BEST BANK
Scotiabank
BEST DEBT HOUSE
RBC Capital Markets
BEST EQUITY HOUSE
RBC Capital Markets
BEST M&A HOUSE
Merrill Lynch
Scotiabank is not the biggest full-service Canadian bank, but of the primary contenders for this award it is certainly the most profitable. Its net income for the 2004 financial year was US$2.57 billion; RBC’s was US$2.45 billion. Return on average assets at Scotiabank for the full year was also better, at 1.4, compared with 0.73. In the first quarter of 2005, deposit and payment services revenue was up C$7 million (US$5.7 million), or 4%, and card revenues were up C$3 million, or 5%, combined with a marked improvement in asset quality. Its strong retail banking franchise is complemented by healthy commercial banking and investment banking activity. For example, Scotia Capital is the number two provider of syndicated loans in the country and a top-four player in Canada’s M&A market.
RBC is dominant across all areas of Canadian debt capital markets. In a record year for Canadian issuance, it is the top underwriter for all Canadian dollar bonds issued globally over this period, with a 26.3% market share, working on 147 deals, twice the amount of nearest rival TD Securities. But it is also the top-ranked underwriter for domestic government bond issues, domestic corporates and for Canadian dollar Eurobonds, another rapidly growing market. It is the top arranger of syndicated loans for Canadian borrowers, one of the top traders by volume of Canadian debt and has a strong credit research and fixed-income strategy group.
RBC Capital Markets has taken away the top spot for Canadian equities from CIBC, which had held it for three years. RBC had a 21.3% market share over the May 2004 to April 2005 period, significantly more than Merrill Lynch in second place. RBC was bookrunner with Merrill and CIBC on the Canadian government’s sale of its remaining interest in Petro-Canada for C$3.2 billion, the largest equity offering in Canadian history. It was also joint bookrunner on Verizon’s sales of its remaining stake in Telus for C$2.2 billion, the largest ever equity deal for a Canadian telecom company. RBC is also one of the top four traders on the Toronto Stock Exchange and has top-ranked equity analysts in several Canadian sectors.
Whether you look at completed or announced deals, Merrill Lynch is the strongest M&A house in Canada. This is partly because it is the only non-Canadian bank to have retained a full investment banking business in Toronto. Merrill had a 11.96% market share of completed deals over this period, advising on 14 transactions, beating its nearest rival Goldman Sachs. One of these was Merrill’s work as adviser to Canada’s Wheaton River Minerals on its US$2 billion acquisition by Canadian gold producer, Goldcorp. For announced deals from the beginning of May last year to the end of April this year, the bank had a 14.6% market share, working on 14 deals.
