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Canadian banks urge removal of internal trade barriers

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Trump's tariffs could dent Canadian growth, lead to job

cuts

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Canadian banks have sought growth opportunities in US

By Nivedita Balu

TORONTO, Feb 28 (Reuters) - Canada's big bank CEOs are

urging the federal government to remove internal trade barriers,

evaluate tax policies and other regulation as the country's top

lenders cautioned that tariff and trade risks are clouding the

economic outlook.

The six big Canadian banks, which control more than 90% of the

banking market and are among the biggest publicly listed

companies in Canada, beat analysts' expectations for

first-quarter profits but set aside large sums to shield against

bad loans in an uncertain economy.

The banks' CEOs delivered similar remarks on earnings calls this

week. U.S. President Donald Trump has vowed to impose 25%

tariffs on most Canadian imports on March 4.

"The bank CEOs have a voice ... (They) are opportunistically

pushing for, principally, a reduction in regulatory burden,"

said Kevin Burkett, portfolio manager at Burkett Asset

Management, which owns shares of Bank of Montreal ( BNKD ),

Royal Bank of Canada ( RY ) and TD Bank.

Trump's proposed tariffs could reduce growth substantially,

lead to job cuts and raise prices of many goods in the U.S. and

Canada. Canada sends around 75% of all exports to its southern

neighbor.

"The current situation is also a clear signal that Canadian

governments and businesses must pull together to remove the

obstacles that hold back national productivity and strengthen

our competitiveness," TD Bank CEO Raymond Chun told analysts.

Chun and other executives said the government must tackle

barriers that hold back trade between the 10 provinces while

accelerating mineral, energy and resource projects.

"This is the chance for Canada to make structural

improvements to the country's economic productivity and

competitiveness," Royal Bank of Canada ( RY ) CEO Dave McKay said.

"This can drive future growth opportunities with significant

benefits to Canadians amidst this uncertainty."

National Bank of Canada ( NTIOF ) CEO Laurent Ferreira urged

Ottawa to appoint a "head of deregulation" to remove

"unproductive red tape" and reduce regulatory burdens for

businesses to preserve Canadian ownership of businesses.

DIVERSIFICATION

Canadian banks, however, have diversified outside of Canada

for growth opportunities, with three of the big six expanding

their retail businesses in the U.S.

Bank of Nova Scotia which expanded in South America,

had trimmed its exposure there and instead invested in U.S.

regional lender KeyCorp ( KEY ). Its strategy is still dependent on

growing trade between the U.S., Canada and Mexico.

Scott Thomson, the CEO of Bank of Nova Scotia ( BNS ), said Canada

should focus on boosting investment, embracing energy policies

that increase export opportunities for oil and gas and reducing

the time it takes to develop other natural resource projects.

"The banking industry will play an important role in

supporting a much more deliberate national economic plan," he

said.

Bank of Montreal ( BNKD ) CEO Darryl White said some clients on both

sides of the border were being more cautious about capital

deployment.