TORONTO, Ontario (CU)_A Bay Street analyst recently downgraded all but one of the Big Six banks of Canada. This was despite higher interest rates which is boosting the bank’s net interest income.
Nigel R. D’Souza from Veritas Investment Research hasn’t shied away from going bearish on banks in the past and he is doing it once again. The investment analyst on Wednesday cut each of Royal Bank of Canada, Canadian Imperial Bank of Commerce, National Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia to sell, citing the eventual drag from higher interest rates. He acknowledged that net interest margins of banks, which is the difference between what they charge on loans and what they pay on deposits, are being boosted by higher interest rates. However, he pointed out that those rate hikes will eventually drag down economic growth, creating a renewed risk for the loan books of banks.
“We expect market sentiment to shift…
