2016 – Year in Review



Another year is in the history books. Man, that one went quick.

Here’s a rundown of the headlines that marked a year of flux in our business (what year isn’t a year of flux, but anyway…).

**********

TOP STORIES OF 2016

DoF Announces New Qualification Rules

OSFI Announces Crackdown on Underwriting

FICOM Unveils Comp Disclosure Plans for B.C. Brokers

D+H Monopoly: Officially Over

 

THE YEAR’S TOP DEALS & LENDER MOVES

National Bank Shutters Broker Division

DLC Buys Invis-Mortgage Intelligence

BFG and RMA Join Forces

Vancity Divorces Brokers

True North Becomes a Lender

FCF Capital Buys 60% of DLC

Manulife Enters the Broker Space

DLC Buys Mortgage Architects

 

RATE MOVEMENT

The foundation for Canadian interest rates is the overnight rate. It ended the year where it began, at 0.50%. The Bank of Canada hasn’t changed it for 535 straight days.

The most important benchmark for fixed-rate pricing is the 5-year government bond, and in late 2016 we were reminded of how fast 5-year yields can climb.

Indicator Year End 2016
Chg
BoC Overnight Rate 0.50% No Chg
Prime Rate 2.70% No Chg
Discount Variable Rate1 2.21% -6 bps
5yr Posted Rate 4.64% No Chg
5yr Discounted Fixed Rate1 2.57% -10 bps
5yr Gov’t Bond Yield 1.07% +34 bps
5yr GIC2 1.45% -5 bps
30-day Bankers’ Acceptances 0.80% -6 bps
90-day Bankers’ Acceptances 0.89% +6 bps

 

 

STOCK MOVES

And finally, here’s a look at the performance of Canada’s big banks along with the public companies that make the majority of their revenue in the mortgage business.

Big Banks
Share
Price
2016
%Chg
Annual
Dividend
Bank of Montreal $96.57 +24% $3.44
CIBC $109.56 +20% $4.84
Laurentian Bank $57.73 +20% $2.39
National Bank $54.53 +35% $2.20
Royal Bank of Canada $90.87 +23% $3.28
Scotiabank $74.76 +34% $2.92
TD Canada Trust $66.22 +22% $2.20

 

Mortgage Companies Share
Price
2016
%Chg
Annual
Dividend
Atrium MIC $12.15 +7% $0.86
Eclipse Resi. MIC  $9.80 +1% $0.65
Equitable Group $60.46 +17% $0.84
Equity Financial Holdings $9.90 +23%
Firm Capital MIC $13.76 +9% $0.94
First National $26.93 +20% $1.65
First National MIF $9.03 +7% $0.60
Genworth MI $33.66 +27% $1.70
Home Capital $31.34 +16% $0.98
MCAN Mtg Corp $14.32 +18% $1.17
Street Capital Group $1.88 +40%
Timbercreek Financial $8.72 N/A  $0.68
Trez Capital MIC $7.90 +0.5% $0.70

 


1 Discounted mortgage rates reflect the average advertised rates of Canada’ top superbrokers, as of December 31.

2 RBC’s 5-year non-redeemable GIC with monthly interest is used as a proxy for GIC rates. In reality, some lenders have to pay notably more on their GICs than RBC.

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