United States, Chief Lending Officer, Bloomberg discussed on Bloomberg Markets
The Valerie and is at one eleven ten the euro dollar sixteen o seven the British pound two dollars. Thirty twenty pot. Stocks continue to move higher after Aurora cannabis reaches a deal to acquire South America focused. I make that ICC labs Inc. That's a Bloomberg business flash. I'm Greg Jarrett. You're listening to Bloomberg markets would Pimm FOX and Lisa Abramowicz on Bloomberg radio at a time. When the US economy is booming are US companies seeking to borrow more and our banks willing to lend them, let's find out from Bill. Thank chief lending officer at TD Bank Bill. Thank you so much for being with us. I was just looking at some of the data the commercial and industrial loan data that the Federal Reserve keeps and one conundrum. This entire credit cycle is why hasn't there been stronger demand for some of these commercial industrial loans by companies, then there's been and why hasn't this total outstanding gone up more. Good morning. Thank you for the opportunity to be here. And you raise a great question. That bar customers are asking us. We're asking ourselves, and there's a number of factors as you look at two thousand eighteen and I would start out taking going back to try to bring clarity to what's happening in the marketplace as we came with the tax cuts earlier in the year. There was an expectation that there would be an influx of mergers and acquisitions and that clearly hasn't happened at this point and part of that was that they're following was restrained. The tax code came into place at freed up cash flow with the reduction in corporate tax rates. Some of that money has been re-employed with infrastructure improvement, and in reimbursement companies largely in technology to be more efficient, and in some cases, cybersecurity to safeguard intellectual property. Your trade secrets things of that nature. So the part of the year was really a wait and see. Stay. Cashflows began to improve. Now, we've got the impact to kill us. And when I say impact at two levels dot com. What's actually happened and the threat? What will happen, and thus far the actual tariffs that have been enacted have been relatively small in terms of the total academy. And it's about a hundred and seven billion dollars. By our calculation of our economy is to what's actually been enacted. The impact on GDP has been very very small of those two tenths of one percent over the next forty eight quarters, but the bigger impact of that is what will it mean going forward more, and that's really forestall in the last several months. It's really forestall the business outspoken, the uncertainty. That's what it's going to mean translated into the banking industry. We talked to lots of costumers are taking a wait and see attitude. There's optimism but short term concern or coffin as to what the market will mean for them. So picture, there's not a clarity businessperson. A CFO would want to be able to go in and say I'm going to undertake that merger. I'm calling to make that acquisition to jump. Start the business further until they get more clarity. What is going to mean? And then you probably seen you follow in your show. There's the overhang of gradual increases. Live. Interest rate philosophy which has been very measured today. But when you boil all the factors together. Some clouds over the business environment. So I have to wonder as chief lending officer and head of credit management at TD Bank in the US division of commercial banking. What's your bigger concern right now, competing with other banks to get clients to actually lend to them or managing risks at companies that are entering a phase of of borrowing as we head toward the leader Cy later side of this credit cycle. I directly is I can't Lisa. It is competition. We are deep in this economic cycle. Our loan portfolio, like many of our competitors is in a great place. Dr customers are doing well. But there's tremendous competition among banks and non thanks private equity firms merged as very formidable competitors to our market, and it's a combination of them also competition for solid credit at this point is. Very very strong. That's the biggest competition we have in the biggest concern at the moment who is your ideal customer in terms of a bar corporate borrower. Well, I say ideal customer, we're looking for a company with sustainable earnings sustainable, EBITDA company company. Well, we we serve companies from small businesses from twenty five thousand in revenue up to major national companies. So we spend what would be considered small business business banking middle market corporate as well as real estate and the other specialty groups including healthcare franchise lending. So we have diversified commercial lending portfolio. We cover all markets from Maine to Florida in twenty seconds. Is there any industry that right now you're starting to see cracks and that you're trying to avoid? Not specifically to any one industry or we've seen characteristics across industries companies that have been dependent upon exports. Not only because of the Paris the strength of the dollar continues that has really taken some of the ability to compete and compete effectively with the export market. Given us a strength of the dollar. So again, not specific to any one industry, but more characteristic cost industries. For the dollar the uncertainty about the pair of the cost of weakness in the export market. And and to a degree the import market where they're heavily dependent upon things that we're gonna have to leave it there. Thank you so much Bill. Thank chief lending officer and head of credit management for TD Bank in the US commercial banking division right now. Let's head to our ninety one studios in Washington DC with Nancy Lyons, Nancy. Thanks, Lisa while east coast is bracing for a direct hit from hurricane. Florence Bloomberg meteorologist rob Caroline is tracking. The storm and says it is likely to hit somewhere in the Carolinas. It's probably going to become a category four hurricane. That means. It's going to be up over one hundred and forty miles an hour likely later this week. Now, the question is exactly where will it strike the Carolina coast pick the best chance for landfall is somewhere south of keep Harris to the South Carolina North Carolina border somewhere Friday morning, forecaster saying other storm hurricane Isaac has strengthening much farther out at sea that one should accelerate over the next thirty six hours, but poses no threat to land at this point. CVS is reshaping its board as it pursues an independent investigation into les Moonves says it's ousted board chair with additional allegations of sexual misconduct continuing to surface five board. Members are now leaving loon vest stepped down late last night following a story posted by the New Yorker that included a second round of ugly sexual misconduct accusations against the powerful TV executives shares of CVS now trading down. Three percent summit will be held this week between Russian President Vladimir Putin in Chinese president Xi Jinping. Neither side is said what they'll discuss, but Trump's policies on trade and North Korea are certainly topics of interest to both Russia and China US sanctions on Russia have played a role in driving Russia and China closer together European Union chief Brexit negotiator. Michel Barnier says I deal with the UK is realistic and possible within eight weeks. Global news twenty four hours a day on air and it tick tock on Twitter powered by more than twenty seven hundred journalists and analysts in more than one hundred twenty countries. Business. Data is growing time is running out in just over twenty years. It is estimated that.