
  • Home Trust Co. (BBB/Stable/A-2);
  • HSBC Bank Canada (AA/Positive/A-1+);
  • Laurentian Bank of Canada (BBB/Stable/A-2);
  • Manulife Bank of Canada (AA-/Stable/A-1+);
  • National Bank of Canada (A/Stable/A-1);
  • Royal Bank of Canada (AA-/Positive/A-1+); and
  • The Toronto-Dominion Bank (AA-/Stable/A-1+).