See also
- Banking in Canada
- Big Four, a list of the largest banks in other countries across the world
- Credit union
- List of banks and credit unions in Canada
Big Five is the name colloquially given to the five largest banks that dominate the banking industry of Canada: Bank of Montreal (BMO), Scotiabank, Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada (RBC), and Toronto-Dominion Bank (TD).
All of the five Canadian banks maintain their respective headquarters in Toronto's Financial District, primarily along Bay Street. [1] [2] All five banks are classified as Schedule I banks that are domestic banks operating in Canada under government charter. The banks' shares are widely held, with any entity allowed to hold a maximum of twenty percent. [3]
According to a ranking produced by Standard & Poor's, in 2017, the Big Five banks of Canada are among the world's 100 largest banks, with TD Bank, RBC, Scotiabank, BMO, and CIBC at 26th, 28th, 45th, 52nd, and 63rd place, respectively. [4] RBC and TD Bank are also on the Financial Stability Board's list of systemically important banks as of 2020. [5]
The term “Big Six” is sometimes used to include Canada's next largest bank, National Bank of Canada. [6]
The Big Five banks, listed in order of market capitalization on the Toronto Stock Exchange as of year-ended 2023, with their current corporate brand names and corporate profiles according to their latest annual report, all monetary amounts are in billions of Canadian dollars, are:
| Official name | Bank brand(s) | Operational headquarters | Legal incorporation | Assets (C$ bn) | Revenue (C$ bn) | Capitalization (C$ bn) | Branches (Canada only) | Employees (Full-time equivalent) | Reference |
|---|---|---|---|---|---|---|---|---|---|
| Royal Bank of Canada | RBC Royal Bank | Royal Bank Plaza, Toronto [note 1] [7] | Halifax [8] | $2004.99 | $56.13 | $155.12 | 1,247 | 91,398 | [9] |
| Toronto-Dominion Bank | TD Canada Trust | Toronto-Dominion Centre, Toronto [10] | Toronto [10] | $1,957.00 | $51.84 | $138.70 | 1,062 | 103,257 | [11] |
| Bank of Montreal | BMO Bank of Montreal | First Canadian Place, Toronto [12] [note 2] | Montreal [12] | $1,293.20 | $31.20 | $75.50 | 900 | 55,767 | [13] |
| Bank of Nova Scotia | Scotiabank (full-service) Tangerine (direct) | Scotia Plaza, Toronto [14] | Halifax [14] | $1,410.79 | $32.31 | $68.17 | 947 | 89,483 | [15] |
| Canadian Imperial Bank of Commerce | CIBC (full-service) Simplii Financial (direct) | CIBC Square, Toronto [16] | Toronto [17] | $975.71 | $23.32 | $45.54 | 1,001 | 48,074 | [18] |
In modern history, Royal Bank (RBC) has always been the largest by a significant margin, [19] although TD Bank has caught up to RBC in recent years. Up to the late 1990s, CIBC was the second largest, [20] followed by Bank of Montreal, Scotiabank, and TD Bank. [21] During the late 1990s and beyond, this ranking changed due to several reorganizations. Royal Bank acquired Royal Trust in 1993, [22] while Scotiabank purchased National Trust in 1997. As Scotiabank found no merger partners among the other banks in the big five group, it instead expanded its international operations and passed the Bank of Montreal in size. TD Bank merged with Canada Trust, which was for a long time the largest trust in Canada, thus vaulting TD into the number two spot. [22] While there were no major changes to Bank of Montreal, CIBC's first unsuccessful foray into the US market led it to shed its assets there, dropping it to the number five spot. [23]
Four of the Big Five Canadian banks have acquired independent investment banks, whose activities included corporate banking and full service brokerage. From 2000 onwards, these investment banking subsidiaries, RBC Dominion Securities, BMO Nesbitt Burns, CIBC Wood Gundy, and McLeod Young Weir Ltd., were all rebranded to RBC Capital Markets, [24] BMO Capital Markets, [25] CIBC World Markets, and Scotia Capital, respectively.[ citation needed ] Nonetheless, their bank holding company parent still use the old names as a brand for their full service brokerage under wealth management, plus the old name still remains the broker dealer subsidiary for their investment bank in Canada.
All monetary amounts are in billions C$, updated as of year-ended 2021.
| Official names | Operational head office | Assets (C$ bn) | Deposits (C$ bn) | Capitalization (C$ bn) | Branches (Canada only) | Employees (Full-time equivalent) | Reference |
|---|---|---|---|---|---|---|---|
| National Bank of Canada | Complexe Maisonneuve, Montreal | $355.80 | $240.94 | $34.62 | 384 | 26,920 | [26] |
| HSBC Bank Canada | HSBC Canada Building, Vancouver | $119.85 | $73.63 | N/A | 130+ | 5,500+ | [27] |
| Laurentian Bank of Canada | 1360 René-Lévesque, Montreal | $45.08 | $23.00 | ? | 58 | 2,871 | [28] |
| Canadian Western Bank | Canadian Western Bank Place, Edmonton | $37.32 | $29.98 | ? | 40+ | 2,617 | [29] |
| Equitable Bank | Equitable Bank Tower, Toronto | $36.16 | $20.70 | $2.348 | 0 | 1,161 | [30] |
All monetary amounts are in billions C$, updated as of year-ended 2021.
| Official names | Operational head office | Assets (C$ bn) | Branches (Canada only) | Employees (Full-time equivalent) | Reference |
|---|---|---|---|---|---|
| Desjardins Group | Lévis, Quebec, Canada | $422.90 | 204 | 56,165 | [31] |
| ATB Financial | ATB Place, Edmonton | $55.76 | 162 | 5,044 | [32] |
Desjardins Group and ATB Financial are major regional financial institutions. Desjardins, a federation of 313 autonomous credit unions (French : caisses populaires), is one of the largest financial institutions in Quebec and also operates in some regions of Ontario with substantial Franco-Ontarian populations. ATB Financial (formerly Alberta Treasury Branches) is a Crown corporation owned by the Alberta provincial government that was originally established in 1938 after the province's attempt to impose social credit policies on federally-regulated banks failed.
In 1998, the Bank of Montreal proposed a merger with the Royal Bank of Canada around the same time that CIBC proposed to combine with the Toronto-Dominion Bank. [22] The banks argued that these mergers would enable them to compete globally with other financial institutions. [33] This would have left Canada with only three major national banks. The mergers were reviewed by the Competition Bureau of Canada, which declared that negative effects (such as higher user fees and local branch closures) from the mergers would far outweigh the benefits of allowing the mergers. Ultimately, it was then Finance Minister Paul Martin who rejected both proposed mergers. [34] [35] The issue since has not been revisited by succeeding Finance Ministers; it has been cited as a reason that the Canadian economy easily weathered the 2007 subprime mortgage financial crisis compared to other nations, and the aforementioned recognition of numerous Canadian banks on the Bloomberg 2011 list of twenty strongest large banks in the world. [36] [37]
The weakness of the Canadian dollar and high U.S. bank stock prices were commonly cited as obstacles to purchasing assets south of the border. However the 2007 subprime mortgage crisis reversed this trend. In the aftermath of the crisis, the Canadian dollar steadily climbed against the U.S. dollar, achieving parity in early 2008 and trading as high as 30 cents above the USD in late 2008. The strength of the Canadian dollar and the relative weakness of U.S. bank prices have led commentators to suggest that the big five banks could consider an expansion into the United States.
Because of the recent recession, Royal Bank of Canada has now eclipsed Morgan Stanley in terms of market valuation. According to figures compiled by a recent Bloomberg report, investors today are willing to pay about $2.60 for every dollar of book value at a Canadian bank, compared with $1.70 in the United States. That ratio is about the reverse of where it stood in late 1999. [38]
The last time the U.S. financial markets were weak, many Canadian bank CEOs were criticized for not making a more concerted buying effort. Some believed that these CEOs preferred to wait for Ottawa to allow domestic mergers before expanding into the US. The federal government ended up refusing to allow the mergers and is unlikely to do so now. Analysts also pointed out that Canadian banks have much stronger balance sheets today than they did 10 or 15 years ago, putting them in an even better position to be aggressive. [38]
In October 2007, TD purchased Commerce Bancorp, a medium-sized US bank with a strong branch network in the Mid-Atlantic states and Florida. As of March 2008, their stated plan was to merge Commerce with their existing TD Banknorth subsidiary, calling the new bank TD Commerce Bank. [39] However, Commerce Bank based in Worcester, Massachusetts challenged the new name. As a result, TD renamed its US subsidiary TD Bank at end of 2009. [40] TD is the sixth-largest bank by branch network in North America, after JPMorgan, Bank of America, Wells Fargo, PNC, and US Bank. It is also the largest foreign bank in the United States holding almost $200 billion (USD) in deposits.
Canada's federal government has sole jurisdiction for banks according to the Canadian Constitution, specifically Section 91(15) of The Constitution Act 1867 (30 & 31 Victoria, c.3 (UK)), formerly known as the British North America Act 1867. [41] Meanwhile, credit unions/caisses populaires, securities dealers and mutual funds are largely regulated by provincial governments. [42]
The main federal statute for the incorporation and regulation of banks, or chartered banks, is the Bank Act (S.C. 1991, c.46), where Schedules I, II and III of this Act list all banks permitted to operate in Canada under these three distinct categories. [43]
The Toronto Stock Exchange is a stock exchange located in Toronto, Ontario, Canada. It is the 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in the EY Tower in Toronto's Financial District, the TSX is a wholly owned subsidiary of the TMX Group for the trading of senior equities.
The Canadian Imperial Bank of Commerce is a Canadian multinational banking and financial services corporation headquartered at CIBC Square in the Financial District of Toronto, Ontario. The Canadian Imperial Bank of Commerce was formed through the 1961 merger of the Canadian Bank of Commerce and the Imperial Bank of Canada, in the largest merger between chartered banks in Canadian history. It is one of two "Big Five" banks founded in Toronto, the other being the Toronto-Dominion Bank.
The Bank of Montreal is a Canadian multinational investment bank and financial services company.
Toronto-Dominion Bank, doing business as TD Bank Group, is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. The bank was created on February 1, 1955, through the merger of the Bank of Toronto and The Dominion Bank, which were founded in 1855 and 1869, respectively. It is one of two Big Five banks of Canada founded in Toronto, the other being the Canadian Imperial Bank of Commerce.
TD Canada Trust, trading as TD, is a commercial bank and the Canadian subsidiary of the multinational TD Bank Group. It is the second-largest commercial bank in Canada by assets, behind only the Royal Bank of Canada. TD Canada Trust offers a range of financial services and products to more than 10 million Canadian customers through more than 1,100 branches and 2,600 ATMs.
Royal Bank of Canada is a Canadian multinational financial services company and the largest bank in Canada by market capitalization. The bank serves over 20 million clients and has more than 100,000 employees worldwide. Founded in 1864 in Halifax, Nova Scotia, it maintains its corporate headquarters in Toronto and its head office in Montreal. RBC's institution number is 003. In November 2017, RBC was added to the Financial Stability Board's list of global systemically important banks.
Interac is a Canadian interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac serves as the Canadian debit card system and the predominant funds transfer network via its e-Transfer service. There are over 59,000 automated teller machines that can be accessed through the Interac network in Canada, and over 450,000 merchant locations accepting Interac debit payments.
CIBC Capital Markets is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in Canadian and global equity and debt capital markets. The firm provides a variety of financial services including equity and debt capital market products, mergers and acquisitions, global markets, merchant banking, and other investment banking advisory services.
BMO Bank, N.A. is an American national bank that is headquartered in Chicago, Illinois. It is the U.S. subsidiary of the Toronto-based multinational investment bank and financial services company Bank of Montreal, which owns it through the holding company BMO Financial Corporation. In September 2023, it was the 8th largest bank in the United States by total assets.
The economy of Toronto is the largest contributor to the Canadian economy, at 20% of the national GDP, and an important economic hub of the world. Toronto is a commercial, distribution, financial and industrial centre. It is Canada's banking and stock exchange centre and is the country's primary wholesale and distribution point. Ontario's wealth of raw materials and hydroelectric power have made Toronto a primary centre of industry. The metropolitan area of Greater Toronto produces more than half of Canada's manufactured goods. The economy of Toronto has had a GDP growth rate of 2.4 percent annually since 2009, outpacing the national average. Toronto's population was 3.025 million people as of 2022, while the population of the Toronto census metropolitan area was 6.47 million during the same year.
Interac e-Transfer is a Canadian funds transfer service between personal and business accounts in participating Canadian banks and other financial institutions, offered through Interac Corporation.
Banking in Canada is one of Canada's most important industries with several banks being among its largest and most profitable companies.
The Financial District is the central business district of Downtown Toronto, Ontario, Canada. It was originally planned as New Town in 1796 as an extension of the Town of York. It is the main financial district in Toronto and is considered the heart of Canada's finance industry. It is bounded roughly by Queen Street West to the north, Yonge Street to the east, Front Street to the south, and University Avenue to the west, though many office towers in the downtown core have been and are being constructed outside this area, which will extend the general boundaries. Examples of this trend are the Telus Harbour, RBC Centre, and CIBC Square.
TD Securities is a Canadian investment bank and financial services provider that offers advisory and capital market services to corporate, government, and institutional clients worldwide. The firm provides services in corporate and investment banking, capital markets, and global transaction services. It is the investment bank of Toronto-Dominion Bank Group, and has offices in 18 cities worldwide with over 3,000 employees.
Bank of Montreal v Marcotte, 2014 SCC 55 is a ruling of the Supreme Court of Canada. Together with Amex Bank of Canada v. Adams, 2014 SCC 56 and Marcotte v. Fédération des caisses Desjardins du Québec, 2014 SCC 57, it represents a further development in Canadian constitutional jurisprudence on the doctrines of interjurisdictional immunity and paramountcy, together with significant clarifications on the law concerning class actions in the Province of Quebec, which is similar to that in operation in the common law provinces.
A routing number is the term for bank codes in Canada. Routing numbers consist of eight numerical digits with a dash between the fifth and sixth digit for paper financial documents encoded with magnetic ink character recognition and nine numerical digits without dashes for electronic funds transfers. Routing numbers are regulated by Payments Canada, formerly known as the Canadian Payments Association, to allow easy identification of the branch location and financial institution associated with an account.
Canada's five largest banks and 80% of the foreign banks in Canada are headquartered in Toronto, as well as five Canadian pension plans and Canada's top insurers, which are responsible for 90% of the national industry's assets.
Toronto is home to 40 per cent of the nation's business headquarters... many of the corporate global players are headquartered there: three of the world's 25 largest banks and all of Canada's five largest.
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