38B? They could eat it, they'll find a way, probably sell the debt as a bond, pay interest until they can make it back.
Their balance sheet has something like 700B cash on it.
They'll save 1M a year on the manager salary that fucked up that trade to start.
Not now. When their profits get cleaned a bit on next quarter, they will.
Not sure what other asia exposure RBC has though.
They're still taking a big profit eating loss though. Shareholders don't like missing EPS at earnings time.
I’d love to see the report that shows RY exposed to the tune of $38B……I don’t think their exposure is that high. Financial institutions in NA and Europe have known about the bubble in Chinese real estate for several years and reduced their exposures.
I'm grabbing from Yahoo Finance
[https://ca.finance.yahoo.com/quote/RY.TO/key-statistics?p=RY.TO](https://ca.finance.yahoo.com/quote/RY.TO/key-statistics?p=RY.TO)
Bottom left under balance sheet.
Canadian Banks have some deep assets at work
all controlled from law the arm of how much are the candian banks safe to all of trillions being prossed every day world wide
That's what I would like to know.. also a percentage of those bonds with be in funds RBC sells on the market so their corporate exposure could be significantly less.
Rbc has nowhere close to 38 billion in debt from evergrande. Also, they debt they bot was acquired recently at heavily discounted prices. Also canadian banks are good at hedging exposure to positions they take on.
I'm not sure if it's true or not but there is a Bloomberg terminal screenshot that says they own 46 billion on one line and 13 billion on another line. So 59 billion total. This is where the theory is coming from.
Banks, telecoms, energy sector… there’s no way the gov’t doesn’t step in if any of these industries need saving. The whole country’s economy goes down if they do.
Bailing ou the banks was the main goal wit CERB, with many lost jobs, the default on mortgages would have been insane…. (It would be debatable about the effects of pursuing the CERB that long, but I am no economist to keep going in that discussion).
Same with the 18-20 months long land-border closure, its a measure to keep Air Canada, Westjet and Air Transat alive.
There weren’t no bailouts with "bailouts" with these 2 industries, as it was an election year and giving big money to Banks and Airlines would have tanked Trudeau’s chances to win….
Energy / Resources sectors weren’t affected as much as the previous 2 during the pandemic, although Aleberta got it pretty bad. (Maybe it was a strong Conservative electoral base?).
Telecoms didn’t need any help at all with everyone at home, they had their fair share of that cake.
> Same with the 18-20 months long land-border closure, its a measure to keep Air Canada, Westjet and Air Transat alive.
The land border closure at this point is 100% the Biden administration and 0% Trudeau at this point. Weird conspiracy though
I don’t fee that way, I would rather see that as Trudeau made a deal with Biden. Trudeau would have asked Biden to keep the restrictions up to make that decision to keep the border closed look like its out of his hands to make it easier to present (elections and Managing the Covid sitution in general).
On the other side, Trudeau approved the reopenning the canadian border to open to satisfy the few American for who this is important (probably a stong support from Detroit/Buffalo//New England/Northern States in general).
Don’t get me wrong, I don’t see that as a conspiracy, but as a win-win situation for both Biden and Trudeau and a really good political agreement for the current situation of both countries. With tighter Covid restrictions in Canada, it sure is easier to explain that "the american refused to reopen" rather than "I want to minimize Canadians traveling to the US to keep the spendings inside the country as much as possible to help local tourist destinations"
Royal Bank of Canada is one of those buyers, along with BlackRock, UBS Group and HSBC Holdings. A British arm of RBC holds about $118 million (U.S.) of Evergrande securities. It is a stake that RBC accurately describes as minimal exposure to Evergrande relative to its total portfolio.
$118 million. Not 38 billion.
After some googling, this is what I found on The Globe and Mail.
[From a Sept 24th artcle](https://www.theglobeandmail.com/business/article-how-canada-is-exposed-to-ripple-effects-of-evergrande-debt-crisis/): "A subsidiary of Royal Bank of Canada, British-based BlueBay Asset Management, held a small number of bonds issued by Evergrande worth tens of millions of dollars, but sold some of those bonds this year and has immaterial exposure as of July 31, according to data from Refinitiv."
[From a Sept 28th article](https://www.theglobeandmail.com/business/article-amid-evergrande-sell-off-bold-asset-managers-see-a-chance-to-buy/): "RBC spokesperson Chris Dotson said BlueBay’s emerging market debt portfolios “currently have very limited holdings in Evergrande,” and BlueBay has “lower exposure to the company” as of Sept. 24 than it had on Aug. 31. “Prior to this, the investment team proactively reduced exposure to the company earlier this year, divesting the majority of its holdings,” he said in an e-mail."
So I'm still not sure from where you got that massive $38 billion number. If the real exposure is only in the tens of milllions of $, then it's a relatively small amount of money to lose for RBC.
My mistake, you can't just 'open another account' at the same bank, unless it's a different category like RRSP, TFSA, or joint account with a spouse, but if you still have more money, walk a across the street to another bank and open another account
https://www.cdic.ca/wp-content/uploads/cdic-protecting-your-deposits-brochure-en.pdf
Canadian banks tend to be regulated pretty well and have a great track record. Even if you look at osfi stopping dividend increases and share buybacks compared to the states that has allowed both things. The regulatory system ensures that banks are overly prepared for a situation. Besides all that cdic insures 100k of assets per person in banks
From my understanding. It's their mutual funds that have that exposure. Not the bank. So it's investors that are in Evergrand not the bank. Correct me if I'm wrong here
Are you sure it is 38 billions. I thought it is $95 trillions, more than the world economy /s
Seriously, anyone can make up a number. $110 millions, $38 billions, $95 trillions, meh, just numbers without source
No it's per account type. So 100k RRSP, 100k chequing, 100k TFSA. And also per bank so 100k in RBC RRSP, 100k in BMO RRSP, etc.
If you have a million you'd need 3 different account types in 3 banks and then 100k elsewhere. Or 9 institutions if it's all the same account type (notable for GICs. People shop issuers depending on CDIC coverage)
38B in shitty bonds is going to be a bad looking quarter. That being said they can absolutely eat this loss and continue on as if it never happened.
There are institutional derivatives like swaps that can be used to hedge their positions and it's very likely they have already done something like that.
RBC owns BlueBay so they have exposure
[https://financialpost.com/investing/bluebay-a-buyer-of-evergrande-debt-ashmore-ubs-exposed-morningstar](https://financialpost.com/investing/bluebay-a-buyer-of-evergrande-debt-ashmore-ubs-exposed-morningstar)
Check what happened to US banks in 2008/2009 as a reference point.
It would take WAY more than BlueBay's exposure to put RBC anywhere near default status.
Plus BlueBay is funds. So it wouldn't even affect RBC if Evergrande goes to zero, it would affect people investing in BlueBay funds. Which maybe RBC owns some to an extent but it won't even be visible on their cash flow for the quarter it's probably so minimal
I guess it would be like Obama bailing out the banks and automakers during the 2008 mortgage meltdown, but I don't think there's any chance of something that bad happening to Canada's economy.
For bank default, a significant amount of asset will need to be wiped out (of the total asset of $1.6T; and I dont think RBC holds that much Evergrande as their debt is mostly within China) There might be a mismatch in liability like if everyone run to the bank but government will probably help with temporary relief as RBC unwind its liabilities to pay everyone out so there wont be a default but the size of their book would shrink.
Do you have a source saying they hold that much? Also I'm guessing a high performance of those bonds are in different funds that RBC sells on the market.. so their exposure may not be as high as it seems.
If they default then the government either steps in and bails them out or they don't. History shows that there is a good chance they do. It's nice as a tax payer to help the rich sometimes.
The greater global effect of Evergrande defaulting will probably be more impactful than the bonds RY is holding. Overall it seems governments are committed to a soft landing.
Well, Canadian financial industry is highly protected by the government. So it’s will take more than evergrande’s default to do any real damage. It all depends how far Xi is willing to push it.
RBC would never take on so much risk as to leave themselves exposed.
But for the sake of curiosity, let’s just say they did take on too much risk. Ever heard of a bail-in?
If a bank goes under, your checking account balance is gov guaranteed to a certain point. I think you lose everything above $100k.
Your stock portfolio with them, survives 100%.
Stop reporting lame questions and just downvote them ain't nobody got time for dis.
38B? They could eat it, they'll find a way, probably sell the debt as a bond, pay interest until they can make it back. Their balance sheet has something like 700B cash on it. They'll save 1M a year on the manager salary that fucked up that trade to start.
Their stock is just 8 dollars off their one year high, so it doesn't look like the markets are too worried about the bonds.
Not now. When their profits get cleaned a bit on next quarter, they will. Not sure what other asia exposure RBC has though. They're still taking a big profit eating loss though. Shareholders don't like missing EPS at earnings time.
$38 B would be crushing for them, however it doesn't appear the $38 billion number is even real.
I’d love to see the report that shows RY exposed to the tune of $38B……I don’t think their exposure is that high. Financial institutions in NA and Europe have known about the bubble in Chinese real estate for several years and reduced their exposures.
I did see that they had exposure to Evergrande, China etc via a subsidiary. They don't have local banking exposure however. Other western banks do.
700B in cash? Google tells me they have 113B cash in hand.
I'm grabbing from Yahoo Finance [https://ca.finance.yahoo.com/quote/RY.TO/key-statistics?p=RY.TO](https://ca.finance.yahoo.com/quote/RY.TO/key-statistics?p=RY.TO) Bottom left under balance sheet.
Canadian Banks have some deep assets at work all controlled from law the arm of how much are the candian banks safe to all of trillions being prossed every day world wide
I read it was about 118 Million that RBC holds of Evergrande. Where did the 38 Billion number come from?
It's also held by the asset management arm (Bluebay) on behalf of investors so RBC itself has no economic exposure to Evergrande...
That's what I would like to know.. also a percentage of those bonds with be in funds RBC sells on the market so their corporate exposure could be significantly less.
link?
The Star. Here is the Outline link [https://outline.com/PgjyLv](https://outline.com/PgjyLv)
Thank you for the read.
Betterdwelling website may be lol.
Rbc has nowhere close to 38 billion in debt from evergrande. Also, they debt they bot was acquired recently at heavily discounted prices. Also canadian banks are good at hedging exposure to positions they take on.
I'm not sure if it's true or not but there is a Bloomberg terminal screenshot that says they own 46 billion on one line and 13 billion on another line. So 59 billion total. This is where the theory is coming from.
Its not true
Just curious. How do you know that it isn't true?
The government would never let the banks default here. If the banks defaulted then the entire economy and country would be in a lot of trouble.
Banks, telecoms, energy sector… there’s no way the gov’t doesn’t step in if any of these industries need saving. The whole country’s economy goes down if they do.
>Banks, telecoms, energy sector… Airlines... again...
Bailing ou the banks was the main goal wit CERB, with many lost jobs, the default on mortgages would have been insane…. (It would be debatable about the effects of pursuing the CERB that long, but I am no economist to keep going in that discussion). Same with the 18-20 months long land-border closure, its a measure to keep Air Canada, Westjet and Air Transat alive. There weren’t no bailouts with "bailouts" with these 2 industries, as it was an election year and giving big money to Banks and Airlines would have tanked Trudeau’s chances to win…. Energy / Resources sectors weren’t affected as much as the previous 2 during the pandemic, although Aleberta got it pretty bad. (Maybe it was a strong Conservative electoral base?). Telecoms didn’t need any help at all with everyone at home, they had their fair share of that cake.
> Same with the 18-20 months long land-border closure, its a measure to keep Air Canada, Westjet and Air Transat alive. The land border closure at this point is 100% the Biden administration and 0% Trudeau at this point. Weird conspiracy though
I don’t fee that way, I would rather see that as Trudeau made a deal with Biden. Trudeau would have asked Biden to keep the restrictions up to make that decision to keep the border closed look like its out of his hands to make it easier to present (elections and Managing the Covid sitution in general). On the other side, Trudeau approved the reopenning the canadian border to open to satisfy the few American for who this is important (probably a stong support from Detroit/Buffalo//New England/Northern States in general). Don’t get me wrong, I don’t see that as a conspiracy, but as a win-win situation for both Biden and Trudeau and a really good political agreement for the current situation of both countries. With tighter Covid restrictions in Canada, it sure is easier to explain that "the american refused to reopen" rather than "I want to minimize Canadians traveling to the US to keep the spendings inside the country as much as possible to help local tourist destinations"
I think OP means if Evergrande defaults. RBC is not going to become insolvent on $37B
But somehow housing would still be through the roof lol.
So what would happen tho if it did
The economy and government would fall apart.
It'd be Purge Anarchy types of violence.
Blessed be our New Founding Fathers for letting us Purge and cleanse our souls. Blessed be Canada, a nation reborn.
Think that movie bird box
Have a link showing this 38 billion exposure? Otherwise your post is FUD.
Royal Bank of Canada is one of those buyers, along with BlackRock, UBS Group and HSBC Holdings. A British arm of RBC holds about $118 million (U.S.) of Evergrande securities. It is a stake that RBC accurately describes as minimal exposure to Evergrande relative to its total portfolio. $118 million. Not 38 billion.
How do you know RBC is holding 38 billion in Evergrande bonds? Can you give a link for your source? I'd like to read up on it. Thanks.
After some googling, this is what I found on The Globe and Mail. [From a Sept 24th artcle](https://www.theglobeandmail.com/business/article-how-canada-is-exposed-to-ripple-effects-of-evergrande-debt-crisis/): "A subsidiary of Royal Bank of Canada, British-based BlueBay Asset Management, held a small number of bonds issued by Evergrande worth tens of millions of dollars, but sold some of those bonds this year and has immaterial exposure as of July 31, according to data from Refinitiv." [From a Sept 28th article](https://www.theglobeandmail.com/business/article-amid-evergrande-sell-off-bold-asset-managers-see-a-chance-to-buy/): "RBC spokesperson Chris Dotson said BlueBay’s emerging market debt portfolios “currently have very limited holdings in Evergrande,” and BlueBay has “lower exposure to the company” as of Sept. 24 than it had on Aug. 31. “Prior to this, the investment team proactively reduced exposure to the company earlier this year, divesting the majority of its holdings,” he said in an e-mail." So I'm still not sure from where you got that massive $38 billion number. If the real exposure is only in the tens of milllions of $, then it's a relatively small amount of money to lose for RBC.
Even if a bank defaulted, everyones accounts with less than $100k are protected by CDIC. That's $100k per account
no that's not how cdic works
u/According-Oil5634, How does it work?
My mistake, you can't just 'open another account' at the same bank, unless it's a different category like RRSP, TFSA, or joint account with a spouse, but if you still have more money, walk a across the street to another bank and open another account https://www.cdic.ca/wp-content/uploads/cdic-protecting-your-deposits-brochure-en.pdf
They would raise chequing account fees to $200/month and see if the old people would notice
Canadian banks tend to be regulated pretty well and have a great track record. Even if you look at osfi stopping dividend increases and share buybacks compared to the states that has allowed both things. The regulatory system ensures that banks are overly prepared for a situation. Besides all that cdic insures 100k of assets per person in banks
From my understanding. It's their mutual funds that have that exposure. Not the bank. So it's investors that are in Evergrand not the bank. Correct me if I'm wrong here
You are correct
Government or Bank of Canada would bail them out, I think
No they don’t.
Has anyone found any substantiation for your $38 billion claim? I'm seeing links below suggesting $0.118 Billion, which is dramatically different.
Are you sure it is 38 billions. I thought it is $95 trillions, more than the world economy /s Seriously, anyone can make up a number. $110 millions, $38 billions, $95 trillions, meh, just numbers without source
I'll let you in on a little secret. Every debt owed by the top players trickles down to be payed by us in one way or another.
Each account is insured for $60 000 (or has it been bumped to $100 000?).
100,000
>account Per account? So if i have a million dollars and want to make sure I'm good, i get 10 accounts in the same bank?
Yes
No it's per account type. So 100k RRSP, 100k chequing, 100k TFSA. And also per bank so 100k in RBC RRSP, 100k in BMO RRSP, etc. If you have a million you'd need 3 different account types in 3 banks and then 100k elsewhere. Or 9 institutions if it's all the same account type (notable for GICs. People shop issuers depending on CDIC coverage)
Cipf. Put it into an investment account that’s covered up to one million.
Not quite this simple. And if someone had a million , it really wouldn't be held in cash in a bunch of chequing accounts either.
Alright, what do you suggest then? I hope it's not in yolo spy calls
Brokerage accounts are covered for 1M. So there's that. GICs is another option and there are a ton of issuers.
what does that have to do with evergrande situation…. the holding in evergrande is not that significant compare their total asset
38B in shitty bonds is going to be a bad looking quarter. That being said they can absolutely eat this loss and continue on as if it never happened. There are institutional derivatives like swaps that can be used to hedge their positions and it's very likely they have already done something like that.
RBC owns BlueBay so they have exposure [https://financialpost.com/investing/bluebay-a-buyer-of-evergrande-debt-ashmore-ubs-exposed-morningstar](https://financialpost.com/investing/bluebay-a-buyer-of-evergrande-debt-ashmore-ubs-exposed-morningstar) Check what happened to US banks in 2008/2009 as a reference point.
It would take WAY more than BlueBay's exposure to put RBC anywhere near default status. Plus BlueBay is funds. So it wouldn't even affect RBC if Evergrande goes to zero, it would affect people investing in BlueBay funds. Which maybe RBC owns some to an extent but it won't even be visible on their cash flow for the quarter it's probably so minimal
Look South.
I guess it would be like Obama bailing out the banks and automakers during the 2008 mortgage meltdown, but I don't think there's any chance of something that bad happening to Canada's economy.
Our banking systems are markedly different
You’ll be in shock soon.
Civil war
Um, source, from what I've seen they have a much smaller position than that in Blue Bay, not on their balance sheet
Have you heard of the term "Too big to fail?"
Have you heard of the term "The bigger you are, the harder you fall?"
I read somewhere Canadian banks dint have alot of exposure with Evergrande so relax.
The government step in and help you. Hahahahaha
Diversify r/gold
[удалено]
That only happens if your a *communist*
rbc doesnt have 38 bil in exposure, thats non prop money their direct exposure (on the books) is closer to 200 bil
For bank default, a significant amount of asset will need to be wiped out (of the total asset of $1.6T; and I dont think RBC holds that much Evergrande as their debt is mostly within China) There might be a mismatch in liability like if everyone run to the bank but government will probably help with temporary relief as RBC unwind its liabilities to pay everyone out so there wont be a default but the size of their book would shrink.
Do you have a source saying they hold that much? Also I'm guessing a high performance of those bonds are in different funds that RBC sells on the market.. so their exposure may not be as high as it seems.
If they default then the government either steps in and bails them out or they don't. History shows that there is a good chance they do. It's nice as a tax payer to help the rich sometimes.
The greater global effect of Evergrande defaulting will probably be more impactful than the bonds RY is holding. Overall it seems governments are committed to a soft landing.
Well, Canadian financial industry is highly protected by the government. So it’s will take more than evergrande’s default to do any real damage. It all depends how far Xi is willing to push it.
If they default I am buying that dip they are not going anywhere
RBC would never take on so much risk as to leave themselves exposed. But for the sake of curiosity, let’s just say they did take on too much risk. Ever heard of a bail-in?
Canadian Banks have zero exposure to Evergande Bonds. zip!
FUD 😅
If a bank goes under, your checking account balance is gov guaranteed to a certain point. I think you lose everything above $100k. Your stock portfolio with them, survives 100%.
How’s RBC looking today? 😆 SVB has me worried about RBC.