Bloomberg Markets recently released its second annual ranking of the world’s strongest banks, and Canadian banks took 4 spots from the top 10. CIBC ranked highest in the 3rd spot, followed closely by TD (at 4), National Bank (at 5), and Royal Bank (at 6). Scotiabank ranked 18th and Bank of Montreal was 22nd. Singapore’s OCBC was ranked number 1 and BOC Hong Kong Holding Ltd. was ranked number two. No U.S. banks were ranked in the top 10.
These are incredible results for a country with only 35 million people with only 6 publicly traded national banks. Safe or too safe? While there’s a lot of nationalistic pride associated such stellar results, one can’t help but wonder what opportunities were passed by in the name of safety and strength. However you look at it though, it’s clear that there’s no concern about the solvency of our banks.
One of the largest assets of the Canadian banks are mortgages, and from Bloomberg’s perspective there’s little concern about the risk inherent in those loans. The results of this report contrast strongly against the concern that the Office of the Superintendent of Financial Institutions (OSFI) has with the lending practices of Canada’s banks. We’ve just been through the worst recession since the great depression and our country’s banks dominate among the strongest banks of the world. Tightening now would be a little like shutting the barn door after the horses have left. Hopefully OSFI will get the message and back off.