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The Green Sheet Online Edition

July 28, 2008 • Issue 08:07:02


Payments in the Great White North

The Canadian payments industry is hard to quantify because not much statistical information about the industry has been published. However, The Green Sheet was able to track down some illuminating data dating to 2003. As you will see, the Canadian market is significantly different than the one industry professionals enjoy in the United States.

Under the Constitution of Canada, the Canadian government is solely responsible for regulation of the banking system.

Canadian banking industry is dominated by six banks

(asset size as of 2003, $ millions)

RBC Financial Group = $403,185
Scotiabank = $285,892
Canadian Imperial Bank of Commerce = $277,147
TD Bank Financial Group = $273,532
BMO Financial Group = $256,494
Sun Life Financial Inc = $163,295

More facts detail the control that banks have over the financial services industry in Canada, as of 2003:

  • Banks accounted for the largest portion of the Canadian financial services sector, reporting $1.257 billion in domestic assets, or over 55 percent of the sector's total assets.

  • Banks make 48 percent of their revenue from net interest income.

  • Banks recorded a return on equity of 14.6 percent.

  • The financial services sector represented 6 percent of Canada's gross domestic product.

  • Canada's six leading banks generated 33 percent of their net income from foreign sources, especially from the United States, Latin America, the Caribbean and Asia.

  • The six largest banks had more than 90 percent of total bank assets and about 76 percent of the total assets of the deposit-taking sector.

  • Canadian banks accounted for 93 percent of domestic market share, while foreign banks made up the remaining seven percent.

  • There are 69 total banks: 18 domestic, 29 foreign bank subsidiaries and 22 foreign bank branches.

  • Canada has close to 9,000 bank branches and about 16,500 automated teller machines.

  • There are 600 credit unions and almost 700 caisses populaires (cooperative, member-owned financial institutions, mostly found in the Province of Quebec), with almost 3,600 locations and more than 4,500 ATMs.

  • Banks own three of the top 10 mutual fund companies in Canada; they also own insurance companies and all of the large securities dealers.

Source: The Department of Finance Canada
end of article

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