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Investor Presentaiton

Household Debt: Canada vs. U.S. Canadian households' balance sheets compare favourably to US Canadian debt-to-income ratio is now 5.5% below the U.S. peak in 2008 In the last 7 years, increases in Canadian debt-to-income ratio have slowed vs. 2002-10 Calculated on the same terms, Canada's debt-to-income is currently 164% vs. 134% in the U.S. Canadian debt-to-assets ratio remains below U.S. o U.S. households have incentive to pursue higher asset leverage in light of mortgage interest deductibility o Debt is a stock concept, to be financed over one's lifetime. Income is a flow concept measuring one single year's earnings. Debt should be compared to lifetime or permanent income, or assets • Ratio of total household debt-to-GDP remains lower in Canada than U.S. 。 Calculated on a comparable basis, the ratio of household credit market debt is 98.2% in Canada vs. 101.3% in the U.S. Household Credit Market Total Household Liabilities Debt to Disposable Income 30 180 household credit liabilities 169.1 as % of disposable income 160 163.6 25 140 120 100 80 133.8 20 Adjusted Canadian* 15 Official Canadian Official US As % of Total Assets household debt as % of assets US Household Credit Market Debt to GDP 130 % of GDP 120 110 US with unincorporated business debt 102.7 100 68 .*Original Canada 101.3 98.2 Canada* 90 18.0 80 70 10 Canada 16.7 560 75.1 Original US 60 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 10 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Sources: Scotiabank Economics, Federal Reserve Board, Statistics Canada. 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 * Adjusted for US concepts and definitions. Sources: Scotiabank Economics, BEA, Federal Reserve Board, Statistics Canada. Scotiabank® 44
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