Mortgage: Bank and Wednesday Conference

mortgage: Analysts wanted to know what contingency plans the bank has in place in the event of a downturn in house prices, according to CTV. RBC chief risk officer Mark Hughes touted the bank "diligent" process for verifying the incomes of borrowers and noted that the bank doesn't participate in the second mortgage market or offer subprime mortgage loans. Executives at RBC, which reported $2.895 billion of net income in the third quarter, were peppered with questions about the bank residential mortgage portfolio during Wednesday conference call. Hughes also highlighted the fact that 48 per cent of the loan portfolio is insured, up from 46 per cent last year. According to Shanahan, slightly more than half of RBC $531-billion loan book is comprised of Canadian residential real estate loans such as mortgages and home equity lines of credit. "It the biggest pocket of risk in the loan book," he said. "There some concern from time to time about oil and gas loans, but that only a $7-billion portfolio out of $531 billion. The bank purchased additional portfolio insurance this quarter, Hughes added. "Overall, we remain comfortable with our exposure to the Canadian housing market," he said. "Our clients' credit profiles are strong and have remained stable." Edward Jones analyst Jim Shanahan said that while having credit-worthy customers is important, it doesn't insulate the bank from potential losses in the event of a correction or a crash. "If there a substantial decline in home prices in Canada, it unlikely that any Canadian bank wouldn't feel some pain, whether they were selecting high-quality customers or not," he said. (www.immigrantscanada.com). As reported in the news.