Banks control three out of four mortgages in Canada’s $1.1 trillion mortgage market, and their share has been growing.
We recently spoke with someone who makes it his business to track mortgage market share, David McVay of McVay and Associates Ltd.
Being incorrigible mortgage data addicts, the figures David shared were fascinating. We’ll convey the highlights over the next week.
First off, since everyone loves a good top 10 list, here are the top 10 Canadian mortgage lenders by market share…
The Big Hitters
| Rank | Lender | Mortgage Book | Market Share | 12 Mo Chg |
| 1 | RBC | $186.3 billion | 17.08% | +32bps |
| 2 | TD Bank | $157.0 billion | 14.40% | +87bps |
| 3 | CIBC | $148.7 billion | 13.64% | -9bps |
| 4 | Scotiabank | $145.7 billion | 13.36% | -15bps |
| 5 | Desjardins | $81.3 billion | 7.46% | +5bps |
| 6 | BMO | $71.2 billion | 6.53% | -38bps |
| 7 | First National | $40.8 billion | 3.74% | +27bps |
| 8 | ING Direct | $30.2 billion | 2.77% | +3bps |
| 9 | National Bank | $29.3 billion | 2.69% | +22bps |
| 10 | HSBC | $19.7 billion | 1.81% | -12bps |
Market share figures are estimates based on data from OSFI, the Bank of Canada, and McVay’s proprietary sources. Data is as of November 2011 (there is a lag in reporting). These statistics reflect both off-balance sheet securitized mortgages (prior to IFRS) and mortgage securitization retained on balance sheet as securities.
Some quick takes:
- Canada’s Big 5 banks hold two out of three mortgages (65% market share).
- The growth leader has been TD (Yes, despite criticism for its collateral charge mortgages). McVay says: “Collateral charges are a trend I expect to see right across the industry, as a way to secure customer relationships.” That’s because collateral charges generally make switching lenders more costly.
- BMO has shed significant mortgage share since exiting the broker market (more on that this weekend), and also because of its strategy to build share in HELOCs.
- National Bank has been doing well, says McVay, “largely from mortgage portfolios that it’s been buying, its broker association and its Power Financial linkage.”
Source: McVay and Associates Ltd.
McVay and Associates is a source of market intelligence, strategies, tactics and monthly market share data in retail banking. Founded by David McVay, a 30+ year veteran in financial services, McVay and Associates produces two widely-referenced industry reports: The Banking Personal Market Report and The Credit Union Report.
Rob McLister, CMT
Last modified: April 29, 2014
I’m a little skeptical regarding IFRS accounting changes because it does not reflect the banks actual holdings of MBS, rather total assets held under the issuer that includes mortgages owned by investors. In the case of insured mortgages, titles (assets) are held by CMHC on behalf of investors.
On another note, TD started offloading MBS holdings as seen here based on CMHC’s latest data (represents prior months activity) http://i42.tinypic.com/ftgged.png If I had to speculate as to who they off-loaded it to, I’d say the BoC right before the new year ended. http://i41.tinypic.com/34sms1d.png
They have look profitable somehow. ;)
Last year’s numbers show that First National had a market share of 14%, and now it dropped to 3.74%.
How is this possible?
Hi Melissa, You’re referring specifically to broker market share. These figures above refer to the overall mortgage market. Cheers…
Since the Firstline book of business represents roughly a third of CIBC’s total book it poses an interesting question: can CIBC ramp up branch and direct sales force activity fast enough to offset the brokerage losses?
Another interesting question would be: why is Scotia down, even just a tiny amount if they now lead the broker market?
I’m guessing it’s because Scotiabank has an older clientele and can’t replace mortgages as fast as other banks.