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Canadian banks tighten credit

Published by Steve Coleman on August 22, 2011

While major banks have been tightening their belts, credit unions and other Canadian financial institutions have been a little looser with the purse strings since the world economy went into recession in 2008.

New numbers from Industry Canada say domestic manufacturers have received a bigger helping hand in the last couple of years from credit unions and other financial institutions.

While domestic banks have cut back on the amount of credit they're offering, it was foreign banks that made the largest leap out of the Canadian lending market.

Domestic banks had $828.2 million less invested in Canadian manufacturing in 2010, compared to 2008. Foreign banks had $3.98 billion less invested in Canadian factories by the end of the same period, while other financial lending institutions picked up some of the slack to the tune of $2.427 billion.

Canadian banks had $61.709 billion in authorized manufacturing loans in 2008, while foreign banks had $23.632 billion authorized. The combination of credit unions and finance and insurance companies was $17.241 billion.

In 2010, domestic banks had $60.881 billion in authorized loans, while the foreign bank share fell to $19.656 billion. Other lending companies had $19.668 billion in authorized loans to manufacturers.

In terms of outstanding loans, both domestic and foreign banks had less money waiting to come back in. They also had fewer manufacturing-related customers

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