Canadian Bank Landscape Outlook For 2024

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In this blog post, we are going to cast our eye on the Canadian Banking Sector in 2024. We will look at the sector generally and then examine how the rise of neo-banks is impacting and slowly shifting the landscape. 

In order to compile this detailed expense report we have used a number of sources including the Canadian banks’ own annual reports, some world renowned financial publications, and news aggregators, as well as blogs covering this space like Million Dollar Journey.

The Big 5 Canadian Banks

Canada’s famously stable banking landscape has long been dominated by five major institutions, known collectively as ‘the Big Five’. These megaliths have been the bedrock of Canada’s financial system for decades now, and all are globally renowned for their stability.

Let’s now take a brief look at who the Big 5 Canadian Banks are:

  • Royal Bank of Canada (RBC): Established in 1864, RBC is a leading global financial services leader.
  • Toronto-Dominion Bank (TD): Known for its extensive retail operations, TD was founded in 1955 following a merger between Toronto Bank and Dominion Bank.
  • Scotiabank: Dating back to 1832, Scotiabank is noted for its international presence.
  • Bank of Montreal (BMO): This is Canada’s oldest bank, established way back in 1817.
  • Canadian Imperial Bank of Commerce (CIBC): Formed in 1961,  it now offers a range of financial services.

Collectively, the Big Five control a colossal market share. They serve millions of customers across Canada and North America while generating significant and stable dividends for their shareholders.

We will get into exact figures in the next section but it is sometimes estimated that almost every Canadian has at least one account with or financial product from one of the Big 5. Furthermore, the Big 5 are ubiquitous in Canada’s stock market and feature in most serious Canadian investor portfolios.

The dominance of the Big 5 in Canada can be attributed to the bank’s deep historical roots, strong customer loyalty, diversified services, and the ‘safe and steady’ regulatory framework of the country. 

Critics however often point out that Canada’s overtly conservative regulators restrict innovation in the sector, and that the Big 5 use their monopoly position to stifle challengers.

Reviewing the Big 5’s Reports

Canada’s Big 5 controls around 90% of customer funds which places them in a very strong position. Let’s take a look at how they performed last year.

Royal Bank of Canada

In 2022, RBC posted a net income of CA$15.8 billion. This was a slight decrease from the previous year, down by $243 million or 2%​​.

Toronto-Dominion Bank

In 2022, the total net income of TD Bank was CA$13.338 billion. This figure represented a significant 19.37% increase from the $11.173 billion net income it posted in 2021.


Meanwhile, Scotiabank reported a net income of CA$ 10,174 million, an increase from $9,955 million in 2021. This performance reflected a solid financial year for the bank.

Bank of Montreal

Now for BMO. They reported a net income of CA$13.3 billion. This was a significant increase of 77% from the net income in 2021.

Canadian Imperial Bank of Commerce

In 2022, the Canadian Imperial Bank of Commerce (CIBC) reported a net income of CA$6.05 billion. This figure marked a 3.5% decrease from the net income in 2021.

How The Big 5 Make Money

Let’s now pause to look at how banks make money in Canada. The majority of the Big 5’s revenue comes from Retail and commercial deposits and wholesale funding and these remain the Canadian banking sector’s 2 major sources of funding.

It is also worth noting that Canadian banking customers also help to keep banking nice and profitable by paying for things like chequing accounts. They also generally pay greater fees than U.S. and European banking customers.

As for interest rates, at the time of writing, the Big 5 are all offering 3-year fixed mortgage interest rates of around 7.25% while at the same time, all are only offering savings interest rates below 6%. This has also allowed them to leverage some extra revenue which will no doubt result in increased profit postings in 2023.

Neobanks in Canada

While the fin-tech revolution started a decade ago in Europe and the US, it has taken a bit longer to catch on in Canada.

However, there are now a number of Neobanks (digital-only, online banks) now operating in Canada. These banks are able to entice customers away from the Big 5 by offering an enhanced user experience, easy-to-use apps, and low fees as well as offering attention-grabbing “loss leaders” such as free overseas cash withdrawals.

Notable non-banks like Tangerine (known for its no-fee checking and savings accounts)  and EQ Bank (offering high-interest savings accounts and GICs) are now reshaping customer expectations.

With an increasing number of Canadians reporting dissatisfaction and frustration with the Big 5, the appeal of the neobanks lies in innovative technology, lower fees, and enhanced user experiences. Despite their growing popularity, neobanks are still finding their footing in the competitive landscape.

Final Thoughts

The Big Five are not going anywhere anytime soon and look set to enjoy their dominion over the Canadian banking sector for some time to come. 

This is partially because of Canada’s tight regulations slowing down the advance of the neo banks, but also because of deeply entrenched customer habits – Canada has not yet experienced the tipping point moment where large numbers of customers feel ready to trust a non-physical bank. 

Still, progress may sometimes be slow but it is always inevitable. The Canadian market is finally well poised for evolution and the neobanks seem destined to overcome significant hurdles to challenge the Big Five’s dominance sooner or later.