The Big Five Banks in Canada
In the Canadian banking industry
there are currently five banks that stand above the rest in terms of assets, deposits and capitalization. These five bank are referred to colloquially as the Big Five, and all of them are headquartered in Toronto, Ontario. Each of the five banks are classified as Schedule 1 domestic banks operating in Canada under government charter. Accumulatively, the Big Five banks account for more than 85 % of the banking industry in Canada. The shares of the banks are widely held throughout the world; however a single party is limited to a maximum of 20% of a single bank's shares. The big five banks are: Royal Bank of Canada
, Toronto-Dominion Bank
, Bank of Montreal
, and CIBC
. The following information outlines some of the statistics and data surrounding the Big Five banks of Canada
Largest to Smallest
At the moment, the largest of the Big Five is the Royal Bank of Canada, with assets that total $655 billion, approximately $400 billion in deposits, nearly 1,200 branches, and over 71,000 employees (making them the largest employer in the Canadian banking industry). Next in line is Toronto-Dominion Bank, with nearly $560 billion in assets, about $390 billion in deposits, more than 1,100 branches, and nearly 70,000 employees. The third largest of the 'Big Five' is the Bank of Nova Scotia, with nearly $500 billion in assets, $350 billion in deposits, a little more than 1,000 branches and more than 68,000 employees. In fourth place is Bank of Montreal with nearly $390 billion in assets, more than $235 billion in deposits, 900 branches, and 36,000+ employees. Finally, the smallest of the 'Big Five' is Canadian Imperial Bank of Commerce with almost $336 billion in assets, $223 billion in deposits, more than 1,000 branches, and nearly 42,000 employees. Of these five banks, the Royal Bank of Canada has consistently remained at the top of the list by a large margin, while the other four have fluctuated in position somewhat during the past 2 decades.
History and Fluctuations of the Big Five
There was once a sixth bank on the list (when it was referred to as the Big Six) – National Bank of Canada – which once had over 650 branches. However this bank was removed from the list after several difficulties in recent years, including the closing of 200 of their branches. Although Royal Bank of Canada has historically been largest bank, the Canadian Imperial Bank of Commerce was the second largest until the late 90's when the ranking hierarchy shifted due to several reorganizations in the banking industry. Bank of Nova Scotia acquired National Trust in 1997, and since no merger partners were found within the big five, the bank was able to surpass the Bank of Montreal in the rankings. Toronto-Dominion Bank then launched to the number two spot after merging with Canada Trust, and acquiring Commerce Bancorp later in the decade.
The Stability of the Big Five
The Big Five have historically exhibited a stunning incessant resilience to global economic crises, maintaining a consistent financial poise despite the recent turbulence being experienced by banking sectors around the world, most notably just across the border in the United States. Although Canadian banks have had similar interest rates to U.S. banks, the primary difference lies in the operating policies. Financial institutions in Canada are subject to the governance of an authority known as The Financial Consumer Agency, which protects consumers from unfair lending activities and oversees other aspects of the banking industry.
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