Amid US banking turmoil, what's the outlook for Canadian financial institutions?

Portfolio manager explains why Canadian banks remain stable in turbulent times

Amid US banking turmoil, what's the outlook for Canadian financial institutions?

Tiffany Woodfield, portfolio manager at Raymond James, has commented on the recent banking turmoil in the United States and how it might affect Canadian banks with exposure in the region.

In an interview with BNN Bloomberg, Woodfield explained that the Canadian banking sector is different from that in the US as it has five to six major players that are heavily regulated by the government, forming an oligopoly.

That contrasts with the US, which has more banks with only a few major players, Woodfield said.

Potential opportunity for Canadian banks with US exposure

Woodfield noted that currently, most Canadian banks have scant presence in the United States, but they are looking to expand. Last year, TD Bank announced it was pushing ahead with its acquisition of First Horizon Bank, a move slated to give it a major playing field in the country. Woodfield suggested that this move by TD, as well as JP Morgan's recent acquisition of First Republic, could potentially create an opportunity for Canadian banks to see a bump in growth.

Woodfield said some analysts were questioning whether TD would go ahead with the deal due to the recent issues in the banking industry. The move was originally set to close on May 27, but has been delayed. Woodfield said TD may choose to negotiate a lower price or push forward with the same price and look for an extension.

In summary, Woodfield said that while the US banking turmoil may affect Canadian banks with exposure to the region, there could also be potential for increased growth as Canadian banks look to expand their presence in the United States.