Having worked at Canada’s biggest bank for 15 years, it’s fair to say that I was pretty sensitive while employed there to criticism of customers and even friends that “the Canadian Banks literally take no risk and aren’t nearly as aggressive (code for smart) as their U.S. counterparts”.
Well today I think it’s easy to see that the shareholders of Canadian Banks have been well served by the slow and steady strategies of their Boards and CEOs - no one “bet the bank”. The same cannot be said of the financial services companies south of the border - the carnage is everywhere.
Just look at the drop in share price from a year ago of these household names:
BofA -50%
Citigroup -68%
Goldman Sachs -45%
Merrill Lynch - 78%
Compare these declines to the members of Canadian oligarchy:
BMO -28%
BNS - 13%
CIBC -40%
RBC -16%
TD -21%
Now this isn’t to say that the Canadian Banks haven’t run into their own sharp objects; as we know at least 2 of them have over the past few years on fairly consistent basis. But even with some mis-steps, their collective strategy to make selective acquisitions at home and abroad and to invest and support their domestic retail banking franchise looks to be a winner - not exciting but a winner. It’s not often Canadian Bank’s can feel superior to their U.S. colleagues but it’s clear today slow and steady does wins the race.
FMU
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