Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Visit this year's Top 1000 rankings of Canada's most profitable companies and find more tables, multimedia and analysis in Report on Business's full Top 1000 section. The most comprehensive database of Canadian corporate financial information is available for purchase in spreadsheet format here.

Sure, Canada’s big banks face a few challenges. But let’s be honest: They still vacuum up the majority of profits—more than $34 billion in 2015, or roughly 10 times the take for Canadian utilities and three times that of the nation’s insurers. Even when you compare the Big Six to global banks like JPMorgan and HSBC, they still shine.

Canadian banks stand out among many of their global peers for stability and big dividends—but check out those gargantuan profits, too. One way to measure how good the banks have it here is to size them up using return on equity, or net income divided by shareholders’ equity.

The average ROE for U.S. banks is 8.3%. Canada’s Big Six, meanwhile, enjoy an average ROE that’s an astounding 16%, putting them at the top of the sector in the developed world. Focus solely on their domestic operations and the numbers look even more rosy: RBC (No. 1) has an ROE of 30% in its personal and commercial banking division; at TD Bank (No. 2), the comparable figure climbs to more than 40%.

Why are Canadian banks sitting on gold? For one thing, they enjoy an oligopoly, where upstart competitors are unlikely to undercut them. For another, they enjoy the benefits of guaranteed mortgages through the Canada Mortgage and Housing Corp. That last point delivers the banks a huge advantage. Because they have low capital requirements—with the CMHC backstopping loans, the risks of default are muted—they can put more of their cash to work.

But can the good times last forever? Maybe not. With their fat profits, Canadian banks look like ideal targets for disruption.

Total return on equity

RBC
18.6%
Canadian banking
30%
TD BANK
13.4%
Canadian banking
42.8%
SCOTIABANK
14.6%
Canadian banking
21%
International banking
13%
BANK OF MONTREAL
12.5%
Canadian banking
16.1%
CIBC
18.7%
Canadian banking
55.6%
NATIONAL BANK OF CANADA
16.9%
WELLS FARGO & CO.
12.5%
BANK OF AMERICA
6.1%
JPMORGAN
9.1%
BARCLAYS PLC
1.7%
HSBC
6.4%
SOURCE: BLOOMBERG
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Latest Videos

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies