Year End Look at Bank Market Share results

Year-end look at banks.

October 31st represents the fiscal year end for most banks, so it is timely to look at share performance over the last 12 months.

This table lists balances, share of the national personal market and changes in share over 3, 12- and 60-month periods for the 16 largest financial services providers in Canada.

  • Equitable Bank continues to lead in market share growth in both the last 12 (11.7% growth) and 60-month (74.6%) periods. Equitable participates in both the direct-to- consumer and broker channels with pricing at or near the top of the market.
  • Home Trust is gradually restoring market share lost during the 2017 run on deposits. The share decline from their peak share represents about $6B. Oaken Financial, their direct- to-consumer channel is a major driver of growth with aggressive pricing and consistent, prominent advertising. Growth in loans is quite modest as they appear to be cautiously rebuilding their mortgage broker channel relationships.
  • Manulife Bank has grown their total personal deposit base by over 12% since they launched their new banking service package. The package offers:
    • Everyday Banking Account with unlimited transactions for $10 per month, free if you save $100 or more in any month.
    • High Rate Savings modestly priced at 1.20%
    • No-fee cash back VISA credit card
    • Travel disruption insurance
    • 1 year of Amazon Prime (if you make 10 or more purchases in each of the first two full months).
  • BMO and Royal lead the big 5 in market share growth with Term deposit growth a majordriver for BMO (and modest share growth in personal loans and mortgages) while RBCgrowth is mainly driven by mortgage share.
  • Tangerine continues to lose mortgage share (10.2%) over the last 12 months after theirshare of mortgages declined from a peak of 2.81% (Nov’11) to .34% (Sept 2013) following their exit from the mortgage broker channel. This decline represents almost $40B in balances compared to where they would be if they had maintained share. Growth now is driven by term deposits (22.3% growth over last 12 months) and personal loans – mainly credit card. Heavy advertising at Raptors telecasts may be starting to drive share of customers.
  • At the other end of the spectrum, Laurentian Bank has lost 11.3% of their market share (roughly $5.5B) over the last 12 months. Half of the value of the share losses come from B2B Bank, their direct bank serving the broker market. All products have been losing share since November 2017. Quality problems may have been the impetus behind the share declines, however, there appears to be no end in sight.
  • Most of the share growth in the bank and trust area appears to be in the direct banking arena and broker channels with players like EQ Bank, Oaken Financial, Manulife Bank, Alterna Bank and Motusbank (Meridian Credit Union) the beneficiaries. The year has seen little product innovation among the major banks and virtual silence in advertising and promotion compared to previous years. Banks are focusing on technology investments that drive productivity improvements and customer service perhaps at the expense of product and service innovation.