Stock price when the opinion was issued
Value scores 8/10, fundamentals 8/10. King of capital, resilience, and diversified lending. Steady, consistent beats compared to the other Canadian banks. Strong Q1, shrugging off a lot of the rate cut noise. Still sees upside in wealth management and US expansion. Rock-solid balance sheet that can weather any storm.
Slowing mortgage growth, which could continue if Canadian housing slows and tariffs ramp up. Core hold for her on reliability and growth.
Good time to buy. Multiple has contracted on prospect of a slowing economy and potential for increased loan loss provisions. As a group, banks have been increasing loan loss provisions for a couple of years. Unknown how tariffs will impact economy; but RY is diversified with strong retail deposit base. HSBC Canada integration going well, source of future growth. Attractive dividend, increases a bit each year.
Both have a very large domestic presence, which helps them in this environment. Both had very good numbers last quarter and are very good businesses. As expected, all banks increased credit provisions.
RY will benefit more from its large capital markets business. Volatility helps capital markets a lot; perhaps you won't get the M&A, but a lot of trading goes on with equity, debt, and other derivatives. It's global. Expectation in US of deregulation in financial services; if so, RY will benefit a lot more than NA.
NA is smaller and more focused in Quebec, though the CWB acquisition is changing that.
Bank valuations are at high end of traditional range. Concerned about earnings growth going forward. Canadian economy has issues. US expansion may be more limited for a while.