`It is business as usual` for Canadian bank lending: Royal Bank CEO

[MonteDobson]

`It is business as usual` for Canadian bank lending: Royal Bank CEO

Gary Norris, THE CANADIAN PRESS
January 08, 2009

TORONTO - It`s largely "business as usual" for lending by Canadian banks but there`s no doubt the country is undergoing a credit crunch as other loan sources evaporate, the chief executive of the Royal Bank of Canada (TSX:RY) says.

And as the economy slides deeper into recession, "there`s nothing that is out of the ordinary, given where we are in the cycle, with the exception, of course, of the U.S. real estate business," Gordon Nixon told an investor conference Thursday.

"To a large degree, notwithstanding what is sometimes reported in the press, it is business as usual," Nixon said, commenting on perceptions as Finance Minister Jim Flaherty has said credit availability is a key issue as he prepares his Jan. 27 budget.

http://finance.sympatico.msn.ca/investing/...mentid=16655852

 

[gwasser]

I don`t know about bank lending practices, but I can confirm something on lending money not being available.
For the last 2 years, I have invested in commercial mortgages through an investment company in which I bought shares. This is quite a common form of investing and you can do it with as little a $25,000. The idea was that I wanted to diversify my cash away from the stock market (and the real estate market) into something that gave a better return than a GIC. These mortgages provided me with an interest income of 8.6%.

Not bad, but with the progress of the subprime crisis, the U.S. real estate crash and bankrupties of developers in Canmore, I got nervous. Having lived through one major real estate crash in the early 1980`s was hard enough learning school. I decided to withdraw my investment. It took two month`s but around the beginning of December my money was back and I guess, some developer around Calgary was having part of his loan recalled. I am pretty sure that I was not the only investor who got nervous; there probably were many more. The result is one more lending source that bit the dust or at least was severely reduced in size (by many similar mortgage withdrawals such as mine). So true, we can`t blame the credit crunch on the banks alone, we ourselves want our own money secure as well.

 

[markl]

It`s true private lenders are lending less and at higher rates. The greater the general risk less they lend and the more they charge.

And Godfried who doesn`t love investing

Regards,