Canada Has Best ‘Boring’ Banks in the World, Citi Says

The Toronto-Dominion Bank building stands in the financial district of Toronto.

Photographer: Brent Lewin/Bloomberg

Canadian lenders are tops among the world’s most “boring” banks -- and that’s a good thing, according to Citigroup Inc.

They rank as the best compared with those in other boring financial markets such as Australia and the Nordic nations, Citigroup analysts led by Ian Sealey wrote in a Sept. 12 note to clients. Boring lenders have sector-leading profitability, best-in-class cost efficiency and attractive capital returns, according to the analysts.

Canada wins in three areas: growth, net interest margin expansion and return on equity gains, while Nordic banks lead in cost efficiency and share No. 1 with Australian lenders for top capital return, according to the note. Citigroup’s top Canadian picks are Toronto-Dominion Bank and Royal Bank of Canada, both of which have a buy rating.

“The Canadian banks are outpacing the boring banks in growth through international expansion,” the analysts said, with average loan growth at 5 percent compared with 3 percent for Nordic and Australian lenders. “They are also most geared to higher base rates."

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