The Big Five Banks: A Look at the Largest Major Banks in Canada
Canada’s big five banks are among the largest and most respected financial institutions worldwide. And while they dominate the landscape in Canada, their operations extend well beyond our borders. But how big are the Canadian banks, and how do they compare?
In this article, I rank the big five banks by assets and provide you with key information about each. I also share some pros and cons of dealing with a big bank.
1. Toronto Dominion Bank (TSX:TD)
Head Office: Toronto, Canada
CEO: Bharat Masrani
Total Assets: $1,917,528 trillion (October 31, 2022)
Annual Revenue: $41 billion
Net Income – Reported: $17.429 billion
Market Capitalization: $161.8 billion
# of Branches: 1,060
# of Employees: 94,867
TD Bank is the largest Canadian bank measured by assets, with $1.9 trillion in total assets as of October 31, 2022. It serves more than 27 million customers worldwide and 13.5 million in Canada at over 1000 branch locations.
TD’s strength in Canada lies in its massive retail banking operation, which comprises the following businesses: TD Canada Trust, TD Business Banking, TD Auto Finance, TD Wealth, TD Insurance, and TD Direct Investing, which is our top-rated big bank online broker.
TD is well-known for being a genuinely North American bank. They are the parent company of TD Bank, America’s Most Convenient Bank, one of the ten largest banks in the U.S. The U.S. operation serves close to 10 million customers at more than 1,100 branches along the eastern seaboard of the U.S., from Maine to Florida.
2. Royal Bank of Canada (TSX:RY)
Head Office: Toronto, Canada
CEO: David Ian McKay
Total Assets: $1,917,219 trillion (October 31, 2022)
Annual Revenue: $48.9 billion
Net Income – Reported: $15.8 billion
Market Capitalization: $177.79 billion
# of Branches: 1271
# of Employees: 91,427
Royal Bank of Canada (RBC) is Canada’s 2nd largest bank by assets, and its largest by market capitalization and revenue, with over $48 billion earned in 2022. RBC boasts the largest retail branch network in Canada, with more than 1200 branches, and serves more than 17 million clients worldwide.
In addition to Personal Banking, RBC operates in Commercial Banking, Wealth Management, Investor & Treasury Services, Capital Markets, and Insurance.
In 2022, Royal Bank signed a $13.5 billion deal to purchase HSBC’s Canadian banking operations. If the agreement is finalized, it will significantly boost RBC’s operations (HSBC Canada has more than $130 billion in assets and serves over 800,000 customers in Canada.)
3. Scotiabank (TSX:BNS)
Head Office: Toronto, Canada
CEO: Brian J. Porter
Total Assets and Assets Under Administration: $1,349,418 trillion (October 31, 2022)
Net Income – Reported: $10.174 billion
Market Capitalization: $79.06 billion
Annual Revenue: $31.4 billion
Number of Branches: 900+
Number of Employees: 90,979
Scotiabank is the third largest bank in Canada, with assets of over $1.35 trillion as of October 31, 2022. While quite a bit smaller than both TD and RBC, Scotiabank remains a top 10 North American financial institution. In addition to serving more than 10 million Canadian customers through its 900+ branches, Scotiabank has a sizeable international presence.
Their International Banking division services personal and commercial customers across Latin America, including Mexico, Peru, Chile, Colombia, and the Caribbean and Central America.
Scotiabank is the parent company of Tangerine, one of Canada’s largest online banks. Tangerine offers a wide variety of personal and small business banking products, including no-fee chequing and high-interest savings accounts, credit cards, mortgages, investment funds, and more. Tangerine is well-known for its generous welcome bonuses for new customers. For more information, check out our full Tangerine review.
4. Bank of Montreal (TSX:BMO)
Head Office: Montreal, Quebec
CEO: Darryl White
Total Assets: $1,139,199 trillion (October 31, 2022)
Annual Revenue: $26.9 billion (2022)
Net Income – Reported: $13.5 billion (2022)
Market Capitalization: $85.6 billion (2022)
# of Branches: 800+
#of Employees: 46,722
Bank of Montreal, or BMO, is Canada’s 4th largest bank and the 8th largest bank in North America by asset size, serving more than 12 million customers. BMO also has the distinction of being the oldest bank in Canada. It was founded in 1817 as the Montreal Bank, Canada’s first bank. BMO is also one of the world’s longest dividend payers; the company has not missed a dividend payment since 1829, a track record that will impress any dividend investor.
Similar to TD, Bank of Montreal has a substantial presence in the U.S. through its subsidiary, BMO Harris Bank N.A.
And BMO continues to expand its footprint south of the border. In late 2021, they entered an agreement with BNP Paribas to purchase California-based Bank of the West for $16.3 billion (USD). The acquisition will add almost 2 million customers and more than 500 branches, giving BMO a strong presence in one of the largest markets in the U.S. The deal is expected to be finalized during the first quarter of 2023.
5. Canadian Imperial Bank of Commerce (TSX:CM)
Head Office: Toronto, Canada
CEO: Victor Dodig
Total Assets: $943,597 billion (October 31, 2022)
Annual Revenue: $22.2 billion
Net Income – Reported: $6.2 billion (2022)
Market Capitalization: $50.7 billion
# of Branches: 1,069
# of Employees: 50,427
CIBC is the smallest of the big five banks, with $943,597 billion in assets reported at the end of the 2022 fiscal year. Still, they are a major North American financial institution, serving more than 11 million customers across Personal and Business Banking, Commercial Banking ad Wealth Management, and Capital Markets businesses. They have over 50,000 employees and operate over 1000 retail branches in Canada.
As recently as the 1990s, CIBC was the second largest bank in Canada, but its position shifted due to several mergers, including TD’s purchase of Canada Trust and a failed entry into the U.S. market.
Today, CIBC maintains a small presence south of the border, focusing on Commercial Banking and Wealth Management operations in various U.S. markets.
Pros and Cons of Dealing with the Big Five Banks
The largest banks in Canada dominate market share in the financial services industry, and most Canadians have at least one bank account or credit card with a big five bank.
There are several benefits to doing business with a major bank like TD or RBC, but there are also some drawbacks, especially if you use them for all your banking needs.
Here’s my list of big bank pros and cons:
- Convenience: the big banks have the largest branch and ATM networks across Canada. Regardless of the bank you deal with, unless you live in a rural area, chances are there’s a branch or ATM.
- They offer the broadest range of products and services: Canadian banks offer hundreds of products and services to their personal and small business banking clients. Other financial institutions, including digital banks and credit unions, may offer lower fees and better rates, but they can’t match the sheer number of products and services.
- They have excellent credit card products: Many of the best credit cards in Canada belong to big banks. They offer great travel and cash back rewards and other perks, like insurance coverage.
For example, the CIBC Dividend Visa Infinite and Scotia Momentum Visa Infinite cards are arguably the two best cash back credit cards in Canada. And TD’s Aeroplan Visa Infinite card and the Westjet RBC World Elite Mastercard are among the top travel rewards cards.
- Extensive wealth management services: Nowadays, many Canadians invest independently through online brokers and robo-advisors. But if you prefer to deal with a human advisor, Canadian banks offer wealth management services for all portfolio sizes. They offer everything from in-depth financial planning to brokerage services to discretionary wealth management.
- Fees are too high: Depending on the bank, unless you maintain a minimum balance of $4000 to $5000 in your chequing account, you’ll pay anywhere from $16 a month or more for a chequing account with unlimited transactions. While you get value for your money through a large branch network and top-notch online banking services, you can get a free chequing account with no minimum balance requirement and unlimited transactions from any online bank.
- Low interest in savings accounts: My biggest frustration with Canadian banks is that they aren’t competitive regarding short-term savings. The recent increase in interest rates in Canada has magnified the problem. Online banks and credit unions have steadily increased their rates while the banks continue to lag. For example, at the time of this writing, EQ Bank, an online bank, is offering 2.50% interest on its savings account, which is free and features unlimited transactions. Tangerine offers new customers 5.00% interest on their savings account for the first five months. By comparison, RBC’s High-Interest eSavings is paying 1.40%. TD’s ePremium Savings account is only slightly higher, at 1.50% on balances above $10,000. Below $10,000, it’s o.01%.
Should You Deal with a Big Five Bank?
Canada’s big banks often get a bad rap for their high account fees and low-interest rates on savings accounts and even GICs. And while the criticism may be justified, Canadian banks continue to offer the broadest range of financial products and services to Canadians and top-notch mobile and online banking platforms.
So, should you deal with a big five bank? If your banking needs are straightforward – you only need a chequing or savings account with a debit card, and your pay goes into your account via direct deposit – I recommend opening an account with an online bank like Tangerine.
But if you have multiple accounts, including RRSPs, RESPs, a TFSA, a mortgage, loans, credit cards, etc. I recommend dealing with a big bank and, if needed, using an online bank for its no-fee chequing and high interests savings accounts.