Here's an interesting follow-up to yesterday's post on the rising interest in Bank of America Corp. by the Canada Pension Plan Investment Board: The CPPIB seems more interested in the down-on-its-heels U.S. bank than its high-flying Canadian counterparts.
A brief re-cap: According to the CPPIB's 13F filing with the Securities and Exchange Commission, the board increased its slice of Bank of America to nearly 9.5 million shares at the end of the first quarter, worth $169-million (U.S.) - nearly a five-fold increase over the fourth quarter.
It's still not a huge holding, given that CPPIB manages about $124-billion (Canadian) in assets. But here's the interesting part: CPPIB's bet on Bank of America is bigger than its bet on all of the largest Canadian banks combined.
The board owns about 660,000 shares in Toronto-Dominion Bank, worth about $50-million at the end of the first quarter. For Royal Bank of Canada, the holding is worth $24-million. And for the other three, the holdings are nearly trivial. Bank of Nova Scotia: $12-million. Canadian Imperial Bank of Commerce: $4.6-million. Bank of Montreal: $2.8-million. (Full disclosure: I own shares in Royal Bank and CIBC.)
While Canadian banks have become world renowned for their stability and dividend-generating prowess throughout the financial crisis, the CPPIB seems to see better investing opportunities elsewhere.