Commercial Banking in Canada Industry Market Research Report from IBISWorld Has Been Updated

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Historically low interest rates have hampered revenue and profitability for Canadian commercial banks. For this reason, industry research firm IBISWorld has updated a report on the Commercial Banking industry in its growing industry report collection.

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The remarkable debt levels of Canadian households make it increasingly likely that a period of deleveraging will begin from 2015.

Despite the low interest rates that emerged as a result of the global financial crisis, the Commercial Banking industry has performed relatively well over the five years to 2015. Over this five-year period, the overnight rate, which is strongly correlated with interest rates charged by commercial banks, is expected to increase slightly from 2010 to 2015, though will still near historic lows. As industry operators generate income from the difference between interest paid on deposits and interest obtained from loan products, low interest rates have tempered industry revenue and profitability in recent years. However, aggregate debt has continued to climb in Canada as total household credit, for example, increased from 2013 to 2014. Consequently, industry revenue is expected to slowly increase at in the five years to 2015 to reach $54.3 billion, with revenue expected to remain flat in 2015 specifically.

Industry trends have continued to be dictated by Canada's largest commercial banks, which are commonly referred to as the “big six,” over the five-year period. In 2015, the Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Scotiabank, Bank of Montreal and National Bank of Canada are anticipated to account for the vast majority of the industry's total assets. According to IBISWorld Industry Analyst Stephen Hoopes, “Generally, the big six have noted deposit volume growth and declines in allowances for loan losses over the five-year period, to the benefit of industry revenue and profit, respectively. Yet, in an effort to counteract prevailing low interest rates and escalating regulation, the big six have continued to acquire smaller competitors to increase scale and margins, a trend that is anticipated to continue in the years to come.”

Over the five years to 2020, projected increases in the overnight rate and improvements in corporate profit are anticipated to boost interest income acquired from lending products. “However,” says Hoopes, “the remarkable debt levels of Canadian households make it increasingly likely that a period of deleveraging will begin from 2015.” More specifically, housing starts are actually forecast to decline slowly over the five-year period. Additionally, mounting regulation and capital requirements hold the potential to limit the flexibility of industry operators and make them less competitive on a global scale.

For more information, visit IBISWorld’s Commercial Banking in Canada industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry provide financial services to retail and business clients in the form of commercial, industrial and consumer loans. Banks also accept deposits from customers, which are used as a source of funding for the loans. Banks in this industry include those that are regulated by the Office of the Superintendent of Financial Institutions.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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