Canada: National Bank of Canada to push for investment banking market

The National Bank of Canada (NBC) has set a goal of being a ‘top 3’ investment bank in Canada within 5 years. NBC wants to gain relationships with Canada’s biggest companies by leveraging its balance sheet and expanding its areas of coverage while maintaining ties to the medium-sized businesses, valued at less than $3 billion, that it currently services. According to RFi data, NBC currently has market share of 6% in the commercial banking space (businesses with annual revenue of over $10M), and ranks 6th overall.

NBC, a major player in the Quebec market, believes there is an opportunity in this Canadian market due to the existing major players splitting their focus into other areas, with the Royal Bank of Canada (RBC) and Bank of Montreal (BOM) focused on their US investment banking operations, Scotiabank focused on Latin America, and Toronto-Dominion Bank (TD) looking after retail banking.

Barclays Plc Analyst, John Aiken, believes NBC may have success if they are committed for the long term, provided they are willing to lend money on more favourable terms than its competitors in the initial stages to gain traction. Mr Aiken also pointed out that the traditional players will not give up market share easily, meaning getting a footing in this market will be a challenge for NBC.

NBC added 10 investment bankers to the team in 2016, and plans to add a similar number of 2017.

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