BMO and Scotiabank Face Rising Loan Delinquencies Amid Economic Challenges

The banks set aside more funds for bad loans as higher interest rates impact credit quality.

BMO and Scotiabank report increased loan delinquencies and set aside more money for potentially bad loans amid higher interest rates.
Scotiabank's loan-loss provisions rose to $962 million, exceeding analysts' expectations, due to higher delinquencies in international business and Canadian auto loans.
BMO's shares fell by 3.8% following the announcement, while Scotiabank's shares climbed by 3% despite the challenges.
Both banks note the credit situation as manageable for Canadian clients, with many households still having savings and having trimmed discretionary spending.
Scotiabank plans to focus new spending on North America and evaluate the sale of some Latin American businesses with poor returns.