Loan Articles

The banking system in Canada has been judged to be the best and safest in the world.

No bank has failed in Canada since 1923, and not a single Canadian bank failed during the Great Depression. One of the reasons for this safety has been that as well as a stable and consistent regulatory framework, there is also a wide variety of banks in Canada.

The variety of Canadian banks

Canada boasts a very strong credit union sector, particularly in Quebec where its largest financial institution is a federation of credit unions. It has a number of regionally focussed banks with local expertise. As an open financial system Canada has a number of banks headquartered overseas but with subsidiaries and branches based in Canada, which include some big players in the mortgage and savings market such as ING and HSBC. There are also a number of medium sized banks with nationwide coverage, such as National Bank of Canada. At the apex there are five banks that have international presences, and are commonly known as the “Big Five”.

The Big Five Banks

Royal Bank of Canada (RBC)
Toronto-Dominion Bank (TD)
Bank of Nova Scotia (Scotiabank)
Bank of Montreal (BMO)
Canadian Imperial Bank of Commerce (CIBC)

They are all headquartered in Canada, and have a proud history there, as well as being quoted on the Toronto Stock Exchange. However, they are should be seen as international banks with rather large Canadian operations.

Royal Bank of Canada

The Royal Bank of Canada (RBC) is the largest bank in Canada, in fact it is the largest financial institution in Canada. It has 80,000 employees and 17 million clients throughout the world. It was founded in Halifax, Nova Scotia in 1864 as the Merchants Bank and was renamed the Royal Bank of Canada in 1901 in Queen Victoria’s jubilee.

The Royal Bank of Canada has long had a presence in the Caribbean since 1882. Although its market leading role is mainly in the English speaking Canada, it at one time had the largest bank branch network in Cuba. It also has significant operations in Latin America and the southern United States. It has operations in 50 countries. It is the largest Canadian company by revenue and is listed at number 55 in Forbes listing of the world’s largest companies.

Toronto-Dominion Bank

The second largest bank, at least by deposits, is Toronto-Dominion Bank which is commonly known as TD. Its headquarters are in Toronto and it is a 1955 merger of the Bank of Toronto (founded in 1855) and Dominion Bank (founded in 1869). It has 74,000 employees and has been listed as one of the top 100 places to work in Canada.

It's roots are as a farmers’ bank but it has recently expanded quite aggressively into stock broking with the purchase of Waterhouse securities and Canada Trust in the 1990s. It’s international operations are largely though its broking arm TD Waterhouse along with a branch network in the northeast of the United States.


The Bank of Nova Scotia, more commonly known as Scotiabank, was founded in Halifax, Nova Scotia in 1832, although its headquarters are in Toronto. It is the third largest bank in Canada with 69,000 employees worldwide. In its early years were based in the Maritime provinces, it expanded earlier than most Canadian banks into the United States, setting up a branch in Minneapolis in 1885. It has always had a strong merchant and investment banking arm, being set up to finance the trans-Atlantic trade. Of all the big five banks it is the most international with 2000 branches in 50 countries.

Bank of Montreal

The Bank of Montreal is the oldest bank in Canada, founded in 1817. It is the fourth largest bank in Canada. It has 36,000 employees and 900 branches. Despite its name its headquartered in Toronto (although its legal head office is still in Montreal). Through the Harris bank it has an extensive branch network in the mid-west of the United States, headquartered in Chicago. In 2009 it bought out AIG’s life insurance operations in Canada after AIG’s collapse.

Canadian Imperial Bank of Commerce

The Canadian Imperial Bank of Commerce (CIBC) is the fifth largest bank in Canada. It has 42000 employees and 1047 branches. It was a very large presence in Canada during the early twentieth Century and so its international presence follows the commonwealth more than the other Canadian banks. It has a strong presence in Hong Kong and until recently its largest foreign shareholder was a billionaire based in Hong Kong, Li Ka Shing. Their presence in the United States has been troubled due to a heavy involvement in Enron.