TECHNOLOGY @ RBC
Canadian Banking - Commercial and Small Business Portfolio (1)
Active and Expired Deferral Balances (Q4/2020; C$ million)
17,339
1,929
Cumulative and active deferral
balances account for -20% and
2% of total outstanding balances
in the Commercial and Small
Business portfolios, respectively
15,410
2,403
12,778
Cumulative Deferrals to
Date
Active Deferrals
(Q4/2020)
Active Deferrals
Expired Deferrals
Payment Not Yet Due
Returned to Performing
■ Most clients were offered up to 6-month principal deferrals and were required to stay current on interest payments.
■ Balances of $1.9 billion are down from $16.1 billion in Q3/20, an 88% QoQ decrease
■ The majority of remaining active deferrals rolled-off in November, 2020
229
Delinquent
■
35% of the active deferral population operates in a vulnerable sector
Expired Deferrals
■
For clients that have a payment due after the expiration of the deferral period, 98% of balances have returned to performing, with just
1.8% delinquent
-
The delinquency rate of 1.8% is generally in-line with the broader commercial and small business portfolios
Client Outreach
Credit Quality
Q4/2020 Credit
Performance
☐
"
41% of the expired deferral population operates in a vulnerable sector
98% of the total deferral population (by number of clients) has been contacted through our client outreach program.
For clients who took deferrals and have a Business Deposit Account, deposit balances at Q4/2020 are at an average of 14.6x (median
6.3x) their monthly debt service obligations, up from an average of 10.8x (median 3.0x) in Q4/2019
Increasing debt service coverage is due to rising average deposit balances (+66% from pre-COVID-19 levels), and declining utilization
for borrowers who have taken deferrals
■ The vast majority of the overall portfolio is secured
■ For loans outstanding, there were $10.1 billion of gross downgrades (11% of loans outstanding) and $7.4 billion of gross upgrades (8% of
loans outstanding) in the commercial portfolio, with net downgrades mainly concentrated in the Automotive, Consumer Discretionary and
Other Services sectors
■ New formations of GIL were lower by $88 million QoQ, reflecting the impact of COVID-19 related government support and Client Relief
programs
■ GIL of $674 million was relatively unchanged QoQ, as new formations were offset by repayments and write-offs
•
PCL on impaired loans of $26 million is down 62% QoQ, with lower provisions across most sectors
Total ACL of $1.2 billion is 1.4% of loans and acceptances, more than twice the level in Q1/20
30 | RISK REVIEW
(1) Deferral statistics do not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions.
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