Big Six is the name given for the six major Banking Institutions in Canada. This list includes Royal Bank of Canada, Bank of Nova Scotia, Toronto Dominion Bank, Canadian Imperial Bank of Commerce, National Bank of Canada and Bank of Montreal.
Edwards feels that all the Canadian banking stocks, are somewhat safe and they will all produce similar returns over time. He did note that all the Canadian banks have lower common equity ratios than what will be required by Basel Reforms decided in September of this year. This means the Canadian banks use more leverage than its American cousins.
The Canadian Banks also have a much worse Return on Assets (ROA) than its American peers. Royal Bank has a ROA of 0.75 which is considered quite poor in the financial world. This compares to PNC Financial an American bank which has a 1.28. The higher the ROA the quicker the bank is growing.
However, if one does want to invest in Canadian banks here is a list from best to worst. Click Here
No comments:
Post a Comment