Bank Profit Indicator

by Tom Bradley

It’s that time of year again when we update the ‘Bank Profit Indicator’. In the 2021 fiscal year, Canada’s top 6 banks (BMO, CIBC, National, RBC, Scotia, and TD) generated net profit of $57.7 billion. As a result, our Indicator, which represents the amount of profit per woman, man, and child in Canada, is $1,518.

The banks had a big recovery in 2021 after a tougher 2020 ($1,083 per Canadian). Indeed, the indicator has blasted to a new high, exceeding the previous peak of $1,240 in 2019.

We feel obligated to report this statistic because (1) it amounts to a big chunk of Canadians’ disposable income and (2) it’s rarely reported. The $1,518 number is after-tax profit, not revenue. Nowhere in the world do banks earn this level of profit from their individual customers. The banks have a privileged place in Canadian society.

Note: In doing this calculation, we acknowledge that a portion of these profits come from foreign operations. The vast majority, however, come from providing banking, investment, and insurance services to individual Canadians. The profitability of the banks’ Canadian retail banking and wealth management divisions far exceed what they’re able to achieve in their foreign operations.