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The Globe and Mail

Canadian investment banks crack global top 20 in fees

Bank towers in Toronto

Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail

It's the time of year when the reports start to come in of which investment banks are busiest in the businesses of merger advice, stock underwriting, lending and debt sales.

Banks have been known to fight to get to the top of those rankings, with tactics that will include everything from price cuts to get in on deals, to simple begging for credit on a deal that they didn't really do much work on.

The upshot is that top rankings in the so-called league tables don't necessarily translate to the biggest fee incomes.

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Where it counts -- in the fees they earn from deals -- two Canadian firms brought in enough to crack the global top 20 rankings, according to new figures from Thomson Reuters.

RBC, an arm of Royal Bank of Canada , finished 11th with $1.44-billion (U.S.). That's roughly the same as in 2010.

BMO, part of Bank of Montreal , soared four spots to the 20th slot. The bank booked a 21 per cent increase in fees to $720.8-million, a very impressive improvement in a year when global fee declined 6 per cent, according to Thomson Reuters estimates.

RBC is by far the biggest Canadian-based investment banking firm, but the rankings show just how far behind the biggest in the world the Canadian company is. (To be fair, RBC has never made turning into the next JP Morgan a priority. It has a strategy of trying to be No. 1 in Canada and steadily increasing its market share in other regions, such as the U.S.)

To get into the top 10 globally, RBC needs to overtake Wells Fargo, which finished 2011 with an estimated $1.58-billion in fees. To get into the top five, it will need to more than double fees to catch Credit Suisse, which is earning an estimated $3.5-billion.

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