Canadian Banks – US Investors Should Look Out For This Threat

The Canadian banks are old legendary institutions that have stood the test of time. They remained a beacon of stability during the financial crisis and came our relatively unscathed. This is because, the Canadian institutions have always remained focused on long term growth and always been a bit conservative than their US counterparts. It is for this reason, that the Canadian banks almost always find a spot or two featured in the list of safest banks in the world.

However, the Canadian economy is facing plenty of headwinds thanks to the collapse of the oil and commodity markets, recent recession and the possibility of a housing bubble bursting. As a result, the Canadian dollar (Loonie) has suffered losing approximately 50% of its value since its peak in the post financial crisis years.

In this article, I discuss two major threats facing the Canadian banks and provide an outline for both Canadian and US/International investors on what to expect.

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5 thoughts on “Canadian Banks – US Investors Should Look Out For This Threat

  1. Hi R2R, I still love the Canadian banks despite the current challenges in the economy as well.

    I hold TD, RY and BNS right now. I’ve decided to sold BMO and CIBC since I don’t want to pigeon hole myself into the banking sector. I will look to invest more into the banks when I have more cash position. For some reason the US banks still look very attractive right now thought. Nice read! 🙂

    • Hi Jeff,
      The currency problems are temporary – and over time things will even out. As it stands, Canadian investors will benefit a bit thanks to the weak C$ and US earnings from banks such as RY, TD and BMO.

      I hear you – I own two right now and I really find it hard not to invest in the others. I am thinking of picking up one more though..lets see.

  2. In the long run, the Canadian banks will underpin the Canadian economy and in the long run you know they will come back strongly. Like you said, Canadian banks are more conservative (which is a good thing) so they will do fine, they will weather any storm.

    I hope the Canadian bank’s Aussie cousins will do the same.


    • Aussie banks are also great dividend payers – wish they paid dividends more regularly though 🙂
      Really like the prospects of investing in Australia – esp considering I dont have to pay div withholding taxes.

      Keeping my eyes peeled for more opportunities.

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