Canada's banks are on track to meet tough new global capital guidelines, the country's financial regulator said on Tuesday, although it warned the lenders to be cautious in raising dividends, buying back shares, or making large acquisitions. In a paper, the Office of the Superintendent of Financial Institutions said banks whose Tier 1 common equity ratios are below the 7 percent standard set out under the new rules, should "maintain prudent earnings retention policies and avoid actions that weaken their capital position". The warning could throw some cold water on expectations for acquisitions and future dividend hikes by Canadian banks.
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