The banking industry in Canada is an essential contributor to the country’s economy and a major employment sector. Banks are also an integral part of our everyday lives, with 99% of Canadians having an account with a financial institution. We trust the banks to keep our money safe, to purchase on credit, and to lend us money towards large purchases such as our homes.
But how much do we know about these financial institutions we have accounts with? For example, did you know that the Canadian banking industry is dominated by five banking giants or that most Canadians are shareholders in Canadian banks?
In this article, we explore Canadian banking industry statistics, answering not just the above, but many more key questions about the industry. So continue reading to find out key statistics about banks in Canada.
Banking Industry Statistics for Canadians
- The top five Canadian banks hold over $6 trillion in assets.
- Banks contribute around 3.8% of Canada’s GDP.
- 74% of all household debt is on mortgages.
- The number of bank branches has been in decline since 2014.
- There are around 70,000 ABMs in Canada.
- In 2020, Canadian banks paid $22.6 billion in dividends to the shareholders.
- Canadian banks employ 280,000 people in Canada and 116.000 in other countries.
- Almost 90% of Canadians have used Internet banking and 65% use mobile banking apps.
- Close to 90% of Canadians believe their banks will keep their personal data safe and provide safe digital banking services.
The Largest Banks in Canada
Five banks dominate the Canadian banking industry: Toronto-Dominion Bank, Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia, and Canadian Imperial Bank of Commerce.
Royal Bank of Canada and Toronto-Dominion Bank are also among the largest banks worldwide in terms of their market capitalization. Below, you will find the total assets held by the top five banks in 2021.
- Toronto-Dominion Bank: $1.73 trillion
- Royal Bank of Canada: $1.71 trillion
- Bank of Nova Scotia: $1.18 trillion
- Bank of Montreal: $988 billion
- Canadian Imperial Bank of Commerce $838 billion
The next bank on the list is the National Bank of Canada. However, with $370 billion in April 2022, it is a considerably small player compared to the top five Canadian banks. However, including the National Bank of Canada, the top six banks account for over 90% of the total assets held by Canadian banks.
GDP and Taxes
According to the Canadian Bankers Association, banks in Canada contribute over $68 billion to the country’s GDP. That is approximately 3.8%. When combined with the insurance sector, the finance and insurance industry makes the fourth largest contribution to the GDP.
The largest contribution comes from the real estate industry. It is followed by the manufacturing and construction industries. The banking industry, especially the largest banks, also pays a significant amount of taxes every year.
Based on the statistics from the Canadian Bankers Association, in 2020, the six largest banks in Canada paid $12.5 billion in taxes. However, banks could see their tax bills increase in forthcoming years with the three percent surtax on profits over $1 billion, according to the Financial Post.
Canadians as Shareholders
Most Canadians are shareholders in Canadian banks, which may come as a surprise to many people. Holding shares in a bank doesn’t always mean owning shares directly. It can also be an indirect form through a pension or mutual funds, for example, the Canada Pension Plan. All shareholders receive dividends, and in 2020, the banks in Canada paid an estimated $22.6 billion in dividends.
Lending by Banks in Canada
In 2020, Canadian banks lent Canadians $2.3 trillion in total. The majority of these loans were mortgages, accounting for $1.7 trillion of the total. This is around 74% of all household debt in Canada. Despite the challenges posed by COVID-19, most Canadians are keeping up to date with their mortgage, with only 0.15% being in arrears in April 2020. Personal loans accounted for $182 billion and credit card debt for $101 billion.
Most Canadians have mortgages with the largest banks, with the six biggest banks holding 73% of all residential mortgage debt. This domination comes with potential risks. For example, if one of the big banks had to sell mortgages at a discount, the other would likely have to do the same, devaluing all mortgages. This, in turn, could lead to a credit crunch and a slower housing market. However, some measures have been introduced by the government to reduce the risks, such as the requirement to hold more capital.
Lending to Small Businesses
Canadian banks lend money to small businesses as well as personal account holders. Around 3 million small to medium-sized businesses are served by Canadian banks across the country.
In 2021, Canadian banks authorized approximately $1.52 trillion in credit to businesses in Canada. $269.1 billion of that was for small to medium-sized businesses. 90.8% of loan applications by small and medium-sized companies were approved.
The Number of Bank Branches Has Decreased in Canada
Following the shift towards digital banking, the number of physical branches has been declining in Canada since 2014. In 2018, there were 5,890 branches in Canada. Their number had reduced to 5,783 by 2021. At the same time, the percentage of Canadians still using in-person banking services fell from 67% to 57%.
Use of Automated Banking Machines in Canada
While fewer people are using in-person banking services in Canada, many are still using automated banking machines (ABMs). There are approximately 70,000 ABMs in Canada, 18,515 of which are owned by banks. 92% of Canadians who have used ABMs to carry out banking activities say they are satisfied with their experiences.
In 2020, there were 476 million transactions carried out using ABMs owned by banks in Canada. In comparison, the six biggest banks recorded 784 million mobile banking transactions and 598 million internet banking transactions. These figures are not surprising since 16% of Canadians expect to decrease their use of ABMs in favour of digital banking options.
Canadian Banks as Employers
Canadian banks are important for the Canadian employment figures since between them, they employ over 280,000 people in Canada and 88.9% of these jobs were full-time positions. In addition, there are 116,000 employees working for Canadian banks based in other countries. In 2020, Canadian banks paid approximately $30 billion in salaries and benefits.
An Equal Opportunities Employer
Since the implementation of the Employment Equity Act in 1995, promoting equal opportunities in the workplace, the number of women and visible minorities working in the banking industry has steadily increased.
Statistics from 2020 show that 55.1% of bank employees are women. However, among the senior managers, only 38.5% are women. The picture is more equal among middle managers with 48.5% being female.
People from visible minorities hold 21.2% of senior management roles and 37.2% of middle management positions. 6.3% of the workforce identify as having a disability and only around 3,300 were from Indigenous communities.
Support During COVID-19
During the COVID-19 pandemic, Canadian banks supported both personal and business account holders by waiving their account fees.
Support for Small Businesses
Between March 2020 and February 2021, the six largest banks waived approximately $4.9 million in account fees for small businesses.
Banks also worked together with the Business Development Bank of Canada and the government to support small businesses. This included the Emergency Business Account program that offered small businesses over 895,000 loans, which amounted to more than $48.9 billion.
Support for Individuals
During the same period, the six largest banks also waived fees for personal account holders worth $112 million. They also supported individuals by offering loan term extensions and deferrals. Around 800,000 Canadians benefited from deferrals, which amounted to $5.5 billion.
In addition, banks implemented lower minimum payments on credit cards and some even lowered their interest rates for those who could not keep up their payments.
Canadian Banking Trends and Opinions
Considering that 99% of Canadians have a bank account, and having one is a must in today’s society, how do Canadians feel about their banks and how is the banking world changing in Canada following new technologies?
New Technologies Have Made Banking More Convenient
90% of Canadians say that banking is more convenient with new technologies. According to findings by the Canadian Bankers Association, 89% of Canadians had used Internet banking within the last year and it was the preferred banking method for 49% of account holders.
Despite the increased adoption of digital banking services, 57% of Canadians still use an actual bank branch at least once per year and 90% said they were satisfied with their in-person banking experiences. Canadians were most likely to go into a branch to withdraw or deposit cash, speak to a member of staff about an issue, or open or close an account.
As well as almost 90% having used internet banking, most Canadians have also used mobile banking apps within the last year. 65% of Canadians have used mobile banking apps and they are especially popular among younger generations, such as the Millennials and Generation Z.
Most Canadians Have Positive Online and Mobile Banking Experiences
Canadian bank account holders are satisfied with the Internet and mobile banking experiences they have had. 93% are satisfied with their internet banking experiences and 80% with their mobile banking experiences.
Most Canadians Trust Their Banks
Canadians have a lot of faith in the financial institutions they use. 86% of Canadians believe that their banks provide safe digital banking services. In addition, 87% say they believe banks will protect their personal data.
It seems that this trust is not misplaced, since Canadian banks have been taking measures and investing in secure digital banking services. The six biggest banks have spent approximately $100 billion on technology and security over the last ten years.
The banking industry in Canada is a key part of the economy, paying billions in taxes every year and contributing almost 4% to Canada’s GDP. Over 90% of all assets held by Canadian banks are held by the six largest banks.
As people’s banking habits have changed and more Canadians are doing their banking online, the number of bank branches has decreased across the country since 2014. A vast majority of Canadians are satisfied with their banking experiences, whether in person, using ABMs, or digital banking options. Importantly, Canadians trust their banks to not only keep their money safe but also their personal data and to provide a secure digital banking experience.
Frequently Asked Questions
In 2021, Canadian banks held assets worth over $6 trillion. 90% of those assets were held by the six largest banks in Canada.
Canadians owed around $2.3 trillion in total in 2020. Approximately 74% of this household debt was on mortgages. In addition, banks lend to businesses, and in 2021, Canadian banks issued $1.52 trillion in credit to businesses in Canada.
In terms of net revenue, the biggest bank in Canada is the Royal Bank of Canada. It has over 17 million clients across the world, employs over 86,000 people, and has more than 1,300 branches. The other big banks in Canada are Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce.
Sometimes people refer to the big six when they want to include the National Bank of Canada in the group of banks dominating the banking industry in Canada. The six largest banks hold more than 90% of all Canadian banks’ assets.