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market share

Broker Lender Market Share – Q4 2018

Canada’s Big 5 banks lost 2.7 percentage points of market share in Ontario last year (according to Teranet). Their nationwide drop was likely similar, as Finastra’s latest “Lender Insights” report seems to suggest.

But that’s in all channels. In the broker market specifically, the combined volume going to Scotiabank and TD actually edged up slightly, with three out of eight brokered deals sent their way. That’s despite the stress test making bank deals harder to get done.

More notable, however, was the surge by prime broker-channel lenders. They seized 4.3 percentage points of share in 2018, which isn’t surprising given how the stress test and rising rates ballooned debt-service ratios (at least on paper). And Home Trust’s comeback didn’t hurt either.

As for Q4 performance in the broker space, here’s how the top 10 shook out:

Rank  Broker Channel Lender Market Share
Q4 2018*
12 Mo Share
1 Scotiabank 28% +140 bps
2 First National 13% -10 bps
3 MCAP / RMG 10.8% -60 bps
4 TD Canada Trust 9.6% -90 bps
5 Merix Financial 6.3% +70 bps
6 Home Trust Company 6.0% +310 bps
7 Equitable Bank 5.7% +80 bps
8 Street Capital 4.7% +20 bps
9 Desjardins 2.5% -40 bps
10 Manulife Bank 2.1% +10 bps

The Highlights:

  • Scotia remained dominant in the channel, posting a near-record slice of the pie (its maximum broker share was 28.3% in Q3 2017).
  • MCAP/RMG lost much of the headway it made in 2018 (when its share peaked at 16.3% in Q2). It should rebound somewhat this quarter, thanks partly to sharp pricing.
  • TD had a tough Q4 but its refi pricing is second to few others in the broker channel, so Q1’19 should be an improvement.
  • Home Trust posted reassuring numbers (+310 bps). It seems to have its business almost fully back on track after falling out of the top 10 in 2017. Keep an eye on this one. Buffet may have sold too early.
  • B2B Bank went MIA in 2018 (falling to roughly 0.3% market share, from 3.6% the prior year. That, of course, was after its parent company (Laurentian Bank) reported mortgage irregularities. We hear B2B is bringing back some non-prime products this year, so hopefully that sparks a comeback.
  • Equitable Bank hit a new record at 5.7% share. It, too, is enjoying the fruits of B-20.
  • In terms of mortgage activity by province, Alberta saw the largest pickup in volumes, up 4.2% year-over-year. B.C., on the other hand, saw volumes tumble 3.6%

Data Source: Finastra puts out an excellent non-public report called Lender Insights, which compiles lender market share data in the mortgage broker industry. We receive data from that report via third-party sources and have quoted it here. The data above is not confirmed, but is believed reliable. Note: These market share figures do not count certain Newton or MortgageBoss volumes (Finastra’s smaller competitors) and leave out a few lenders that Finastra doesn’t report by name, like CMLS Financial.