Investing in Canadian banks

Toronto Pictures, Images and Photos
If you are looking to invest in a Canadian bank then you have made a good decision. Of the five major Canadian banks (TD Bank, Royal Bank of Canada, BMO, Scotia Bank and CIBC) all of them are likely to be a good investment for the long term. Since the financial crisis in late 2008, the entire world has taken notice at how solid these banks and the Canadian economy are. These banks and the economy have not dropped nearly as much as U.S. and other advanced nations. In fact, many of these banks capitalized on the dramatic drop in price of many U.S. assets and bought them up.

Although these banks are all good compared to other countries’ banks, they are not identical in how they operate. TD Bank for example, is known to be more conservative in the assets they own. They own a lot of U.S. assets. Royal Bank of Canada is the largest Canadian bank and they also own a lot of U.S. assets, although there has been some talk of them looking to sell those assets.

The bank that I see as the most unique from the big five banks is Scotia Bank. Scotia likes to diversify internationally more than the other banks. They have a presence in the Caribbean and in Asia, among other places. They recently announced that they bought a stake in a Chinese bank. By having a presence in developing countries it puts Scotia Bank in a position to have higher growth than the other Canadian banks. This also comes with a little more risk because that’s what happens when you invest in developing countries.

The bank I would invest in would depend on what I am trying to achieve in my portfolio with that investment. This bit of info should give you a better idea which direction to go with your investment in a Canadian bank.