📊 Efficiency Ratio (Non-Interest Cost-to-Revenue Ratio) of the 10 Largest Lenders in 🍁 Canada
October 29, 2024
Unlike common efficiency definitions, here a lower ratio indicates better efficiency.
🏅 Top Performers:
- 🔹 Best Efficiency: Equitable Bank with only $1B revenue, had the best efficiency ratio last year. For the past five years, their ratio has been less than 50%. This isn't surprising considering that Equitable doesn't have any branches.
- 🔹 Most Revenue: RBC, with a whopping $52B in 2023.
📊 Trend:
Last year's efficiency ratio numbers were the highest (worst) in the past 5 years for most lenders, indicating that the ratio of non-interest costs to revenue is increasing!
🏦Publicly Traded Lenders vs. Non-Public Lenders:
Among the 10 lenders, two are not public: Desjardins (Credit Union) and ATB (Owned by the Alberta Government). The efficiency of these two is clearly worse than the other eight banks, possibly because they are not under scrutiny of investors/shareholders.
Efficiency Ratio of 10 Largest Lenders in Canada
| Bank | Q4 2019 | Q4 2020 | Q4 2021 | Q4 2022 | Q4 2023 |
|---|---|---|---|---|---|
| RBC | 57.59% | 56.92% | 56.60% | 56.37% | 59.82% |
| TD | 55.79% | 51.57% | 56.60% | 52.29% | 64.57% |
| Scotiabank | 53.93% | 53.79% | 53.18% | 54.44% | 59.22% |
| BMO | 64.24% | 60.38% | 60.14% | 47.09% | 72.52% |
| CIBC | 58.33% | 60.63% | 57.63% | 58.64% | 61.52% |
| National Bank | 57.87% | 57.33% | 54.36% | 54.19% | 57.04% |
| CWB | 47.97% | 48.66% | 50.07% | 54.05% | 54.94% |
| Equitable | 40.20% | 38.41% | 40.35% | 46.69% | 45.61% |
| Desjardins | 62.90% | 65.50% | 73.70% | 79.20% | 76.30% |
| ATB | 70% | 69.40% | 70.70% | 70% | 71.90% |
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