Exteriors of the new Regent Park RBC branch in Toronto, Ont.Kevin Van Paassen
League tables give a sense of who is winning business in the world of investment banking, but they don't tell the whole story. They don't cover every aspect of every firm's business, and they don't reveal what really matters - who's making money.
There's another risk in relying on league tables as an indicator of success. Some firms will ask for credit on a deal that they didn't do much work on, and didn't get paid much for, just to move up in the league table rankings.
So what is the bottom line? Who really brings in the money? By far the biggest by revenue is the capital markets division of Royal Bank of Canada, bringing in almost twice as much revenue as its next-biggest Canadian competitor. It's also got the biggest profit number. But given the lead in revenue, it's not all that much more profitable than some of its key rivals.
For example, Bank of Nova Scotia's capital markets and investment banking operations trailed RBC's by $2.7-billion in revenue, but was only $300-million behind in net income.
The numbers below show the earnings from capital markets at the country's six big banks, which all own securities dealers, and the two largest publicly traded independent firms.
They give a general picture of who's really making money from trading, lending and advising on deals. However, keep in mind that the figures are not directly comparable, as the companies in some cases have different year ends and lump in different things to their capital markets divisions when reporting. The independent firms, Canaccord Financial Inc. and GMP Capital Trust, also only provide pretax income for their capital markets segments, while the bank numbers are net of tax.
Capital markets revenue and profit by company:
Royal Bank of Canada
Revenue: $5.89-billion
Net income: $1.65-billion
Period: year ended Oct. 31
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Bank of Nova Scotia
Revenue: $3.18-billion
Net income: $1.35-billion
Period: year ended Oct. 31
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Bank of Montreal
Revenue: $3.28-billion
Net income: $820-million
Period: year ended Oct. 31
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Toronto-Dominion Bank
Revenue: $2.87-billion
Net income: $866-million
Period: year ended Oct. 31
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National Bank of Canada
Revenue: $1.39-billion
Net income: $471-million
Period: year ended Oct. 31
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Canadian Imperial Bank of Commerce
Revenue: $1.71-billion
Net income: $342-million
Period: year ended Oct. 31
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GMP
Revenue: $346.9-million
Pretax profit: $135.9-million
Period: four quarters ended Sept. 30
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Canaccord
Revenue: $458.4-million
Pretax profit: $92.5-million
Period: four quarters ended Dec. 31