Royal Bank of Canada's chief executive, Gordon Nixon, said he is more concerned about rising defaults on card debt than he is about mortgages as unemployment rises.
A card portfolio "would be, in my view, much more immediately impacted as a result of a downturn than you'd see in the mortgage portfolio," Mr. Nixon said Thursday during a conference hosted by his company's RBC Capital Markets in Toronto. "We worry about a lot of portfolios, and residential mortgages is one of them, but it wouldn't be on the top of my list."
Royal Bank, Canada's largest lender, had $7.54 billion of consumer credit card loans and about $103 billion of residential mortgages as of Oct. 31, when its fiscal fourth quarter ended, according to regulatory filings.
In the last fiscal year the Toronto banking company's earnings fell 17% from a year earlier, to $3.84 billion, as a result of writedowns tied to the collapse of the U.S. subprime mortgage market.