[codfather]

I worked for one of the major banks during the last recession in 2008 and 2009. The BoC was dropping rates by half to a quarter point almost every time they met and the big four were following along, keeping their prime rate in step, despite plunging profits at the time (largely due to their investments in the US sub-prime mess). At one point the BoC dropped prime another quarter percent and TD was the first to announce they would NOT be following this time. It was big news then, especially given that TD had just reported profits were 98% for the same period the year prior (compared to the other three which had all reported considerably lower profits but still dropped their prime rates, though only by 0.15% at first then the other 0.1% after public and BoC outrage). TD eventually did capitulate and dropped their rate, but it stuck with me that TD just seemed so much greedier than the rest, which is saying something.

I have the same sentiment though, the BoC didn't drop rates to increase bank profits. Looking at the last release from Dec. 2014, TD reported a 3% increase in profits from the same period last year ($1.81 billion to $1.86 billion), though apparently that was not up to analysts predictions. I have a feeling the banks will follow along but they're all going to try to get as much as they can.