A by-the-numbers look back at Canadian finance in 2024

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TORONTO – The big questions in Canadian finance heading into 2024 are whether the economy can avoid a recession and what will happen with interest rates.

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Uncertainty at the start of the year led banks to set aside billions of dollars in case the picture deteriorated for debt-laden Canadian consumers, many of whom renewed their mortgages at much higher rates.

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As the year comes to a close, it’s clear that banks and borrowers have performed better than expected, leaving some of the biggest stories in the financial industry to be blockbuster deals, surprises and scandals at individual lenders.

Here’s a look at some of the key numbers that tell the story of 2024 for Canada’s financial sector:

$58,771,000,000: Adjusted earnings for the big six banks in fiscal 2024. That’s $1 billion more than the previous year, though still slightly below the 2021-2022 highs. Heading into 2024, there have been growing concerns about mortgage defaults and borrower pressures as interest rates rise. The pressures dampened loan growth, but as Canada settled into a soft economic downturn, banks continued to post strong profits. Expectations point to better growth in 2025, especially in the second half of the year, as interest rate cuts have enough time to work through the economy.

3.25 percent: The Bank of Canada cut interest rates at the end of the year from five per cent at the beginning of June. Banks followed the central bank’s example and lowered key interest rates to 5.45 percent. More cuts are on the way for 2025, with RBC expecting the central bank to cut its key interest rate to 2 percent by July due to the weak economy. Meanwhile, the US interest rate fell by just half a percentage point, as its economy remained much stronger. The US Federal Reserve suggested earlier this month that it may cut interest rates only twice next year.

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0.20 percent: Canada’s mortgage delinquency rate at the end of the third quarter, according to Equifax Canada. That’s higher than the historic low of 0.14 percent two years ago, but still below the more than 0.30 percent it averaged in the years before the pandemic. Banks expect delinquencies to creep higher next year as job losses mount, but generally say they are comfortable with their mortgage portfolios.

$4.45 billion: What TD Bank Group paid the US government for its failure to oversee anti-money laundering controls. The bank took full responsibility for the failures, which led to criminals laundering more than $965 million in illicit drug profits through its subsidiaries with US regulators, and also limited the growth of its retail assets. TD CEO Bharat Masrani has announced that he will retire in the new year, to be replaced by Raymond Chun.

780,000: The number of clients transferred to RBC after Canada’s largest bank closed its $13.5 billion acquisition of HSBC Canada in March. RBC also acquired about 4,500 employees and assets worth $108.5 billion. The takeover has captured a dynamic player in the mortgage space, but banks stress that price competition remains fierce.

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$246,000,000,000: RBC’s market capitalization as of the last Friday of the year, after a nearly 30 percent rise in 2024. The gains came partly thanks to the closing of the HSBC deal, as well as easing investor fears across the banking sector. Royal Bank is by far Canada’s largest company by market capitalization, ahead of Shopify at about $199 billion and far ahead of TD Bank Group at $133 billion, after TD lost just over 10 per cent of its value over the year .

$49 million: The amount former RBC CFO, Nadine Ahn, sued the bank over allegations of unfair dismissal. RBC fired Ahn in April over allegations that she had an “undisclosed close personal relationship” with another employee, who received preferential treatment. The back-and-forth legal filings revealed numerous personal details about her relationships with her colleague, including pet names, a poem and a “Book of Love” photo album, but Ahn maintains it was a workplace friendship and not a close personal relationship as RBC claims. Ahn signed on as deputy CFO of Canaccord Genuity in October.

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557,400: The number of shares held by a Scotiabank affiliate in the Israeli defense company Elbit Systems Ltd., worth about $144 million, near the end of the year. This is less than the 2,236,500 shares, worth about US$443 million, that it held towards the end of 2023. Scotiabank has faced numerous protests related to the holdings over Elbit’s role in supplying Israel with weapons needed for the war in the Gaza Strip, but it said. The Asset Management’s 1832 decision to sell was not affected by the protests.

104 billion US dollars: The amount of fossil fuel financing provided by Canada’s five largest banks in 2023, as outlined in a March report from a coalition of climate groups. For most banks, this was the lowest level of oil and gas financing since the Paris climate agreement was signed in 2015, but the decline also came as huge oil and gas profits reduced the industry’s need to borrow. RBC, which topped the list in the report with $28.2 billion, has also committed to tripling its funding for renewable energy to $15 billion by 2030.

60 percent: The current maximum legal interest rate that lenders can charge, based on the effective annual interest rate that factors in compounding. Up to 48 percent annual percentage rate. The federal government moved forward this year with regulations that will see the rate cap set at 35 percent on the annual percentage rate. The change, which also places new restrictions on payday loans, goes into effect on January 1.

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