TD becomes Canada’s premium bank taking crown from RBC




TD becomes Canada's premium bank taking crown from RBC

TD overtakes RBC

The Royal Bank of Canada lost its crown to Toronto-Dominion Bank, which rose to a record today.

Toronto-Dominion’s returns more than doubled its Canadian competitor in the past year, eliminating the premium Royal Bank shares enjoyed for the better part of a decade.TD becomes Canada's premium bank taking crown from RBC

John Aiken, an analyst with Barclays Plc, said in an interview, “The pendulum has swung a bit more negative on Royal Bank.There’s no one definitive thing that says Royal’s outlook is now being tarnished relative to TD’s. It just looks like we’re getting a shifting preference in the marketplace.”TD becomes Canada's premium bank taking crown from RBC

Royal Bank’s stock valuation, measured by share price to tangible book value, has tended to carry a premium over other Canadian banks for the past decade. Toronto-Dominion did hold a higher valuation from the early 2000s up until the financial crisis — a period when it was buying U.S. banks. Since November 2012 it’s been all RBC, until the past month.

Toronto-Dominion shares have surged 18% in the past 12 months while Royal Bank gained 7.1 %. The eight-company S&P/TSX Commercial Banks Index rose 8.8 per cent in the period. Royal Bank closed at $100.44 in regular Toronto trading on Wednesday, while Toronto-Dominion hit a record $76.74.