Crown corporation says it retains sufficient ability and resources to repel various risks
Late last week, Canada Mortgage and Housing Corporation announced its Board of Directors’ approval of a dividend of $505 million.
The dividend, payable by the end of June, will be to the Crown corporation’s shareholder, the Government of Canada.
Among CMHC’s mandates is ensuring the stability of the national housing market and financial system. The corporation’s mortgage insurance and mortgage funding ventures are managed on a commercial basis.
In the announcement, CMHC assured that this will not impede its ability to deflect various risks.
“The dividend balances returning excess capital to the Government, while retaining sufficient capital to protect against housing market risks. Our dividend framework is informed by our risk appetite, stress testing and scenarios analysis.”
“We intend to continue to return excess capital to the Government while establishing a dividend that allows us to maintain capital in line with our long-term capital needs,” CMHC said. “We intend to continue declaring dividends on a quarterly basis, subject to approval by our Board of Directors.”
Among such risks are slowing economic growth, although the danger of a recession this year is not that serious, Bank of Montreal CEO Darryl White argued last month.
“Are we experiencing some slowdown? Yes, but let’s pay attention to the rate of change... It’s moderating, it’s not a screeching halt,” While told The Canadian Press.
“And when we look at employment rates, we look at inflation, they don’t line us up to driving ourselves towards a recession,” he added, projecting that GDP growth will be at around 1.5% by the end of 2019.
