Year-end Report on Chartered Banks

This month, we look at the chartered bank market share winners and losers for 2018.

Chartered Banks as a whole have lost 32BP of total personal share in 2018.  Credit Unions and other Non-Banks have been the beneficiaries of the share decline.  This is reflective of larger banks increasing focus on margin improvement and risk management as interest rates rise and growth slows.

The largest share decline has been in demand deposit share.  This is reflective on an increased focus on margin improvement. While the prime rate has increased 50Bp over the last 12 months, high rate savings rates have only increased an average of 35 BP.  

Banks have defended their share of deposits overall using term deposits.  Banks turn to the broker deposit market for growth needs at the margin. This enables them to meet funding requirements without repricing their branch portfolio.

Banks lost 23BP if mortgage share mainly to credit unions.  Banks were faster to raise mortgage rates when government bond rates increased.   Some larger credit unions are aggressively competitive with rates through their branch channel and they also increased participation from the broker channel.

Banks lost 42BP of personal lending share perhaps reflective of less demand for home equity lines of credit as rates increased with prime.

Largest Banks

TDCT once again is the largest retail bank in Canada with $562B in total personal deposits and loans. HSBC was the fastest growing of the big 8 growing 7.9% over the last 12 months.  The best average growth over the past 5 years is shared by CIBC and National Bank.

Fastest Growing Banks

The fastest growing banks are the newest.  Most impressive is Home Bank.  Home Capital books their Oaken Financial deposits to Home Bank.  Oaken Financial offers preferred rates on high rate savings accounts and GICs through a direct-to-consumer platform.  Mortgage loans are sourced from Home Trust.  The Home Bank deposit portfolio is $2.4B and grew 59% over the last 12 months.

Home Equity Bank growth at 19.1% CAGR and 27.8% over the last 12 months is notable as it reflects growing interest in reverse mortgages. Equitable Bank is the largest of the fast-growing banks with $33B in total deposits and loans. Active participation in the deposit and mortgage broker market together with a strong direct to consumer – EQ Bank – capability are the main drivers of growth. 

Slowest Growing Large Banks

The slowest growing banks with total deposits and loan >$1B is led by Bridgewater Bank perhaps reflecting reduced mortgage broker participation.  B2B Bank / Laurentian both experienced significant declines this year perhaps reflecting risk concerns in their mortgage portfolio and a more conservative pricing approach for high rate savings accounts.

Zag Bank has decided to wind up as parent Desjardins focuses on wealth and insurance.


Major banks are focused on margin improvement and risk management in the current environment opening the door to newer direct players who are focused on diversifying funding and expanding market reach.