Canadian Banks Face Earnings Hit from Office Loans; Retail Sales Rebound in December

Significant losses on commercial real estate loans pose a risk to Canadian banks' earnings, while retail sales see a boost after a November slowdown.

Canadian banks' earnings are expected to take a hit due to the risk of significant losses on commercial real estate loans, according to the head of Canada's financial-system regulator.
Office buildings are under particular stress as property valuations and revenue have slumped amid occupancy levels that remain well below pre-pandemic levels.
Canadian consumers went on a holiday shopping spree at the end of last year, after reining in their spending just a month earlier.
Sales declined in four of the nine retail subsectors in November, while motor vehicle and parts dealers saw the largest increase.
Sales rose sharply in December, but the pullback in November still highlights some spending weakness for consumers, who are facing higher interest rates and many of whom are due to renew their mortgages this year.