While high interest rates have boosted the banks' lending margins, residential mortgages, auto loans and commercial real estate loans have slowed as consumers and businesses pulled back.
With interest rates forecast to remain high, renewal of the mortgages will squeeze household budgets.
Banks are also rethinking lending to industries sensitive to high interest rates, from condo development to office space.
"We want to make sure we have some kind of confidence when a project is going to go ahead," said Victoria Girardo, Canadian Western Bank's (CWB.TO) VP in real estate lending.
"That is creating liquidity issues across the real estate developer space.
Persons:
Carlos Osorio, Ebrahim Poonawala, Mike Rizvanovic, Rizvanovic, Banks, Victoria Girardo, Nigel D'Souza, Nivedita Balu, Mark Porter
Organizations:
Bank of Montreal, REUTERS, Rights TORONTO, U.S, National Bank, Bank, Veritas Investment Research, Thomson
Locations:
Toronto , Ontario, Canada, Toronto