08) THE GROWING ECONOMIC GAP: RECORD BANK PROFITS

     Canada's five biggest banks have posted a staggering $7.8 billion of profits in the third quarter of this year. That's an increase of 45 percent in net income over the same three month period of 2011.

     The biggest winner was the Royal Bank, which reported all‑time record profits amounting to $2.24 billion, up from $1.29 billion during the third quarter of 2011.

     Scotiabank was number two, with $2.05 billion in profits for the third quarter. That includes an after‑tax gain of $614 million from the sale of its Bay Street headquarters, Scotia Plaza. Scotiabank announced in late August that it will buy ING Bank of Canada from its Dutch parent company in a $3.13‑billion deal.

     Other third quarter profits included $1.7 billion for TD Bank, $841 million for CIBC, and $970 million for the Bank of Montreal.

     All five banks delivered a surprise boost to their dividends paid to shareholders, after previous predictions that lending would fall during the period.

     Financial analysts say that Canadian consumers have maintained their borrowing levels, which probably reflects the inability of many jobless or low-income working people to survive on their present incomes.

     At least two recent studies found that consumer debt has not dropped, despite warnings from Bank of Canada governor Mark Carney that interest rates will eventually rise, leaving many households unable to meet their loan and mortgage payments. Reports from TransUnion and Equifax Canada show that consumer indebtedness, excluding mortgage debt, is now 3.1 per cent higher than last year, hitting new record highs.

(The above article is from the September 16-30, 2012, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)