The banking system in Canada is considered to be one of the safest in the world. Since 2010, it has consistently been ranked as the world's single largest banking system, as reported by the World Economic Forum. Below is our analysis of each of Canada's three biggest banks, which are the Royal Bank of Canada, the Toronto Dominion Bank and the Bank of Nova Scotia.
- Banks established in Canada operate under charter and many have operations in the United States as well.
- The largest Canadian banks are known as the "Big Five," with the Royal Bank of Canada (RBC) being the largest.
- The top three is rounded out by Toronto Dominion (TD) and the Bank of Nova Scotia (Scotiabank) in second and third, respectively.
Known also as chartered banks, Canada's banks have more than 8,000 branches and nearly 20,000 automated banking machines. Initially, banking in Canada operated via colonial overseas operations, but it transitioned to a local banking system in 1817 when the Bank of Montreal was founded. Other banks quickly followed. The Canadian dollar officially took form in 1871 and supplanted individual bank currencies. In the 1980s and 1990s, Canada's largest banks acquired nearly all trust and brokerage companies and began their own insurance and mutual fund businesses as well.
In regular commerce, Canadian banks are typically referred to in two categories: the five largest banks, known as the Big Five banks, and then a group of smaller, second-tier banks. In addition to the Royal Bank of Canada, the Toronto Dominion Bank, and the Bank of Nova Scotia, the Big Five also includes the Bank of Montreal (NMO) and the Canadian Imperial Bank of Commerce (CIBC).
Royal Bank of Canada
The Royal Bank of Canada, commonly referred to as the RBC, is Canada’s largest financial institution, with a market capitalization of nearly CAD$150 billion. Worldwide, the bank has over 86,000 employees and serves approximately 16 million clients.
Founded in 1864 in Halifax, Nova Scotia, the company is now headquartered in Montreal, Quebec with its primary operational office in Toronto. In Canada, the bank is branded RBC Royal Bank or RBC Banque Royale in French.
There are approximately 1,210 RBC branches in Canada. In the United States, RBC Bank exists as a retail banking subsidiary with nearly 450 branches spanning six Southeastern states and serving nearly 1 million clients. The bank has a worldwide investment and corporate banking subsidiary, RBC Capital Markets, and an investment brokerage firm known as RBC Dominion Securities.
Toronto Dominion Bank
The Toronto Dominion Bank, commonly known by the initials TD, is headquartered in Toronto and is a multinational financial and banking services corporation. This bank was formed in 1955 from the merger of the Bank of Toronto, established in 1855, and the Dominion Bank, established in 1869. Based on its CAD$132.8 billion market capitalization, the TD Bank Group is among the top ten banks located in North America.
According to a report by Forbes, Toronto Dominion is ranked the 19th largest bank in the world. Among the bank and its subsidiaries, more than 85,000 individuals are employed and over 22 million clients are served worldwide. The bank operates as TD Canada Trust in Canada and serves more than 11 million clients at 1,150 branches. In the U.S., the bank operates as TD Bank, and it was created through the merger of TD Bank North and Commerce Bank. The U.S. subsidiary has almost 1,300 branches and serves nearly 6.5 million customers.
Bank of Nova Scotia
The Bank of Nova Scotia (BNS), more commonly known as Scotiabank, is Canada’s third largest bank in terms of deposits. It has a market capitalization of just under CAD$90.9 billion. Operating in more than 50 countries around the world, the bank serves more than 25 million customers and provides a vast range of services and products including commercial and personal banking, corporate and investment banking, and wealth management. Scotiabank shares are traded on both the Toronto and New York stock exchanges.
The bank was incorporated in 1832 in Halifax, later moving its executive offices to Toronto in 1900. Scotiabank has touted itself as being Canada's most international bank because of its acquisitions in Latin America, the Caribbean, India and Europe. It is a member of the London Bullion Market Association.