A robust collection of mergers and financings outside of the sluggish resource sector propelled Canadian investment banks through 2013.
The investment bankers at RBC Dominion Securities Inc. were the big winners, topping the year's deal-making charts.
"The resources businesses, in particular mining, were slower than they have been in other years, and we saw some of the slack being picked up by other industries," said Doug Guzman, head of global investment banking at RBC. "That would be true in equity new issuance as well as M&A."
RBC's capital markets unit, Canada's largest investment bank, outpaced competitors in equity underwriting, where it raised $5.3-billion for clients, and in acquisition advice, where it was a lead book runner on 57 deals valued at $32.6-billion. The bank also came out on top in initial public offerings and debt sales.
The tide of deals in 2013 was different than in previous years, with a substantial amount of activity stemming from transactions focused on the retail sector. M&A activity was highlighted by Loblaw Cos. Ltd.'s $13-billion acquisition of Shoppers Drug Mart Corp. And Empire Co. Ltd. did a rare $1.8-billion equity deal to fund subsidiary Sobeys Inc.'s acquisition of grocery business Safeway Canada Ltd.
The Empire financing deal helped push BMO Nesbitt Burns up the equity issuance charts, to $4.7-billion raised, second after RBC.
"In a country with capital markets so reliant on natural resources, and in a year where natural resources were very weak, that we had the kind of activity we did, I think, is impressive," said Peter Miller, head of Canadian equity capital markets, at BMO.
Mega grocery deals are unlikely to buoy the deal-making environment again next year, but there are other pockets of opportunity, the bankers said.
Although the $3.1-billion stock sale by Barrick Gold Corp. was the year's largest equity offering, activity in the mining sector was otherwise quiet through 2013. Mr. Guzman said he doesn't expect this to change in the coming year.
More broadly, though, Mr. Guzman thinks management teams will increasingly seek to build their businesses in 2014, instead of focusing on cost cutting as they have in recent years.