By Ian Bickis
The uncertainty at the start of the year had banks tucking billions of dollars aside in case the picture worsened for heavily-indebted Canadian consumers as many renewed their mortgages at much higher rates.
As the year comes to a close, it’s clear banks and borrowers fared better than feared, leaving some of the biggest stories in the financial industry to be blockbuster deals, surprises and scandals at individual lenders.
Here’s a look at some of the key numbers that tell the story of 2024 for the Canadian financial sector:
$58,771,000,000 — The adjusted profits of the Big Six banks in the 2024 fiscal year. That’s up a billion dollars from a year earlier, though still a little below the highs of 2021-2022. Heading into 2024, there were heightened fears about mortgage defaults and borrower stress with interest rates running high. The strains did lead to subdued loan growth, but with Canada settling into a soft economic landing, banks still managed robust profits. Expectations are for better growth in 2025, mostly in the second half of the year, as interest rate cuts have time to work through the economy.
3.25% — The Bank of Canada interest rate at the end of the year, down from five per cent at the start of June. Banks followed the central bank’s lead and have lowered their prime rates to 5.45%. More cuts are on the way for 2025 with RBC expecting the central bank rate to lower its key rate to two per cent by July because of the weak economy. Meanwhile, the U.S. interest rate came down only half a percentage point as its economy remains much stronger. The Federal Reserve suggested earlier this month it may cut just twice next year.
0.20% — The mortgage delinquency rate in Canada at the end of the third quarter, according to Equifax Canada. That’s up from a historically low 0.14% two years ago, but still below the more than 0.30% that it averaged in the years before the pandemic. Banks expect delinquencies to creep higher next year as job losses grow, but say overall, they’re comfortable with their mortgage portfolios.
$4.45 billion — What TD Bank Group paid the U.S. government for its oversight failures on anti-money laundering controls. The bank took full responsibility for the failures, which led to criminals laundering more than $965 million in illicit drug profits through its branches in the U.S. Regulators also capped its retail asset growth. TD chief executive Bharat Masrani announced he would retire in the new year, to be replaced by Raymond Chun.
780,000 — The number of customers who were moved over to RBC after Canada’s largest bank closed its $13.5 billion acquisition of HSBC Canada in March. RBC also took on about 4,500 employees and $108.5 billion in assets. The acquisition took out a dynamic player in the mortgage space, but banks maintain that rate competition remains fierce.
$246,000,000,000 — RBC’s market capitalization as of the last Friday of the year, after an almost 30 per cent climb in 2024. The gains came thanks in part to the HSBC deal closure, as well as easing worries from investors around the banking sector. Royal Bank is by far Canada’s largest company by market cap, ahead of Shopify at around $199 billion and well ahead of TD Bank Group at $133 billion, after TD lost a little more than 10 per cent of its value over the year.
$49 million — The amount RBC’s former chief financial officer Nadine Ahn sued the bank for over claims of wrongful dismissal. RBC had fired Ahn in April over allegations she had an “undisclosed close personal relationship” with another employee, who received preferential treatment. Back and forth legal filings revealed numerous personal details about her relations with her colleague, including pet names, a poem and a “Love Book” photo album, but Ahn maintains it was a workplace friendship and not the close personal relationship as RBC alleges. Ahn signed on as deputy chief financial officer of Canaccord Genuity in October.
557,400 — The number of shares that a Scotiabank subsidiary held in Israeli defence contractor Elbit Systems Ltd., worth about US$144 million, near the end of the year. That’s down from the 2,236,500 shares, worth about US$443 million, that it held near the end of 2023. Scotiabank had faced numerous protests related to the holdings because of Elbit’s role in supplying Israel weapons for the war in the Gaza Strip, but it said the decision by its 1832 Asset Management to sell wasn’t influenced by the protests.
US$104 billion — The amount of fossil fuel funding Canada’s five biggest banks provided in 2023, as outlined in a March report from a coalition of climate groups. For most banks, it was their lowest level of oil and gas funding since the signing of the Paris climate agreement in 2015, but the drop also came as huge oil and gas profits lowered the industry’s need to borrow. RBC, which topped the list in the report at US$28.2 billion, also committed to tripling its renewable energy funding to $15 billion by 2030.
60% — The current maximum legal interest rate lenders can charge, based on an effective annual interest rate basis that factors in compounding. It works out to 48% on an annual percentage rate. The federal government moved forward this year with regulations that will see the rate capped at 35% on an annual percentage rate. The change, which also puts new restrictions around payday loans, comes into effect Jan. 1.
This report by The Canadian Press was first published Dec. 29, 2024.
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Last modified: December 29, 2024