NEW YORK, NY -- (Marketwire) -- 05/11/12 -- Canada's financial sector continues to be ranked as one of the world's safest. Four of Canada's banks rank in the top 10 of Bloomberg Markets' second annual world's strongest bank rankings, with another two ranking in the top 25. Bloomberg Markets magazine reported that since 2008 the nation's six banks spent a total of $37.8 billion in acquisitions. The Paragon Report examines investing opportunities in the Canadian Banking Sector and provides equity research on Canadian Imperial Bank of Commerce (NYSE: CM) (TSX: CM) and Royal Bank of Canada (NYSE: RY) (TSX: RY).
"We and our Canadian competitors are only able to do that because we have some flexibility as a result of our strength," says Gerald McCaughey, CEO of Canadian Imperial Bank of Commerce, which last year purchased a minority stake in American Century Investments from JPMorgan Chase & Co. "Over the longer term, this should actually help to maintain the strength of the Canadian banking system and its competitiveness."
Canadian bank stocks have greatly outperformed their U.S. counterparts. When comparing the Standard & Poor's/TSX Composite Commercial Banks Industry Index (STCBNK), which tracks Canada's eight publicly traded banks, to the U.S. KBW Bank Index (BKX), the STCBNK rose 4.8 percent compared to a 56 percent decline for the BKX for the four years ended on Dec. 31, 2011.
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CIBC has been named as the strongest bank in Canada and North America and the third strongest bank in the world by Bloomberg Markets magazine. This is the second year the bank has been recognized among the world's strongest banks. Bloomberg's global study is based on banks with more than $100 billion (U.S.) worth of assets. In 2011, CIBC reported a net income of $3.1 billion, a year-over-year increase of more than 25 percent.
Royal Bank of Canada last month announced that it has entered into a definitive agreement to acquire the 50 percent stake that RBC does not already own in the joint venture RBC Dexia Investor Services Limited from Banque Internationale à Luxembourg S. A. for total consideration of C$1.1 billion in cash. Royal Bank will release its second quarter results for 2012 on May 24, 2012.
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