The Royal Bank does not expect a quick economic recovery

La Banque Royale ne s’attend pas à une reprise économique rapide

Photo: Olivier Zuida The Duty
The Bank has processed more than 250,000 reports of payment.

The economic recovery that will follow the pandemic of COVID-19 will probably be slower and more uneven than was first thought, warned on Wednesday, the big boss of the Royal Bank.

According to the chief executive, Dave McKay, the magnitude of the challenge becomes increasingly clear, and governments and institutions will need to plan for the longer term. “We’re going to have to support businesses and consumers a little longer than we expected to be there was just one month, where, you know, when most people spoke of a V-shaped recovery sharp, or at least in the U with a strong recovery. I don’t think we can wait, ” he said.

Speaking during a round table media after the annual general meeting of the shareholders of the Royal, Mr. McKay stated that the economy should restart it by steps to prevent a new wave of contagion, while the costs of companies will also be more cautious. “If everyone shows a little more cautious, keep a little more money, a little less risk on the table, then, de facto, this element alone will slow down the curve of recovery. Therefore, all these factors play a role in my anticipation of a slower recovery. “

Some sectors of the economy could see times especially extended, as the business travel, as companies adapt to the ways of conducting their activities in more remote, he observed. However, ideally, a large part of the economy could work again at the beginning of the next year. “If we can go back to 80%, or 90 % of where we were, you know, at the beginning of 2021, I think that it would be quite good. “

Payment deferrals

The economic crisis comes at a time when Canadians have a level of record debt, but Mr McKay said that the combination of income supplements from the government and reports of payment banks would be able to help a large part of the population to make ends meet. To this day, the Royal Bank alone has treated more than 250 000 payment deferrals, including mortgages, and various lines of credit, he said.

Despite these reports, the Royal Bank is well positioned to overcome the economic downturn and she had no intention of reducing its dividend, said Mr McKay at the annual meeting.

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