Scotiabank financials reveal condo exposure

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By the end of July, Scotiabank held $14 billion in condominium mortgages – half of that in the market economists most fear will suffer a correction.

New financials released Tuesday reveal some $7 billion, or one half of those originations, were in Ontario, a province where analysts believe the condo market correction will be most intensely felt.

While broker channel numbers weren’t part of the release, Scotia mortgage professionals have increasingly been challenged to arrange financing for some condo clients as lenders look to limit their exposure to that end of the market.

Scotia in many ways benefited from the retreat of other broker lenders.

Earlier today, the bank released its Q3 earning showing a net profit of $2.05 billion representing a 57 per cent growth from the previous quarter. Scotia’s revenues increased to $5.51 billion from $4.3 billion.

Scotia attributed its net interest income of $2.6 billion in part to residential mortgages.

“Acquisitions contributed $198 million to this growth,” the report read. “The underlying increase was due mainly to asset growth in residential mortgages, consumer auto and commercial lending in Canada as well as diversified loan growth in international banking.”

Scotia’s total residential mortgage portfolio amounted to $153 billion at the close of the quarter.

And as much as 60 per cent of the total portfolio is insured with a loan-to-value ratio of 57 per cent, according to the report.

Condo stats from the Toronto Real Estate Board pointed to a sales decline of 18 per cent in June compared to the same period last year. It was the single largest drop for the segment which experienced a gain of five per cent in May.

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