Scotia Capital, 10 November 2011
Event
• The Financial Stability Board released the initial list of 29 global systemically important financial institutions with no Canadian banks on the list, as expected.
Implications
• The fact that Canadian banks are not on the list potentially strengthens their competitive positioning in the capital markets business, with RY best positioned given its broader capital market platform.
• We believe that RY/RBC's competitive positioning continues to improve given its superior credit ratings, not a G-SIFI and not subject to the potential negative impact of ring-fencing in the U.K.
• RY's strong operating platform in the U.K. and solid underwriting market share in Sterling, German, and French bonds should allow the bank to generate significant earnings from RBCCM over the next several years, once the markets return to some sense of normalcy.
Recommendation
• Maintain 1-SO on TD, CM, and RY, with 2-SP on CWB and LB, and 3-SU on BMO and NA. We are restricted on the shares of BNS.
;
Event
• The Financial Stability Board released the initial list of 29 global systemically important financial institutions with no Canadian banks on the list, as expected.
Implications
• The fact that Canadian banks are not on the list potentially strengthens their competitive positioning in the capital markets business, with RY best positioned given its broader capital market platform.
• We believe that RY/RBC's competitive positioning continues to improve given its superior credit ratings, not a G-SIFI and not subject to the potential negative impact of ring-fencing in the U.K.
• RY's strong operating platform in the U.K. and solid underwriting market share in Sterling, German, and French bonds should allow the bank to generate significant earnings from RBCCM over the next several years, once the markets return to some sense of normalcy.
Recommendation
• Maintain 1-SO on TD, CM, and RY, with 2-SP on CWB and LB, and 3-SU on BMO and NA. We are restricted on the shares of BNS.
