The banking system in Canada is considered to be one of the safest in the world. Below is our analysis of each of Canada's three biggest banks, which are the Royal Bank of Canada, the Toronto-Dominion Bank, and the Bank of Nova Scotia.
Key Takeaways
- Banks established in Canada operate under charter and many have operations in the United States as well.
- The largest Canadian banks are known as the "Big Five," with the Royal Bank of Canada (RBC) being the largest.
- The top three are rounded out by Toronto-Dominion (TD) and the Bank of Nova Scotia (Scotiabank) in second and third, respectively.
Canadian Banks
Known also as chartered banks, Canada's banks have more than 5,000 branches and nearly 70,000 automated banking machines as of October 2022. Initially, banking in Canada operated via colonial overseas operations, but it transitioned to a local banking system in 1817 when the Bank of Montreal was founded. Other banks quickly followed. The Canadian dollar officially took form in 1871 and supplanted individual bank currencies. In the 1980s and 1990s, Canada's largest banks acquired nearly all trust and brokerage companies and began their own insurance and mutual fund businesses as well.
In regular commerce, Canadian banks are typically referred to in two categories: the five largest banks, known as the Big Five banks, and then a group of smaller, second-tier banks. In addition to the Royal Bank of Canada, the Toronto-Dominion Bank, and the Bank of Nova Scotia, the Big Five also includes the Bank of Montreal (NMO) and the Canadian Imperial Bank of Commerce (CIBC).
Royal Bank of Canada
The Royal Bank of Canada, commonly referred to as the RBC, is Canada’s largest financial institution, with a market capitalization of over CA$174 billion as of October 2023. Worldwide, the bank has over 94,000 employees and serves approximately 17 million clients.
Founded in 1864 in Halifax, Nova Scotia, the company’s head office is in Montreal, Quebec and its corporate headquarters are in Toronto. In Canada, the bank is branded RBC Royal Bank or RBC Banque Royale in French.
There are approximately 1,210 RBC branches in Canada. In the United States, RBC Bank’s retail banking subsidiary City National Bank operates about 70 branches in 10 states. RBC has a worldwide investment and corporate banking subsidiary, RBC Capital Markets, and an investment brokerage firm known as RBC Dominion Securities.
Toronto-Dominion Bank
The Toronto-Dominion Bank, commonly known by the initials TD, is headquartered in Toronto and is a multinational financial and banking services corporation. This bank was formed in 1955 from the merger of the Bank of Toronto, established in 1855, and the Dominion Bank, established in 1869. Based on its CA$139 billion market capitalization as of December 2023, the TD Bank Group is among the top 10 banks located in North America.
According to a report by S&P Global in April 2023, Toronto-Dominion is ranked the 24th largest bank in the world. Among the bank and its subsidiaries, more than 90,000 individuals are employed and over 27 million clients are served worldwide. The bank operates as TD Canada Trust in Canada and serves more than 15 million clients at 1,062 branches. In the U.S., the bank operates as TD Bank, and it was created through the merger of TD Bank North and Commerce Bank. The U.S. subsidiary has almost 1,177 branches and serves over 10 million customers.
Bank of Nova Scotia
The Bank of Nova Scotia (BNS), more commonly known as Scotiabank, is Canada’s third-largest bank in terms of total assets. It has a market capitalization of over CA$68.2 billion in 2023. Operating in 40 countries around the world, the bank serves more than 23 million customers and provides a vast range of services and products including commercial and personal banking, corporate and investment banking, and wealth management. Scotiabank shares are traded on both the Toronto and New York stock exchanges.
The bank was incorporated in 1832 in Halifax, later moving its executive offices to Toronto in 1900. Scotiabank has touted itself as being Canada's most international bank because of its acquisitions in Latin America, the Caribbean, India, and Europe. It is a member of the London Bullion Market Association.
