SOURCE: Paragon Financial Limited

Paragon Financial Limited

January 20, 2012 08:20 ET

Global Financial Crisis Hits Canadian Banks

The Paragon Report Provides Equity Research on The Bank of Nova Scotia & Bank of Montreal

NEW YORK, NY--(Marketwire - Jan 20, 2012) - Shares of Canadian banks took a hit earlier this month after Barclays Capital lowered its rating on the Canadian financial services sector, saying domestic and global headwinds are likely to slow earnings growth in 2012. The Paragon Report examines the outlook for companies in Canada's Banking Sector and provides stock research on The Bank of Nova Scotia (NYSE: BNS) (TSX: BNS) and Bank of Montreal (NYSE: BMO) (TSX: BMO). Access to the full company reports can be found at:

Barclays analyst John Aiken warns that "steam is dissipating from Canada's economic engine" as both domestic and global headwinds will likely weigh on valuations. "We do not believe that the Canadian financials can buck the anticipated easing of domestic growth. Deleveraging of Canadian households is a theme that we believe will weigh on the group for several years to come," argues Aiken.

A recent report from Bloomberg warns of an impending housing bubble in Canada as banks compete to offer mortgages at rates as low as 2.99 percent as their funding costs drop on investor demand for the relative safety of Canadian bonds amid Europe's fiscal crisis.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on Canada's Banking Sector register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Earlier this week The Bank of Canada (BoC) released its quarterly monetary policy report, one of three financial releases predicting a bumpy road to recovery as Europe struggles with its sovereign debt crisis and a recession expected to be "deeper and longer than previously predicted."

The Bank of Canada estimated the loss to economic output this year at 0.6 per cent, or about $10 billion. The bank estimates that Canada's economy would be worth about $10 billion more at the end of the year, with the subsequent beneficial impact on everything from more jobs, higher incomes and corporate profits and better government fiscal positions.

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