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Today’s gloom comes to us courtesy of Moody’s:

Canada’s mountain of consumer debt is triggering multiple alarms about the threat to the country’s banks.

Moody’s Investors Service joined the Bank for International Settlements and S&P Global Ratings which have all warned in the last month that Canada’s banking system, dominated by five giants, is facing a growing threat of souring consumer loans amid rising interest rates. The country’s ratio of household debt to disposable income reached a record 171 percent in the third quarter of last year.

The proportion of uninsured mortgages has increased to 60 percent from 50 percent five years ago, including home equity lines of credit, amid government efforts to reduce taxpayer exposure, according to the report from Moody’s on Tuesday. Canada Mortgage and Housing Corp., a government agency, insurers the bulk of mortgages in Canada.

Almost half of outstanding mortgages, many of them on fixed-rate terms, will have an interest-rate reset within the year, increasing the strain on households’ debt-servicing capacity, Moody’s said.

This looks like bad news for Aimia:

PC Optimum points will replace Aeroplan miles as the loyalty program of choice at Esso stations across the country effective June 1, as Imperial Oil Ltd. shifts its relationship to Loblaw Companies Ltd.

Aimia Inc.-operated Aeroplan notified members of the change to its 14-year partnership in an email on Tuesday.

It noted that up to 1.5 miles for every dollar spent will continue to be earned when using Aeroplan-affiliated credit cards for purchases at any retailer, including Esso.

This entry was posted on Tuesday, March 13th, 2018 at 9:21 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.