Big Five is the name of the daily language given to the five largest banks that dominate the Canadian banking industry: the Bank of Montreal (BMO), the Bank of Nova Scotia (Scotiabank), the Canadian Imperial Commercial Bank (CIBC) Royal Bank of Canada (RBC), and Toronto-Dominion Bank (TD). The term Big Six is ​​sometimes used to include the next largest Canadian bank, the National Bank of Canada.
All of the five banks are operationally based in Toronto. The five banks are classified as Bank Schedule I which is a domestic bank operating in Canada under a government charter. Bank shares are widely held, with any entity allowed to hold a maximum of twenty percent.
According to the ratings generated by Standard & amp; Poor's, by 2017, the Big Five is one of the 100 largest banks in the world, with Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce on 26, 28, 45 , 52nd and 63th place, respectively.
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The Big Five banks, listed in the order of market capitalization on the Toronto Stock Exchange as of December 1, 2016, with the company's brand name and their current company profile in accordance with their latest annual report, all amounts in billions of Canadian dollars, are:
In modern history, Royal Bank (RBC) has always been the largest with significant margins, although TD Bank has been pursuing RBC in recent years. Until the late 1990s, CIBC was the second largest, followed by Bank of Montreal, Scotiabank, and TD Bank. During the late 1990s onwards, these ratings changed due to some reorganization. Royal Bank acquired the Royal Trust in 1993, while Scotiabank bought the National Trust in 1997. Because Scotiabank did not find merger partners among other banks in the top five, it expanded its international operations and passed Bank of Montreal in size. TD Bank joins Canada Trust, which has long been Canada's biggest belief, so it jumps TD to number two. Although there was no major change to the Bank of Montreal, CIBC's first failed robbery into the US market prompted him to release his assets there, dropping him to number five.
Four of the Big Five Canadian Banks have acquired independent investment banks, whose activities include corporate banking and full service brokers. From 2000 onwards, investment banking subsidiaries, RBC Dominion Securities, BMO Nesbitt Burns, CIBC Wood Gundy and McLeod Young Weir Ltd., all renamed RBC Capital Markets, BMO Capital Markets, CIBC World Markets and Scotia Capital, respectively. Nevertheless, their parent holding company still uses its old name as a brand for their full service broker under wealth management, plus the old name is still a subsidiary brokerage dealer for their investment bank in Canada.
Maps Big Five (banks)
Other large Canadian banks
All the amount of money in C $ billion.
Large non-bank financial institutions
All the amount of money in C $ billion.
Desjardins Group and Alberta Treasury Branches are the major regional financial institutions. Desjardins, a federation of 313 autonomous credit unions (French: resident caisses ), is one of the largest financial institutions in Quebec and also operates in several areas Ontario with a substantial Franco-Ontarian population. Alberta Treasury Branches (operating as ATB Financial) is a Crown corporation owned by the provincial government of Alberta originally established in 1938 after the provincial effort to impose a social credit policy on federally managed banks failed.
Proposed merger
In 1998, the Bank of Montreal proposed a merger with Royal Bank around the same time that CIBC proposed to join the Toronto-Dominion Bank. Banks argue that this merger will allow them to compete globally with other financial institutions. It will leave Canada with only three major national banks. The merger is reviewed by the Canadian Competition Bureau, which states that negative effects (such as higher user fees and local branch closures) of mergers will be far greater than the merits of allowing mergers. In the end, it was then Minister of Finance Paul Martin who rejected the proposed merger. The problem is that it has not been reviewed by successful Finance Ministers; has been cited as the reason that the Canadian economy easily suffered from the 2007 subprime mortgage financial crisis compared to other countries, and the above-mentioned recognition of many Canadian banks on the 2011 Bloomberg list of the twenty strongest banks in the world.
Foreign import potential
The weakness of the Canadian dollar and high US bank stock prices are usually referred to as barriers to buying assets in the south of the border. But the 2007 subprime mortgage crisis reversed this trend. After the crisis, the Canadian dollar continued to rise against the US dollar, reaching parity in early 2008 and trading as high as 30 cents above the USD at the end of 2008. The strength of the Canadian dollar and the relative weakness of US bank prices have led commentators to suggest that five major banks may consider expansion to the United States.
Due to the recent recession, Royal Bank of Canada has now surpassed Morgan Stanley in terms of market appraisal. According to figures compiled by Bloomberg's recent report, today's investors are willing to pay about $ 2.60 for every dollar worth of books in Canadian banks, compared to $ 1.70 in the United States. That ratio is the opposite of where it stood at the end of 1999.
The last time the US financial markets were weak, many Canadian bank CEOs were criticized for not making more integrated purchases. Some believe that these CEOs would rather wait for Ottawa to allow domestic mergers before expansion into the US. The federal government has finally refused to allow the merger and is unlikely to do so now. Analysts also pointed out that Canadian banks have a much stronger balance sheet today than it was 10 or 15 years ago, putting them in a better position to be aggressive.
In October 2007, TD bought Commerce Bancorp, a medium-sized US bank with a strong branch network in the central Atlantic and Florida. In March 2008, the plan they declared was to combine Trade with an existing subsidiary TD Banknorth, calling up a new bank TD Commerce Bank. However, Commerce Bank based in Worcester, Massachusetts challenges a new name. As a result, TD was renamed TD Bank's US banks by the end of 2009. TD is the sixth largest bank by North American branch network, after JPMorgan, Bank of America, Wells Fargo, PNC and US Bank. It is also the largest foreign bank in the United States that holds nearly $ 200 billion (USD) in the form of deposits.
Banking settings
The Canadian Federal Government has sole jurisdiction for banks under the Canadian Constitution, in particular Section 91 (15) of the Constitution Act 1867 known as the British North America Act, 1867 . Meanwhile, credit unions/caisses populaires, securities dealers and mutual funds are largely regulated by the provincial government.
The main federal law for mergers and bank arrangements, or charter banks , is Bank Act (SC 1991, c.46), where Schedule I, II and III This list of laws allows all banks to operate in Canada under three different categories.
See also
- Banking in Canada
- Credit union
- List of banks in Canada
- Big Four, list of the biggest banks in other countries around the world
Note
References
Source of the article : Wikipedia
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