Royal Bank of Canada expects to eventually reap more than C$300 million ($245 million) in added revenue following the latest central bank rate hike, Chief Executive Officer David McKay said. “A 25 basis point increase in rates should benefit our retail franchise in the first year roughly by C$100 million, but increase to upwards of C$300 million by year five,” McKay said Wednesday at the Scotiabank Financials Summit in Toronto. “For us, C$300 million for 25 basis points is quite meaningful.”
Bank of Nova Scotia CEO Brian Porter, who spoke at the conference before the move was announced, said rate hikes totaling 50 basis points will increase net interest margins for the firm’s domestic lending operations by 2 to 3 basis points in 2018.
Canadian Imperial Bank of Commerce CEO Victor Dodig, who also spoke, said the rate increase on an annualized basis will translate into C$157 million in after-tax profit.
Toronto-Dominion Bank CEO Bharat Masrani said rising rates generally are “a positive phenomena for the bank" -- both domestically and in the U.S. -- and should help boost net interest margins for Canadian lending.