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Royal Bank of Canada beats expectations on record capital markets earnings – Financial Post

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The bank’s net income for the three-month period ended Jan. 31 was approximately $3.85 billion, an increase of 10 per cent from a year earlier

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The chief executive of Canada’s biggest bank said Wednesday that they anticipate weak supply, rock-bottom interest rates and stockpiles of savings to keep driving demand for residential real estate, which comes as policymakers are starting to see froth in the housing markets. 

Canadian housing activity “remains elevated,” according to Dave McKay, Royal Bank of Canada’s president and CEO.

“While rising permit issuance is building up the new construction pipeline, we expect a lack of supply, low interest rates, elevated savings rates, continuing work-from-home arrangements and the potential resumption of immigration to underpin continued demand,” McKay said during a conference call for analysts and investors.

The comments followed Toronto-based RBC reporting first-quarter earnings that were better than expected, helped by both loan growth and a drop in the amount of money it had to set aside for potential loan losses. The base-case economic outlook that the bank uses for calculating expected credit losses also foresees Canadian housing prices to rise by 4.9 per cent over the next 12 months. 

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Yet the same kind of factors that RBC sees driving demand in the housing market are the same ones that policymakers are beginning to eye warily. 

Bank of Canada Governor Tiff Macklem on Tuesday said that they are seeing some signs of “excess exuberance” in the housing market, albeit not to the level that prompted past policy actions such as mortgage stress tests. The governor noted that the economy is still coping with the coronavirus pandemic and said that “we need the growth we can get.” 

Even so, Macklem said that even they were surprised by the strength of the housing market’s rebound, which has been driven by factors such as a COVID-19-related desire for more space, helping to drive up demand and prices for suburban real estate. According to the Canadian Real Estate Association, home sales set another all-time record in January, with the actual national average sale price increasing by 22.8 per cent from a year earlier. 

Macklem told reporters on Tuesday that the central bank looks for signs of “extrapolative expectations,” which would involve people counting on “unsustainable” increases in home prices to continue. 

“If people start to … think that those are going to go on indefinitely, that becomes a concern,” the governor said. “We are acutely aware that in a world of very low interest rates, there is a risk that housing prices could get stretched, households could get stretched, and certainly that’s a risk we want to guard against.” 

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RBC, however, sees some debt-related risk abating, which helped the lender to beat earnings expectations. 

The bank’s net income for the three-month period ended Jan. 31 was approximately $3.85 billion, an increase of 10 per cent from a year earlier. When adjusted for certain items, Canada’s biggest bank said first-quarter earnings per share were $2.69, up 10 per cent year-over-year and better than the $2.28 consensus of analyst estimates.

Profit from RBC’s personal and commercial banking unit rose six per cent from a year ago, to nearly $1.8 billion, as it grew both Canadian deposits and loans during the quarter. An improved outlook for credit quality also allowed RBC to release $97 million in reserve funds, with the bank’s total provisions for credit losses for the quarter $110 million, down 74 per cent from a year earlier.

McKay pointed to the progress being made on vaccines as a reason for its improving outlook. 

“We’re growing in confidence in the trajectory of the vaccination of our population and the mitigation of risk,” he said in response to an analyst’s question. “We’re not there yet, so we’re still waiting to see the execution of this, but we’re getting more confident that the timing is starting to narrow around when this will happen.” 

RBC also said its most recent financial results were boosted by a flurry of stock trading earlier this year and in late 2020, as the lender managed to beat first-quarter earnings expectations.

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The bank’s capital-markets business reported net income of approximately $1.07 billion for the first quarter, up 21 per cent from a year ago.This, the bank said, was mostly because of higher revenue, “largely driven by higher equity trading primarily in the U.S. reflecting increased client activity, partially offset by lower, albeit strong M&A revenue, which was the second highest following the historical high in Q1 2020.”

Market conditions gave RBC’s insurance business a lift as well, with the unit’s net income increasing 11 per cent year-over-year, to $201 million. This was chiefly because of “improved claims experience and higher favourable investment-related experience,” the bank said in a press release.

Also reporting an earnings beat on Wednesday was Montreal-based National Bank of Canada, which said its adjusted EPS for the quarter ended Jan. 31 were $2.15, better than the $1.71 analysts had been anticipating. 

In keeping with what its rivals have been reporting this earnings season, National said that its loan-loss provisions had fallen in the quarter, decreasing nine per cent year-over-year to $81 million.

“While uncertainty remains on the exact path and timing of a full recovery, the economy is adapting to a new reality and creating an environment conducive to revenue growth,” said Louis Vachon, president and CEO of National, during his bank’s conference call on Wednesday. “With more people working from home, coupled with historically low interest rates, we continue to see significant pent-up demand in the housing market.”

• Email: gzochodne@postmedia.com | Twitter:

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

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U.K. advises limiting AstraZeneca in under-30s amid clot worry

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LONDON —
British authorities recommended Wednesday that the AstraZeneca COVID-19 vaccine not be given to adults under 30 where possible because of strengthening evidence that the shot may be linked to rare blood clots.

The recommendation came as regulators both in the United Kingdom and the European Union emphasized that the benefits of receiving the vaccine continue to outweigh the risks for most people — even though the European Medicines Agency said it had found a “possible link” between the shot and the rare clots. British authorities recommended that people under 30 be offered alternatives to AstraZeneca. But the EMA advised no such age restrictions, leaving it up to its member-countries to decide whether to limit its use.

Several countries have already imposed limits on who can receive the vaccine, and any restrictions are closely watched since the vaccine, which is cheaper and easier to store than many others, is critical to global immunization campaigns and is a pillar of the UN-backed program known as COVAX that aims to get vaccines to some of the world’s poorest countries.

“This is a course correction, there’s no question about that,” Jonathan Van-Tam, England’s deputy chief medical officer, said during a press briefing. “But it is, in a sense, in medicine quite normal for physicians to alter their preferences for how patients are treated over time.”

Van-Tam said the effect on Britain’s vaccination timetable — one of the speediest in the world — should be “zero or negligible,” assuming the National Health Service receives expected deliveries of other vaccines, including those produced by Pfizer and Moderna.

EU and U.K. regulators held simultaneous press conferences Wednesday afternoon to announce the results of investigations into reports of blood clots that sparked concern about the rollout of the AstraZeneca vaccine.

The EU agency described the clots as “very rare” side effects. Dr Sabine Straus, chair of EMA’s Safety Committee, said the best data is coming from Germany where there is one report of the rare clots for every 100,000 doses given, although she noted far fewer reports in the U.K. Still, that’s less than the clot risk that healthy women face from birth control pills, noted another expert, Dr. Peter Arlett.

The agency said most of the cases reported have occurred in women under 60 within two weeks of vaccination — but based on the currently available evidence, it was not able to identify specific risk factors. Experts reviewed several dozen cases that came mainly from Europe and the U.K., where around 25 million people have received the AstraZeneca vaccine.

“The reported cases of unusual blood clotting following vaccination with the AstraZeneca vaccine should be listed as possible side effects of the vaccine,” said Emer Cooke, the agency’s executive director. “The risk of mortality from COVID is much greater than the risk of mortality from these side effects.”

Arlett said there is no information suggesting an increased risk from the other major COVID-19 vaccines.

The EMA’s investigation focused on unusual types of blood clots that are occurring along with low blood platelets. One rare clot type appears in multiple blood vessels and the other in veins that drain blood from the brain.

While the benefits of the vaccine still outweigh the risks, that assessment is “more finely balanced” among younger people who are less likely to become seriously ill with COVID-19, the U.K’s Van-Tam said.

“We are not advising a stop to any vaccination for any individual in any age group,” said Wei Shen Lim, who chairs Britain’s Joint Committee on Vaccination and Immunization. “We are advising a preference for one vaccine over another vaccine for a particular age group, really out of the utmost caution rather than because we have any serious safety concerns.”

In March, more than a dozen countries, mostly in Europe, suspended their use of AstraZeneca over the blood clot issue. Most restarted — some with age restrictions — after the EMA said countries should continue using the potentially life-saving vaccine.

Britain, which relies heavily on AstraZeneca, however, continued to use it.

The suspensions were seen as particularly damaging for AstraZeneca because they came after repeated missteps in how the company reported data on the vaccine’s effectiveness and concerns over how well its shot worked in older people. That has led to frequently changing advice in some countries on who can take the vaccine, raising worries that AstraZeneca’s credibility could be permanently damaged, spurring more vaccine hesitancy and prolonging the pandemic.

Dr. Peter English, who formerly chaired the British Medical Association’s Public Health Medicine Committee, said the back-and-forth over the AstraZeneca vaccine globally could have serious consequences.

“We can’t afford not to use this vaccine if we are going to end the pandemic,” he said.

In some countries, authorities have already noted hesitance toward the AstraZeneca shot.

“People come and they are reluctant to take the AstraZeneca vaccine, they ask us if we also use anything else,” said Florentina Nastase, a doctor and co-ordinator at a vaccination centre in Bucharest, Romania. “There were cases in which people (scheduled for the AstraZeneca) didn’t show up, there were cases when people came to the centre and saw that we use only AstraZeneca and refused (to be inoculated).”

Meanwhile, the governor of Italy’s northern Veneto region had said earlier Wednesday that any decision to change the guidance on AstraZeneca would cause major disruptions to immunizations — at a time when Europe is already struggling to ramp them up — and could create more confusion about the shot.

“If they do like Germany, and allow Astra Zeneca only to people over 65, that would be absurd. Before it was only for people under 55. Put yourself in the place of citizens, it is hard to understand anything,” Luca Zaia told reporters.

The latest suspension of AstraZeneca came in Spain’s Castilla y Leon region, where health chief Veronica Casado said Wednesday that “the principle of prudence” drove her to put a temporary hold on the vaccine that she still backed as being both effective and necessary.

French health authorities had said they, too, were awaiting EMA’s conclusions, as were some officials in Asia.

On Wednesday, South Korea said it would temporarily suspend the use of AstraZeneca’s vaccine in people 60 and younger. In that age group, the country is only currently vaccinating health workers and people in long-term care settings.

The Korea Disease Control and Prevention Agency said it would also pause a vaccine rollout to school nurses and teachers that was to begin on Thursday, while awaiting the outcome of the EMA’s review.

But some experts urged perspective. Prof Anthony Harnden, the deputy chair of Britain’s vaccination committee, said that the program has saved at least 6,000 lives in the first three months and will help pave the way back to normal life.

“What is clear it that for the vast majority of people the benefits of the Oxford AZ vaccine far outweigh any extremely small risk,” he said. “And the Oxford AZ vaccine will continue to save many from suffering the devastating effects that can result from a COVID infection.”

Source: – CTV News

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Facebook downplays ‘old’ breach exposing info on 533 million users

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Facebook is downplaying the significance of a data breach that saw the personal information of 533 million of its users accessed online, saying the information is old and the vulnerability that was exploited was closed almost two years ago.

Over the weekend, Business Insider reported that personal information of Facebook users in 106 countries was found on a low-level hacking forum, free of charge. Cybercrime intelligence firm Hudson Rock calculated that almost 3.5 million Canadians were included.

Information included names, phone numbers, locations, birth dates, email addresses and other identifying details. No financial or payment information was accessed, Facebook said.

In a statement on its website Tuesday the social media giant said the information was gathered via a vulnerability the company fixed almost two years ago, and disputed that it was a hack.

Data scraped, not hacked: Facebook

“It is important to understand that malicious actors obtained this data not through hacking our systems but by scraping it from our platform prior to September 2019,” said product management director Mike Clark.

Scraping refers to the act of gathering information that is already out there but somewhat hidden on public databases.

The company said whoever collected and assembled the data did so by abusing the contact importing service, which allows users to find other people in their network on Facebook.

Facebook said whoever did it seems to have uploaded a large set of phone numbers to see which ones matched Facebook users.

David Masson, director of enterprise security at cybersecurity firm Darktrace, says the information has likely been out there and spread widely for a while, before being outed recently.

“It’s been on the Web for quite a while, probably for sale to people,” he said. “But now somebody’s just offered it up for free.”

Building a profile

Greg Wolfond, CEO of data security firm SecureKey, said that in a vacuum, much of the information taken can seem innocuous and harmless, but when taken together can be very dangerous.

“What the hackers do is they try and get little bits of data about you in this case something like your phone number,” he told CBC News in an interview. They can then combine that with other bits of information — an address, a full name — and start building a profile.

What’s most dangerous is once they have gathered enough to attempt to gain access to a cellphone account. With the right combination of information, a telecom company may allow someone walking in to port the account number to a new phone.

 

Cybersecurity expert David Masson with Darktrace says Facebook users shouldn’t assume the company’s size and scope make them better at fending off attacks. (Darktrace)

 

“They take over your phone, and within minutes of taking over your phone, they’re trying to get into your bank account, to get into your Facebook account, your Google account, whatever you use that phone as your recovery for,” he said.

Typically, consumers are urged to fight data theft by doing things like changing passwords frequently, and making the complex. But those things are of little use when companies claim the right to reams of data about their users, and promise to keep it safe.

“Empowering individuals to share their data and putting a responsibility on parties that have the data to keep it secure,
is super important,” he said.

Not Facebook’s first user-info incident

Although the company is downplayed in the incident, it is far from the company’s first misstep with user info.

In 2018, the social media giant disabled a feature that allowed users to search for one another via phone number following revelations that the political firm Cambridge Analytica had accessed information on up to 87 million Facebook users without their knowledge or consent.

In December 2019, a Ukrainian security researcher reported finding a database with the names, phone numbers and unique user IDs of more than 267 million Facebook users — nearly all U.S.-based — on the open internet.

Spark15:32Digital security expert shares tips on how to protect your data while working remotely 

During the COVID-19 pandemic, we are spending more of our time at home online than ever before – and according to Citizen Lab’s John Scott-Railton, this makes us vulnerable to privacy and security threats. 15:32

Facebook says it will “continue aggressively go after malicious actors who misuse our tools,” and touted its dedicated team focused on this work” but  Masson says users shouldn’t make the mistake of assuming that the company’s size and scope somehow make them better equipped to keep user data safe.

“It doesn’t matter how big or sophisticated you are, they can be attacked,” he said.

Like many breaches, this one was only discovered long after the fact, and that’s because the technology company’s use isn’t keeping up with the ones the hackers are using.

“There are better technologies that actually work on what happens once the bad guys get inside your network rather than when they’re banging on the door outside. So people [have] got to realize this will happen again.

Source: – CBC.ca

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