Canadian banks seek to fill U.S. "vacuum"

With big U.S. and European lenders retrenching amid new regulations and tighter capital requirements, Canadian banks have been expanding south of the border whether by acquisition, boosting existing networks, or hiring newly freed-up executives.

"There has been a vacuum created in the U.S.,” says Dick Bove, "And the Canadians are taking advantage, RBC (RY -0.1%) more so than the others.” RBC - which was forced to sell its U.S. retail network following the financial panic - has turned to investment banking, and has increased its share of the U.S. investment bank fee pool by 3% over past 3.5 years, and now ranks 10th in U.S. equity capital markets underwriting and 11th in high-yield; last month it poached two senior bankers from Citigroup.

The move by Canadian banks also comes as growth slows at home amid government efforts to slow credit growth to cool a steamy property market.

Others of interest include: TD Bank, BMO, Scotiabank (NYSE:BNS), and CIBC (NYSE:CM).

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Comments (7)
  • puertoescondidan
    , contributor
    Comments (90) | Send Message
    Although it is gratifying (for me as a Canadian and shareholder of one Canadian bank with major operations in the US) to see the expansion of Canadian banks in the US, I do have some concerns about the increased hiring of "seasoned" US bankers to run various operations of the Canadian banks, be it in the US or back home in Canada. These "seasoned" US bankers could be the same one who got the US banks in trouble. Are we putting the foxes in charge of the Canadian hen-house? Canadian banks had a (risk) culture that was quite unique and got them to where they are. Are we sacrificing this culture with the hiring of so many bankers with failed and still failing US experiences?
    23 Jul 2014, 12:47 PM Reply Like
  • neal007
    , contributor
    Comments (7) | Send Message
    I have owned Canadian banks and no US banks for the last 6 years for the simple reason that they are beyond the reach of Dodd, Frank, and Obama. It has proven to be a profitable strategy.
    23 Jul 2014, 01:19 PM Reply Like
  • Chazuu
    , contributor
    Comments (290) | Send Message
    I wouldn't worry too much. Most of the U. S. bankers who were downsized were not the top executives who caused the trouble. The mid and lower level people just followed the policies set in the exec. suite. They will be very happy to follow the lower risk strategies of their Canadian bosses I think.
    I am a U. S. citizen, but have been long RY and BMO for a several years. TD and BNS are OK too, but I like the other two slightly better.
    23 Jul 2014, 01:20 PM Reply Like
  • User 26792943
    , contributor
    Comments (3) | Send Message
    I was considering taking profits on my holdings of the 6 major Canadian Banks, but have decided there is still room to grow, besides I like the dividends and they are solid.
    23 Jul 2014, 03:00 PM Reply Like
  • User 91095921
    , contributor
    Comment (1) | Send Message
    I'm in the same boat here. I think they are close to be fully valued, but each dividend increase pushes the limit....nice problem to have.
    23 Jul 2014, 09:46 PM Reply Like
  • Chazuu
    , contributor
    Comments (290) | Send Message
    Big U S banks were following high risk strategies long before Obama. Regs. were loosened under Clinton and the big banksters went wild. Community and regional banks not so much.
    Dodd Frank is necessary to rein in the big guys while unfortunately, smaller banks are struggling to comply with the additional regulations.
    Canadian bankers and bank regulators have acted more responsibly.
    23 Jul 2014, 03:03 PM Reply Like
  • anthonymaw
    , contributor
    Comments (156) | Send Message
    IMHO those "seasoned" American bankers should only be hired to clean the toilets at Canadian banks....Canada does not need any of their banking management philosophies and culture where they collecteg millions in bonuses while bringing the United States Capitalism driven economy to it's knees and collectively causing US citizens an estimated 16 trillion in life-savings losses.
    23 Jul 2014, 05:27 PM Reply Like
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