Alexia Addona
Jonathan Beaudoin
Yannick Bérubé
Elric Boisvert
 Brief Overview of Present
System
 Banking Structure:
 Bank of Canada &
Regulations
 Banking Practices:
 Retail Banking
 Wealth Management
 Brokerage Activities
 Big 5 & Subsidiaries
 Second Tier Banks
 Other Financial
Institutions
 Extremely competitive industry.
 Over 3,000 competitors.
 Some in niche markets, some in
all markets (like Big 5).
 Banks’ role is to channel funds
from individuals, institutions,
etc., who have surplus funds to
people who wish to use those
funds.
 Other roles: payment system,
vehicle for Canadian monetary
policy and as the federal
government's instrument for
some social and political
policies.
 Mergers highly
regulated and often
turned down.
 Example: 1990s
RBC/BMO and
CIBC/TD mergers.
 Bank of Canada
 CDIC
 Chartered banks
 Big 5 and affiliates
 Second tier banks
 Other financial institutions
 The Office of the
Superintendent of
Financial
Institutions (OSFI)
• Founded in 1935 in Ottawa
• Public institution
• Independent from the government
• Led by the Governing Council
“Bank of the commercial banks’’
Controls inflation
Regulation of the interest rates
Supplier of Canada’s bank notes
Fiscal agent of the Government of Canada
Research on domestic and foreign financial
markets
Lender of last resort
Role of the Minister of Finance
Canada Deposit Insurance Corporation
(CDIC)
Rules on capital, liquidity, and management
of systematic risk
Bank Act
Retail Banking
 Bank executes transactions
with consumers
 Service offered: personal
loans, debit cards, savings
account,etc
Wholesale Banking
 Deals with corporations and
other banks.
 Services offered: Currency
conversion, working capital
financing, corporate loans, etc
Wealth Management
 Combination of financial
investment advice,
accounting/tax services and
legal planning for one fee.
Mutual Funds
 An investment vehicle that is
made up of a pool of funds
collected from many investors
for the purpose of investing in
securities.
 Goal is to earn capital gains
Insurance
 A practice or arrangement by
which a company or government
agency provides a guarantee of
compensation for specified loss,
damage, illness, or death in
return for payment of a
premium.
Credit Cards
 A credit card is a payment card
issued to users as a system of
payment. It allows the
cardholder to pay for goods and
services based on the holder's
promise to pay for them.
Brokerage Activities
 Brings buyers and sellers of
investments together. They
charge a commission on every
transaction.
1. Royal Bank of Canada (RBC)
2. TD Canada Trust (TorontoDominion Bank)
3. Scotiabank (Bank of Nova
Scotia)
4. Bank of Montreal (BMO)
5. Canadian Imperial Bank of
Commerce (CIBC)
 Schedule I banks
 Operational head offices
located in Toronto
 Stable and Conservative
 Services offered by all
five: Retail banking,
wholesale banking,
wealth management,
mutual funds, insurance,
credit cards, brokerage
activities, and have large
international
subsidiaries.
 RBC is Canada’s largest bank
by its assets and market
capitalization.
 One of the largest in the world
based on market capitalization.
(#12 with 99.63$US billion)
 Operates in Canada, the
United States, and 44 other
countries.
 Canada and U.S. operations:
81.8% of total revenue
 Employs 79,000 full and parttime employees.
 TD challenges RBC for largest
bank in Canada, with a slight
advantage in total assets (1.61
$US billion).
 TD is ranked at #13 for
largest bank in the world
based on market capitalization,
with 88.21$US Billion.
 Operates mainly in Canada and
United States:
 Canada: 66.1% of total
revenue
 United States: 26.4% of total
revenue
 Employs 78,748 full and parttime employees.
 Scotiabank operates in the
Americas, in Europe, in the
Middle East, and Asia Pacific.
 It has 4 diversified growth
platforms:
• International Banking (34.8%)
• Canadian Banking (33.4%)
• Global Wealth and Insurances
(19.1%)
• Global Banking and Markets
(17.1%)
 Grew by 21% in 2013 by
acquiring ING Direct.
 Ranked at #24 for largest bank
in the world by market
capitalization with 69.46$US
billion.
 Employs 83,874 full and parttime employees.
 The Bank of Montreal primarily
operates in North America:
• Second largest Canadian bank
by retail branches in North
America.
• 97.1% of total revenue from
Canada and US operations.
 BMO’s main business segments:
• Commercial Banking – Canada
(39%)
• Wealth Management (21.2%)
• BMO Capital Markets (21.1%)
• Commercial and Personal
Banking - US (18.1%)
• Corporate Services (0.6%)
 Ranked at #42 for largest bank in
the world by market
capitalization with 45.56$US
billion.
 Employs 45,631 full and parttime employees.
 CIBC operates in Canada,
Europe, Asia Pacific, and the
Americas, however 86% of its
total revenue are from
Canada.
 CIBC’s main business
segments:
• Retail and Business Banking
(65%)
• Wholesale Banking (17.7%)
• Wealth Management (14.1%)
• Corporate and Other (3.1%)
 Ranked at #54 for largest bank
in the world by market
capitalization with 34.15$US
billion.
 Employs 43,039 full and parttime employees.
Royal Bank of
Canada (RBC)
U.S. retail
banking
TorontoDominion Bank
(TD)
Bank of Nova
Scotia
(Scotiabank)
Bank of Montreal Canadian
(BMO)
Imperial Bank of
Commerce
(CIBC)
Harris Bank
None*
RBC Bank
TD Bank
*Note: Sold in
June 2011
RBC Royal Bank
of Canada and
RBTT
(Caribbean
branches)
RBC Wealth
TD Waterhouse
Management
Private Banking
None
Scotia Private
Client Group
BMO Harris
Private Banking
CIBC Private
Banking
Canadian mutual
funds
RBC Funds and
PH&N Funds
TD Mutual
Funds
Scotia Mutual
Funds
BMO Mutual
Funds and
Guardian Group
of Funds
CIBC Mutual
Funds
U.S. mutual
funds
Canadian
brokerage
Tamarack Funds
TD Waterhouse
ScotiaMcLeod
BMO
CIBC Investor's
InvestorLine and Edge and CIBC
BMO Nesbitt
Wood Gundy
Burns
Other major
international
retail banking
operations
Private banking
RBC Direct
Investing and
RBC Dominion
Securities
Scotiabank
International
FirstCaribbean
Royal Bank of
Canada (RBC)
U.S. brokerage
International
Brokerage
Canadian
insurance
TorontoDominion Bank
(TD)
RBC Wealth
Management
formerly RBC
Dain Rauscher
West Indies
Stockbrokers
Limited
TD Ameritrade
(45%)
RBC Insurance
TD Insurance
Bank of Nova
Scotia
(Scotiabank)
Bank of
Canadian
Montreal (BMO) Imperial Bank of
Commerce
(CIBC)
BMO Harris
Investor
Services
TD Waterhouse
(UK), TD Direct
Investing
International
(LU)
Scotia Insurance BMO Life
Capital markets RBC Capital
TD Securities
Markets
Major custodial RBC Dexia (June
operations
27, 2012, RBC
purchased the
remaining 50%
from Dexia)
Scotia Capital
Precious metals
ScotiaMocatta
BMO Capital
Markets
CIBC Creditor
Insurance, CIBC
Travel
Insurance
CIBC World
Markets
CIBC Mellon
(50%)
 ATB Financial
 Canadian Western Bank
 National Bank of Canada
 Laurentian Bank
 Desjardins Group (technically
not a bank but an alliance of
credit unions)
 HSBC Bank
 Tangerine Bank (formerly
ING)
 Second tier banks
are smaller, less
successful banks
than the main
banks.
Credit Unions
 A credit union is a memberowned financial cooperative,
democratically controlled by
its members, and operated for
holding deposits, providing
credit, and providing other
financial services.
 Many credit unions also
provides services intended to
support community
development.
Trust Companies
 A legal entity that acts as a
fiduciary on behalf of a person
or business for the purpose of
management and the eventual
transfer of assets to a
beneficial party.
 There are often tax
advantages associated with
using trusts to transfer
ownership of assets.
Insurance Companies
 Insurance companies pool risk
by collecting premiums from a
large group of people who
want to protect themselves,
loved ones against particular
losses.
 Insurance helps manage risk
and preserve wealth
Brokerages
 A brokerage acts as an
intermediary between buyers
and sellers to facilitate
securities transactions.
 Commission on every
transaction compensates
brokerage companies.
 A brokerage can either be full
service or discount.
 Big Five
 Financial institutions also
include credit unions and
brokerages as well as others,
not only banks.
 Many regulations to minimize
risks and catastrophic
outcomes.
 Considered one of the safest
banking systems in the
world…
 Now what?