SOURCE: The Bedford Report

The Bedford Report

December 20, 2010 11:25 ET

Canadian Banks Continue to Gain Appeal -- What Are the Drawbacks?

The Bedford Report Provides Analyst Research on TD Bank & Royal Bank of Canada

NEW YORK, NY--(Marketwire - December 20, 2010) - Considered the "strongest banks in the world" in a report from the Bank for International Settlements, Canadian banks have been going on a spending spree this year. The nation's largest banks did not require bailouts during the global financial crisis, and have been using their financial strength to buy out weakened banks and expand their global presence. The Bedford Report examines the outlook for Canada's largest banks and provides research reports on Toronto-Dominion Bank (TSX: TD) and Royal Bank of Canada (TSX: RY). Access to the full company reports can be found at:

Canada's growing appeal has its drawbacks, however. Foreigners have been piling into Canadian securities of late, buying $9.5 billion worth in October, attracted by the country's relatively strong fiscal position. This in turn has sent the country's loonie up, which has prevented the Bank of Canada from raising interest rates to curb household lending, which is running at a rate of close to 150 percent of income.

The Bedford Report releases regular market updates on the Canadian Banking Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Canada's fourth largest banks, Bank of Montreal, made headlines last Friday when the company announced it was buying the Wisconsin lender Marshall & Ilsley (M&I) Corporation for $4.1 billion in an all-stock deal. Bank of Montreal says the deal adds to its position in the U.S. Midwest and more than doubles the branch network it runs through its Chicago-based Harris Bank unit. BMO says it expects to maintain "strong capital ratios" after the acquisition. The BMO/M&I deal sparked speculation that other strong Canadian banks will continue shopping for US Regional banks.

BMO certainly hasn't been the only Canadian bank shopping globally. TD Bank has expanded its U.S. presence in recent years with the purchase of New Jersey-based Commerce Bancorp and smaller, troubled banks in the Carolinas and Florida such as South Carolina-based South Financial Group.

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