Gallery
| BIG WINNER | rnTD Bank rn FINANCE | rn
On Sept. 2, the bank’s market capitalization briefly exceeded that of rival RBC Financial Group, traditionally regarded as Canada’s biggest bank. The last time TD managed that feat was more than a decade ago, for three days in October 2000.
rnrnOn this occasion, TD’s stock surged after it reported stronger-than-anticipated third-quarter earnings. Citing strong performance by the company’s retail and commercial operations, CEO Ed Clark (above) called those results “our second best quarter on record,” and predicted 2011 will be “a record year for TD.” The bank also raised its dividend for the second time this year. Several analysts hiked their price targets, and investors responded with enthusiasm, driving TD shares to an intra-day high of just below $80. TD’s market cap thus moved above $71 billion, temporarily eclipsing RBC’s by more than $200 million.
rnrnThat moment, however fleeting, suggests the diverging fortunes of the two banks. Both are struggling to grow, but of late TD has done rather better at it. In just six years, TD muscled into the ultra-competitive U.S. financial services market through blockbuster acquisitions, including Banknorth in 2005 and Commerce Bancorp in 2007. Now the 10th-largest bank, it operates more branches in the U.S. (1,300) than it does in Canada (1,100). And TD aims to raise its profile in New York City, home to a deposit base roughly equivalent to all of Canada.
rnrnRBC, in contrast, beat a humiliating retreat from the U.S. earlier this year. In June, it sold its unwieldy assortment of retail branches scattered across the southeastern U.S. to PNC Financial Services for US$3.6 billion. RBC is reportedly on the hunt for foreign acquisition targets, but seems to be in no hurry. “We’re comfortable having excess capital and taking less risk than others,” CEO Gordon Nixon told conference attendees recently. RBC’s wealth management and capital markets divisions remain active south of the border, but the lack of clear direction has investors pondering RBC’s growth prospects.
rnTD Bank
| BIG WINNER | TD Bank FINANCE |
On Sept. 2, the bank’s market capitalization briefly exceeded that of rival RBC Financial Group, traditionally regarded as Canada’s biggest bank. The last time TD managed that feat was more than a decade ago, for three days in October 2000.
On this occasion, TD’s stock surged after it reported stronger-than-anticipated third-quarter earnings. Citing strong performance by the company’s retail and commercial operations, CEO Ed Clark (above) called those results “our second best quarter on record,” and predicted 2011 will be “a record year for TD.” The bank also raised its dividend for the second time this year. Several analysts hiked their price targets, and investors responded with enthusiasm, driving TD shares to an intra-day high of just below $80. TD’s market cap thus moved above $71 billion, temporarily eclipsing RBC’s by more than $200 million.
That moment, however fleeting, suggests the diverging fortunes of the two banks. Both are struggling to grow, but of late TD has done rather better at it. In just six years, TD muscled into the ultra-competitive U.S. financial services market through blockbuster acquisitions, including Banknorth in 2005 and Commerce Bancorp in 2007. Now the 10th-largest bank, it operates more branches in the U.S. (1,300) than it does in Canada (1,100). And TD aims to raise its profile in New York City, home to a deposit base roughly equivalent to all of Canada.
RBC, in contrast, beat a humiliating retreat from the U.S. earlier this year. In June, it sold its unwieldy assortment of retail branches scattered across the southeastern U.S. to PNC Financial Services for US$3.6 billion. RBC is reportedly on the hunt for foreign acquisition targets, but seems to be in no hurry. “We’re comfortable having excess capital and taking less risk than others,” CEO Gordon Nixon told conference attendees recently. RBC’s wealth management and capital markets divisions remain active south of the border, but the lack of clear direction has investors pondering RBC’s growth prospects.
