Over the past decade, the largest Canadian bank stocks have demonstrated resilience during economic challenges and displayed high growth rates during post-recession periods. Their appeal extends to income investors due to higher dividend payments, and recent low valuations have contributed to attractive total return profiles.
The prominent “Big 5” Canadian banks include Canadian Imperial Bank of Commerce (CM), Royal Bank of Canada (RY), The Bank of Nova Scotia (BNS), Bank of Montreal (BMO), and Toronto-Dominion Bank (TD). While these banks have historically been solid long-term investments, the current trend of rising interest rates has compelled them to allocate more funds for potential defaults, known as Provisions for Credit Losses (PCLs). Although PCLs contribute to the stability of Canadian banks, they also impact their bottom line.
Despite these challenges, bank stocks present a lucrative opportunity for both individual investors and investment firms seeking stable returns and long-term growth. The consistently resilient and stable nature of Canada’s banking sector makes it an appealing option for savvy investors. Selecting the best Canadian bank stocks, considering factors such as financial performance, growth potential, and market positioning, is vital for achieving financial objectives. In this article, we explore some Canadian bank stocks, identifying top contenders deserving of attention from investors and funds alike.
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|---|---|---|---|---|---|
| Advice | InvestCAN | InvestRESP | InvestUSA | RetireCAN | RetireMGN |
| $500.00 CAD $400.00 USD | $99.99 CAD | $79.99 USD | $99.99 CAD | $17.99 CAD $12.99 USD |
What is the Best Bank Stock in Canada?
- LB.TO: Laurentian Bank of Canada
- CWB.TO: Canadian Western Bank
- VBNK.TO: VersaBank
- EQB.TO: EQB Inc.
- NA.TO: National Bank of Canada
- BNS.TO: The Bank of Nova Scotia
- CM.TO: Canadian Imperial Bank of Commerce
- RY.TO: Royal Bank of Canada
- TD.TO: Toronto-Dominion Bank
- BMO.TO: Bank of Montreal
Here is a table comparing similar bank stocks in Canada as of January 21, 2024.
| Ticker | Company | Market Cap | Beta | P/E | Yield |
| LB | Laurentian Bank of Canada | $1,175,000,000 | 1.29 | 6.92 | 6.99% |
| CWB | Canadian Western Bank | $2,871,000,000 | 1.57 | 8.81 | 4.43% |
| VBNK | VersaBank | $387,311,000 | 1.06 | 9.52 | 0.67% |
| EQB | EQB Inc. | $3,407,000,000 | 1.66 | 9.60 | 1.79% |
| NA | National Bank of Canada | $33,888,000,000 | 1.11 | 10.68 | 4.23% |
| BNS | The Bank of Nova Scotia | $75,295,000,000 | 0.96 | 10.73 | 6.84% |
| CM | Canadian Imperial Bank of Commerce | $42,763,000,000 | 1.10 | 11.99 | 5.94% |
| RY | Royal Bank of Canada | $188,206,000,000 | 0.83 | 12.74 | 4.13% |
| TD | The Toronto-Dominion Bank | $145,353,000,000 | 0.85 | 14.49 | 5.03% |
| BMO | Bank of Montreal | $92,817,000,000 | 1.17 | 22.67 | 4.69% |
10. Bank of Montreal
Established in 1817, Bank of Montreal is headquartered in Montreal, Quebec. The Bank of Montreal offers a diverse range of financial services primarily in North America. Its operations are structured across segments such as Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets. Personal banking products encompass deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and various banking services. The commercial banking sector provides financing options, treasury and payment solutions, and risk management products. The company also delivers investing, banking, and wealth management advisory services, including digital investing. Its offerings extend to investment management services for institutional, retail, and high net worth investors, as well as diversified insurance, wealth, and pension de-risking solutions.
Bank of Montreal additionally provides individual life, critical illness, and annuity products, along with segregated funds, group creditor and travel insurance. Its services cover debt and equity capital-raising, loan origination, syndication, treasury management, mergers and acquisitions advice, restructuring, recapitalizations, trade finance, and risk mitigation. The company facilitates research and financial market access for institutional, corporate, and retail clients, offering a suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities. Furthermore, it engages in new product development, origination services, and risk management advisory services for hedging strategies.
9. Toronto-Dominion Bank
The Toronto-Dominion Bank and its subsidiaries offer a range of financial products and services in Canada, the United States, and internationally. The company operates through four segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. Its services include personal deposits like chequing, savings, and investment products; various financial solutions such as financing, investment, cash management, and international trade for businesses; and financing options for automotive and recreational vehicle purchases at the point of sale. The company also provides credit cards, payments, real estate secured lending, auto finance, consumer lending, and point-of-sale payment solutions for businesses. Wealth and asset management products, along with advisory services for retail and institutional clients, are offered through direct investing, advice-based, and asset management businesses. Additionally, the company provides property and casualty insurance, as well as life and health insurance products.
In the capital markets and corporate/investment banking realm, the company offers underwriting and distribution of new debt and equity issues, advice on strategic acquisitions and divestitures, and trading, funding, and investment services to corporations, governments, and institutions. The products and services are presented under the TD Bank and America’s Most Convenient Bank brand names. Founded in 1855, The Toronto-Dominion Bank is headquartered in Toronto, ON.
8. Royal Bank of Canada
Founded in 1864, Royal Bank of Canada is headquartered in Toronto, ON. Royal Bank of Canada operates globally as a diversified financial services company. Within its Personal & Commercial Banking segment, the company provides a range of services, including checking and savings accounts, home equity financing, personal lending, private banking, indirect lending (such as auto financing), mutual funds, self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment solutions. Additionally, this segment extends lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. Distribution channels include branches, automated teller machines, and mobile sales networks.
In the Wealth Management segment, Royal Bank of Canada offers a suite of wealth, investment, trust, banking, credit, and advice-based solutions to high net worth and ultra-high net-worth individuals, as well as institutional clients. Asset management products are provided to both institutional and individual clients, and asset and investor services are offered to financial institutions, asset managers, and asset owners.
The Insurance segment delivers various insurance products and solutions, covering life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance. Services include business insurance advice to individual, business, and group clients through advice centers, RBC insurance stores, mobile advisors, digital platforms, and independent brokers and partners.
In the Capital Markets segment, the company provides advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments.
7. Canadian Imperial Bank of Commerce
Canadian Imperial Bank of Commerce, a diversified financial institution, delivers a range of financial products and services to personal, business, public sector, and institutional clients across Canada, the United States, and internationally. The company operates through various segments, including Canadian Personal and Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, Capital Markets and Direct Financial Services, and Corporate and Other.
Its offerings encompass checking, savings, and business accounts; mortgages; loans for business, car, and other purposes; lines of credit, student lines of credit, and agriculture loans; along with small business financing and overdraft protection services. Additionally, the company provides investment and insurance services, credit cards, ATMs, as well as mobile, online, and global money and wire transfer services. Founded in 1867, the Canadian Imperial Bank of Commerce is headquartered in Toronto, ON.
6. The Bank of Nova Scotia
Founded in 1832, The Bank of Nova Scotia is headquartered in Toronto, ON. The Bank of Nova Scotia delivers a diverse range of banking products and services across Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, as well as internationally. Its operations are structured through segments including Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets.
The company provides comprehensive financial advice and solutions, along with banking products such as debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance for individuals. Additionally, it offers retail automotive financing solutions. For businesses, The Bank of Nova Scotia delivers business banking solutions, covering lending, deposit, cash management, and trade finance for small, medium, and large enterprises.
In the realm of wealth management, the bank provides advice and solutions, encompassing online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services. Its offerings extend to retail mutual funds, exchange-traded funds, liquid alternatives, and institutional funds.
5. National Bank of Canada
Founded in 1859, the National Bank of Canada is headquartered in Montreal, Quebec. National Bank of Canada delivers financial services to individuals, businesses, institutional clients, and governments in both Canadian and international markets. The bank operates through four key segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International.
Within the Personal and Commercial segment, the bank provides personal banking services such as transaction solutions, mortgage loans, home equity lines of credit, consumer loans, payment solutions, and savings and investment products. Additionally, it offers various insurance products and a range of commercial banking services, including credit and deposit solutions, investment services, international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complementary services.
The Wealth Management segment offers a comprehensive suite of services, including full-service brokerage, private banking, direct brokerage, investment solutions, administrative and trade execution, transaction products, and trust and estate services.
The Financial Markets segment specializes in corporate banking, advisory, and capital markets services. It provides project financing, debt and equity underwriting, as well as advisory services in mergers and acquisitions and financing. The U.S. Specialty Finance and International segment focus on specialty finance products and offers personal and commercial banking services in Cambodia.
4. EQB Inc.
EQB Inc., operating through its subsidiary Equitable Bank, delivers personal and commercial banking services to retail and commercial customers in Canada. The company accepts various deposits, including term deposits, guaranteed investment certificates, high-interest savings accounts, institutional deposit notes, and covered bonds. It also provides specialized financing solutions.
Equitable Bank offers a range of residential mortgages, reverse mortgages, home equity lines of credit, and insurance loans. In the commercial banking sector, it extends business enterprise solutions for small-business owners, entrepreneurs, owner-operators, and emerging investors. The company also provides commercial loans, covering construction, bridge, or long-term financing, along with structured financing solutions for specialty lenders in diverse asset classes of underbanked and unconventional industries.
Additionally, EQB Inc. offers digital banking services. Formerly known as Equitable Group Inc., the company changed its name to EQB Inc. in June 2022. Founded in 1970, EQB Inc. is headquartered in Toronto, ON.
3. VersaBank
VersaBank delivers a range of banking products and services in both Canada and the United States. The offerings include various deposit products such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts. The company also provides deposit insurance products.
In the lending sector, VersaBank offers point-of-sale financing, covering the purchase of loan and lease receivables from finance companies across different industries. Its commercial banking services encompass commercial real estate, public sector/infrastructure financing, and condominium financing. Additionally, the bank provides residential mortgages.
VersaBank extends its services to include cybersecurity, addressing the evolving needs in the digital landscape. Formerly known as Pacific & Western Bank of Canada, the company underwent a name change to VersaBank in May 2016. Founded in 1979, VersaBank is headquartered in London, Ontario.
2. Canadian Western Bank
Canadian Western Bank delivers personal and business banking products and services primarily in Western Canada. Canadian Western Bank was founded in 1984 and is headquartered in Edmonton, Alberta. The company provides a range of account options, including current, savings, notice, cash management, US dollar, and chequing accounts, along with organization, business trust, and trust fund investment accounts.
In addition to commercial lending, real estate, equipment financing, and leasing products, Canadian Western Bank offers agricultural lending products, mortgages, lines of credits, registered retirement savings loans, consolidation and vehicle loans, as well as credit cards. The bank also provides cash management services, life and disability insurance products, and ATM, mobile, and online banking services, including cheque order services.
Furthermore, Canadian Western Bank offers investment products such as guaranteed investment certificates, US dollar investment plans, registered retirement income funds, tax-free savings accounts, registered education savings plans, and mutual funds. The bank also provides personal and business planning services.
1. Laurentian Bank of Canada
Laurentian Bank of Canada, along with its subsidiaries, provides diverse financial services to personal, business, and institutional customers in both Canada and the United States. Founded in 1846, Laurentian Bank of Canada is headquartered in Montreal, Quebec.The company operates through three key segments: Personal Banking, Commercial Banking, and Capital Markets.
In the Personal Banking segment, the bank offers financial advisory services to financial intermediaries and operates a digital direct-to-customer platform for retail clients. The Commercial Banking segment provides a range of financial services, encompassing commercial banking, real estate financing, and equipment and inventory financing tailored to business clients. The Capital Markets segment offers services such as research, market analysis, and advisory services, along with corporate underwriting services for both debt and equity, and administrative services.
