Canadian Banks Gaining on US Pain
Canadian banks, including Bank of Nova Scotia, TDBank, Bank of Montreal, and Royal are all charging into the US market, acquiring US banks. Tight lending rules that limited their subprime losses and write-downs have left Canada’s banks with plenty of cash to buy up US institutions, whose stocks are down an average of 42% in the last 12 months.
Canadian banks are also benefiting from the boost afforded them by the strong CAD, which has appreciated 5.8% against USD since 2006.
So far TD Bank and the Bank of Nova Scotia have spent a record $10bln on US-owned assets over the past year and Royal and BMO are likely to continue shopping for targets such as Regions Financial and Huntington Bancshares.