Our rock

It’s been a moment since I’ve been in a bank branch. (Other than the historic stone BMO branch that I bought. Love that building.)

Like you, I receive most bills on email or a text and pay them through the bank app or by e-transfer. My income materializes via direct deposit. If I need something strange like a wire sent, I call my concierge banker dude.

The last trip to an actual banky place with sullen tellers and bad pens was to get a wad of emergency cash. (In a world where an Internet outage means life as we know it ceases, digital currency would be useless.) That money is kept secure in the freezer inside a foil package labelled ‘LASAGNA’. Totally secret. Oh, wait…

The point here is that banks today are not banks as most ancient people over 40 recall them. The kiddos never go to one. Just as paper money is a rarity, so are bank branches. No wonder the banks have shuttered 12% of their combined branch network in the last decade. In fact, more than 560 locations of banks and credit unions have gone dark in four years.

So increasingly they are technology companies, moving billions a day in wealth that exists only on a screen. Diminishing fast is the need for everything from massive safes to armoured trucks and even TNL@TB.

Just look at Scotiabank, for exampled. Almost 15,000 employees have been punted in the last few years, taking its global workforce from over 101,0000 souls to 86,400. It’s happening at all of the Big Six. And the AI purge has only just begun – because if there’s any industry that can be massively automated, it’s financial services.

But wait. Is there no good news here?

Loads of it. The quarterly earnings just reported in the last few days have again topped analysts’ expectations. Some would call this obscene, but they all vote NDP and are therefore inconsequential. Here in the capitalist mecca of Bay Street, no profit is ever too large.

In case you missed it, in just three months RBC made $5.5 billion, TD earned $4.1B, Scotia $2B, BMO $2.6B and CIBC $2.4 billion. All of them beat the Street and several increased their dividends. So in addition to the very real potential of sustained capital gains through owning their banks (individually or through an ETF), they dish out serious income – and it’s tax-advantaged.

Current dividend yields put the interest on most GICs paid by the same banks to shame. For example, TD and BMO pay 3% and Scotia gives 4.5%. These are returns on fully-liquid investments (no locking in as with a GIC), plus you get the dividend tax credit. Sweet.

By the way, the Big Banks currently account for a whopping 21% of the entire Canadian stock market, as represented by the TSX. This is the largest component of the index, swamping manufacturing, the oil and gas industry Alberta moans and whines about daily, and even our fetish sector, real estate. So fat, happy banks are good for your RRSP or TFSA, your mutual funds, your corporate pension fund and the CPP.

Oh, and the banks hold residential mortgages worth $1.76 trillion – the lion’s share of all the real estate financing in Canada. A shocking amount of this is backed by taxpayers.

Well, banks are good. Even if you don’t visit one anymore.

Also understand how good these guys are for Canada. With tentacles throughout the entire economy, our banks are harbingers of national financial health and wellbeing. They finance virtually every mine, port, pipeline, factory, construction site, lobster boat and new home in the country. No major Canadian bank has failed in our lifetime. None will. When Wall Street titans were toppling like dominoes in the Credit Crisis, our guys were rocks. And if a systemically important bank ever did run into trouble, we now have in place a bail-in mechanism that protects depositors and taxpayers.

These latest earnings should have doomers rethinking their narrative. Loan-loss provisions are falling. Bad loans are a non-issue. The mortgage renewal tsunami of pain never happened. Home loan delinquency rates remain absurdly low. America’s unfair tariffs did not kill us, credit quality or investment in our fair land.

In a time to Trump, war, intense change and doubt, the bankers will save us.

How Canadian.

About the picture: “I have been an avid reader of the blog for eight plus years,” writes Dave. “I had a good friend that also had a keen interest in finances pass along this website. I have kept that tradition alive and offered up your website anytime someone shows an interest in finances during conversation. One of these individuals has took it upon himself to call me out for never sending you a picture of my canine, Gibson. He is now an 8-year-old Rhodesian Ridgeback. Very loyal, gentle, athletic gentlemen, who loves to have a blanket placed over him while on his bed. Thank you for all the reading material it is very much appreciated!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/05/28/our-rock/