Invest in Canada

Canada’s banks climb in rankings as U.S. giants stumble

by investor on 17/03/09 at 11:38 am

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia and Bank of Montreal pushed deeper into the ranks of North America’s 10 biggest banks after U.S. counterparts stumbled or disappeared in the past year.

Royal Bank, Canada’s biggest bank by assets, is now seventh-largest in North America after tripling assets in the past decade, according to data compiled by Bloomberg from company filings. At the end of 2007, Toronto-based Royal Bank was the sole Canadian firm among the top 10. Toronto-Dominion, Scotiabank and Bank of Montreal rank eight, ninth and 10th.

Canadian banks have remained profitable, outperforming their peers, because of tighter government restrictions on lending and capital requirements. The country’s six biggest lenders reported less than $20-billion in debt-related writedowns since the credit crisis began in 2007, about 2% of the US$887.1-billion recorded by banks and brokerages worldwide.

“It’s a combination of the deleveraging that you’re seeing at some of the U.S. banks and, frankly, the relative strength of the Canadian banks,” National Bank Financial analyst Robert Sedran said in a March 13 interview. “They’ve been less disrupted on a relative basis than a lot of their U.S. peers.”

More..