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EspañolBIG FIVE (BANKS)
In Canada, the term 'Big Five Banks' is frequently used to refer to the five biggest banks that dominate the banking industry in Canada. All five banks are headquartered in Toronto or in Montréal.
The Big Five Banks are all classified as Schedule I banks that are domestic banks operating in Canada under government charter. Widely used and trusted[1], their services form an important part of the Canadian economy. The banks' shares are widely held, with any entity allowed to hold a maximum of twenty percent, and there are also restrictions on foreign ownership.[2]
The Big Five banks, listed in order of market capitalization (largest to smallest) with their current corporate brand names, are:
★ Royal Bank of Canada (RBC Financial Group)
★ Toronto-Dominion Bank (TD Bank Financial Group)
★ Bank of Nova Scotia (Scotiabank)
★ Bank of Montreal (BMO Financial Group)
★ Canadian Imperial Bank of Commerce (CIBC)
In modern history, the Royal Bank has always been the largest by a significant margin. Up to the late 1990s, CIBC was the second largest, followed by Bank of Montreal, Scotiabank, and TD Bank. During the late 1990s and beyond, this ranking changed due to several re-organizations. Royal Bank acquired Royal Trust, then the second largest trust in Canada, in 1993, 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 (outside of the US) 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, and thus it vaulted TD into the number two spot. While there were no major changes to Bank of Montreal, CIBC's unsuccessful foray into the US market led it to shed its assets there, dropping it to the number five spot.
The term 'Big Six Banks' is frequently used as well. The "Big Six" also includes the National Bank of Canada, though it is significantly smaller than the other major banks and is focused in the Quebec province. The Big Six chartered banks participate in the Large Value Transfer System (LVTS) together with 8 other banks (including the Bank of Canada).
In 1998, the Bank of Montreal proposed a merger with Royal Bank around the same time that CIBC proposed a merger with the Toronto-Dominion Bank. This would have left Canada with only three major national banks. Thus, the mergers were reviewed by the Competition Bureau of Canada. The Competition Bureau 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. [1]
★ Banking in Canada
★ Credit Union
★ List of banks in Canada
1. Canada Deposit Insurance Corporation Act - Deposit Insurance
2. Bank Act - Part VII: Ownership of Banks
★ Bank of Montreal
★ Bank of Nova Scotia
★ CIBC
★ National Bank of Canada
★ Royal Bank of Canada/RBC
★ TD Canada Trust
The Big Five Banks are all classified as Schedule I banks that are domestic banks operating in Canada under government charter. Widely used and trusted[1], their services form an important part of the Canadian economy. The banks' shares are widely held, with any entity allowed to hold a maximum of twenty percent, and there are also restrictions on foreign ownership.[2]
| Contents |
| Ranking |
| Quick facts |
| Proposed Mergers |
| See also |
| References |
| External links |
Ranking
The Big Five banks, listed in order of market capitalization (largest to smallest) with their current corporate brand names, are:
★ Royal Bank of Canada (RBC Financial Group)
★ Toronto-Dominion Bank (TD Bank Financial Group)
★ Bank of Nova Scotia (Scotiabank)
★ Bank of Montreal (BMO Financial Group)
★ Canadian Imperial Bank of Commerce (CIBC)
In modern history, the Royal Bank has always been the largest by a significant margin. Up to the late 1990s, CIBC was the second largest, followed by Bank of Montreal, Scotiabank, and TD Bank. During the late 1990s and beyond, this ranking changed due to several re-organizations. Royal Bank acquired Royal Trust, then the second largest trust in Canada, in 1993, 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 (outside of the US) 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, and thus it vaulted TD into the number two spot. While there were no major changes to Bank of Montreal, CIBC's unsuccessful foray into the US market led it to shed its assets there, dropping it to the number five spot.
The term 'Big Six Banks' is frequently used as well. The "Big Six" also includes the National Bank of Canada, though it is significantly smaller than the other major banks and is focused in the Quebec province. The Big Six chartered banks participate in the Large Value Transfer System (LVTS) together with 8 other banks (including the Bank of Canada).
Quick facts
Proposed Mergers
In 1998, the Bank of Montreal proposed a merger with Royal Bank around the same time that CIBC proposed a merger with the Toronto-Dominion Bank. This would have left Canada with only three major national banks. Thus, the mergers were reviewed by the Competition Bureau of Canada. The Competition Bureau 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. [1]
See also
★ Banking in Canada
★ Credit Union
★ List of banks in Canada
References
1. Canada Deposit Insurance Corporation Act - Deposit Insurance
2. Bank Act - Part VII: Ownership of Banks
External links
★ Bank of Montreal
★ Bank of Nova Scotia
★ CIBC
★ National Bank of Canada
★ Royal Bank of Canada/RBC
★ TD Canada Trust
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