Banking System in Canada

The overall Banking system (Sector) in Canada explained below: Banking in Canada:

Banking in Canada is widely considered the most efficient and safest banking system in the world, ranking as the world's soundest banking system for the past three years according to reports by the World Economic Forum. Released at October 2010, Global Finance magazine put Royal Bank of Canada at number 10 among the world's safest bank and Toronto-Dominion Bank at number 15. According to the Department of Finance, Canadas banks, also called chartered banks, have over 8,000 branches and almost 18,000 automated banking machines (ATMs) across the country. In addition, "Canada has the highest number of ABMs per capita in the world and benefits from the highest penetration levels of electronic channels such as debit cards, Internet banking and telephone banking". Canadian banks are among the top tax payers.

Top Five Canadian Banks: 1) 2) 3) 4) 5) Royal Bank of Canada Toronto Dominion Bank Bank of Nova Scotia Canadian Imperial Bank of Commerce Bank of Montreal

Strong Banking system of Canada :

Global leaders like Royal Bank of Canada and Manulife Financial attest that Canadas financial services sector is one of the most sophisticated in the world. The Financial Services sector continues to attract foreign investment, valued at $54 billion in 2006, and many major international financial services firms (e.g. BNP Paribas, CITCO) maintain business processing near-shore operations in Canada.

Banking system with diversified, well-managed institutions :

Canadas banks are well-diversified organizations; investment banks are anchored by solid deposit-taking institutions. Banks in Canada make lending decisions on a case-by-case basis, extending credit to those who have the capacity to repay their loans.

In a survey by the Strategic Counsel, 81% of respondents believe that prudent lending is a key reason Canadian banks have performed better than their international peers.

Canadas Banks are well-capitalized :

Banks in Canada are among the best capitalized in the world, exceeding Bank for International Settlements norms by significant margins. This allows banks to continue lending and provides a cushion against loan losses, which tend to increase during economic downturns. Banks have been strengthening their capital levels by raising new capital from investors in the marketplace.

Canada has a strong regulatory system :

Canada has a streamlined bank regulatory system, with two primary regulators: the Office of the Superintendent of Financial Institutions (OSFI) for prudential regulation and the Financial Consumer Agency of Canada (FCAC) for consumer matters. In contrast, the United Stated has a complex network of different regulators.

Canadas Bank Act is reviewed and updated every five years to ensure the regulatory structure is keeping pace with changes in the industry.

Canada has been recognized by the International Monetary Fund and others as having a sound regulatory system.

A strong and stable banking system benefits all Canadians :

The health of Canadas banking sector means banks can continue, as always, to contribute substantially to the Canadian economy, including:

$8.3 billion in taxes paid to all levels of government. Contributed approximately 3.4% to Canadas GDP. Employed 267,000 Canadians. Full-time bank employment has increased 21.5% in the past 10 years. Provided financing to 1.6 million small and medium-sized businesses. Provided multi-million dollar support for Canada's charities and not-for-profit community groups.

A strong and stable banking system is at the heart of Canadas economic recovery.

Canadas Banks Considered Safest ones :

Best-in-class financial regulations and strong balance sheets have helped Canadas banks earn global recognition. While banks around the world collapsed and inter-bank transactions froze in the wake of the global financial crisis, not a single Canadian bank required a bailout. Hence, Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shaked world markets.

Royal Bank of Canada is one of the largest Bank operating in Canada Royal Bank of Canada :
RBC is one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. This is one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis.

The bank serves seventeen million clients and has 80,100 employees worldwide. The company corporate headquarters are located in Toronto, Ontario. The bank was founded in 1864 in Halifax, Nova Scotia.

The Top Bank in Canada is the Royal Bank of Canada due to the following reasons:
1. Most Profitable bank. 2. Largest Market Capitalization. 3. Largest Asset base. 4. Consistent long-term performance of stock. 5. Excellent dividend yield and dividend growth rates.

The largest bank is the Royal Bank of Canada (RBC Royal Bank). It's assets total $655 billion with deposits of $398.2 billion.

Balance Sheet of Royal Bank of Canada

Period Ending

Oct 31, 2011

Oct 31, 2010

Oct 31, 2009

Assets
Cash & Cash equivalent Short Term investment Net Recievable Inventory Other Current assets 7,741,000 7,244,000 8,377,000 291,903,000 273,104,000 188,960,000

Total Current Assets

Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets 579,769,000 2,507,000 7,755,000 2,130,000 45,784,000 756,810,000 552,948,000 2,102,000 6,545,000 1,680,000 50,368,000 713,646,000 519,316,000 2,197,000 7,768,000 1,888,000 52,463,000 608,048,000

Deferred Long Term Asset Charges

Total Assets

Liabilities
Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities 46,502,000 447,200,000 40,494,000 407,391,000 369,759,000 -

Total Current Liabilities

Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities 146,711,000 64,651,000 1,954,000 714,820,000 152,815,000 65,171,000 2,217,000 674,654,000 116,737,000 78,076,000 1,923,000 572,492,000

Stockholders' Equity
Misc Stocks Options Warrants Redeemable Preferred Stock 714,000 1,295,000 -

Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity

4,846,000 14,112,000 24,447,000 8,000 213,000 (1,636,000) 41,990,000 32,105,000

4,730,000 13,147,000 22,313,000 (80,000) 232,000 (2,065,000) 38,277,000 30,052,000

4,468,000 12,138,000 19,110,000 (90,000) 228,000 (1,593,000) 34,261,000 24,605,000

Total Stockholder Equity

Net Tangible Assets

Currency in USD.

Income statement of Royal bank of Canada

Period Ending Total Revenue
Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Admin Non Recurring Others Total operating expense 10,685,000 1,465,000 9,319,000 1,651,000 9,284,000 2,377,000 -

Oct 31, 2011

35,993,000 5,278,000 -

Oct 31, 2010

32,911,000 4,832,000 -

Oct 31, 2009

32,499,000 5,965,000 -

Operating Income or Loss Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest And Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest

11,800,000 3,099,000 8,701,000 1,901,000 (105,000)

10,140,000 2,448,000 7,692,000 1,961,000 (97,000)

9,225,000 1,988,000 7,237,000 1,871,000 (93,000)

Net Income From Continuing Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income

6,695,000

5,633,000

5,274,000

(1,810,000) 4,885,000

(500,000) 5,133,000 (254,000) 4 ,879,000

(1,692,000) 3,582,000 (216,000) 3,365,000

Preferred Stock And Other Adjustments (260,000) Net Income Applicable To Common Shares 4,625,000 Currency in USD.

Royal Bank of Canada profit beats estimates :

On a continuing operations basis, Canada's largest bank earned C$1.63 billion ($1.60 billion) or C$1.09 a share, in the quarter ended October 31. That compared with a year-before profit of C$1.37 million, or 91 Canadian cents a share.

(Credit Management) Topic : Banking System of Canada

Final Project MBA( E-6)

Submitted to:
Prof : Kamran Hassan

Submitted by:
Rana Kamran: 3110 M. Usman 3081

Amir Bhatti: 3108 Kashif Raza: 3114