Banking Research

This report is an analysis of the big 6 banks to make a recommendation to investors on where to
invest a $100,000 portfolio. This report will analyze the most recent financial reports of the big
six banks on profitability and performance metrics. The banks being analyzed are the National
Bank of Canada, Royal Bank, Bank of Montreal, Canadian Imperial Bank of Commerce, Bank of
Nova Scotia and Toronto Dominion Bank.
This report further evaluates the history of the banks to analyze its experience and expertise in
handling customer funds.
Royal Bank of Canada
The Royal Bank of Canada (RBC) is a Canadian Retail Bank which was formed in 1864 in
Halifax regional municipality in Canada. It has its headquarters in Montreal Quebec. The bank
serves 17 million customers in Canada, United States and 27 other countries (RBC 2021) . It
provides an array of financial services such as personal banking, wealth management, insurance,
stock market products. RBC manages assets worth C$ 1.706 trillion (RBC 2021). For the
financial year ended December 2021, RBC reported revenues worth C$ 49,693 million and in the
process made profits worth C$16,050 which was a 40.3% increase from 2020 (RBC 2021). The
personal and commercial banking sector contributed 54.3 %. RBC reported a basic earnings per
share of C$ 11.08 and a return on common equity of C$ 18.6%. RBC employs over 85,301
employees and operates 1295 physical branches (RBC 2021).
National Bank of Canada (NBC)
The National Bank of Canada (NBC) was formed in 1859 in Montreal Canada. NBC primarily
offers 3 services which are personal and commercial banking, wealth management and financial

markets. NBC serves 2.7 million customers and manages assets worth C$ 652 billion in the
spread between Canada and the United States and has a market capitalization of $34.6 billion
(NBC 2021). NBC shares are traded in the Toronto Stock Exchange under the code (TSX: NA)
(NBC 2021). NBC reported C$ 8.927 billion in revenues for the financial year ended 31 st
October 2021 which was a 13% increase from 2020 (NBC 2021). NBC reported a Return on
Equity of 20.7 to its shareholders and a Return on Equity of 18.6% and a basic earnings per share
of $ 9.06. NBC has 26,920 as at 31 st October 2021 and operated 384 branches in Canada (NBC
2021) .
Bank of Montreal
The Bank of Montreal (BMO) was founded in 1817 in Montreal Canada. BMO offers several
offerings to customers such as personal and commercial banking, investment services, insurance,
financial planning and consultancy. It serves a customer base of more than 12 million customers
in Canada and United States (BMO 2021). BMO is traded in the TSX under the Code (TSX:
BMO). BMO reported revenues worth C$ 22.787 billion and a net income of C$ 7.754 billion
(BMO 2021). At the time, BMO managed assets worth C$ 988 billion. BMO reported a return on
equity of 14.9% after paying dividends per share of C$ 4.24. The earnings per share was $11.60
(BMO 2021).
Canadian Imperial Bank of Commerce
The Canadian Imperial Bank of Commerce (CIBC) was formed in 1961 after a merger between
the Canadian Bank of Commerce and the Imperial Bank of Canada. The merging banks were
established in 1867 and 1875 respectively demonstrating a wealth of experience in matters
finance. CIBC currently serves 11M clients, to whom it offers a wide array of services such as

personal and commercial banking, wealth management, investment banking and capital markets
(CIBC 2021). For the financial year ended 31 st October 2021, the bank reported a revenue of C$
20.0 billion a net income of C$ 6.4 billion (CIBC 2021). The return on investment (ROI) was
16.1% and their earnings per share was C$ 13.9. CIBC managed assets worth C$ 316 billion as
at the close of the 2021 financial year (CIBC 2021).
Bank of Nova Scotia
The Bank of Nova Scotia also known as Scotia Bank was founded in 1832 in Halifax Regional
Municipality in Canada. The bank offers its services to Canadian residents, United States and
other locations in the Caribbean. Scotiabank reported revenues worth C$31.252 billion for the
financial year ended 31 st October 2021. Scotiabank made net income worth C$ 9.39 billion and
an earnings per share of C$ 7.70 and a return on equity of 14.7%. At the close of the financial
year, Scotia Bank was managing assets worth C$345 billion and the total assets worth C$1.184
trillion. Scotiabank trades in the Toronto stock exchange under the code (TSX: BNS).
Toronto Domonion Bank
The Toronto Dominion Bank (TD Bank) was formed in 1955 after a merger between Bank of
Toronto and Dominion Bank. The bank has offerings such as personal and commercial banking,
wealth management, investment banking and consultancy. It is also a publicly traded bank in the
Toronto stock exchange under the code (TSX: TD). The Bank recorded revenues worth C$
42.693 billion and net income worth C$ 14.049 billion. The earnings per share was C$ 7.73. The
bank has total assets worth C$ 1.73 trillion. The bank serves over million customers globally and
had 89,464 employees as at the close of the 2021 financial year.

From the above analysis National Bank of Canada (NBC), Royal Bank of Canda (RBC) and
Canadian Imperial Bank of Commerce (CIBC) are the ideal banks to consider for investment.
Both NBC and RBC offer an ROE of 18.6% while CIBC offers 16%. The 3 banks have wealth of
experience having both been formed in the 1800s and having product offerings in Canada and
beyond. All the three banks manage a considerable size of assets in Canada and beyond. The
organizations

References

Bank of Montreal (BMO). (2021). 2021 Annual Report to Shareholder. Bmo.Com. Retrieved
2022, from https://www.bmo.com/ir/archive/en/bmo_ar2021.pdf
National Bank of Canada (NBC). (2021). 2021 Annual Report. Nbc.Ca. Retrieved 2022, from
https://www.nbc.ca/content/dam/bnc/a-propos-de-nous/relations-investisseurs/assemblee-
annuelle/2022/na-2021-annual-report.pdf
Royal Bank of Canada (RBC). (2021). Royal Bank of Canada Annual Report 2021. Rbc.Com.
Retrieved 2022, from https://www.rbc.com/investor-relations/_assets-
custom/pdf/ar_2021_e.pdf