Canada's dominant banks are reporting earnings that show they are doing far better than banks in the United States and Europe.
Royal Bank of Canada CEO Gord Nixon told shareholders Thursday in Vancouver that Canada's banks are the envy of the world and have stood out internationally.
President Barack Obama said last week than the United States should "take note" of how Canada has shown itself to be a good manager of its financial system.
Prime Minister Stephen Harper said Canada has strong regulation that encourages a cautious culture in the banks.
Canada has avoided government bailouts and has not experienced the failure of any major financial institution. There has been no crippling mortgage meltdown or banking crisis north of the border.
"We will continue to capitalize on our growing global reputation for strength and stability," Nixon said on a conference call.
Royal Bank, Canada's largest, reported that it earned a profit of $800 million in the fiscal first quarter ended Jan. 31, down 15 percent from last year's $998 million. That was still above levels expected by most analysts.
Meanwhile, CIBC reported a first-quarter profit of $117 million, better than its year-ago loss of $1.16 billion.
On Wednesday, TD Bank said its quarterly net income fell to $568 million from $774 million, but all its major businesses were solid _ including U.S. banking.
At a time when numerous American banks have had to be propped up with tens of billions of dollars of taxpayer support, TD Chief Executive Ed Clark declared that "the Canadian banks are in the best shape of any banking system in the world."
Canadian banks now have some of the largest market capitlizations in the world. Royal Bank has a $34 billion market cap after its stock jumped more than five percent after it reported its earnings on Thursday. Citigroup by comparison has a much diminished $13.5 billion market cap.
The stock prices of Canada's banks are down but not nearly as much as U.S. or European bank stocks. Canada's financial system is dominated by five banks, unlike in the U.S. where there are scores of banks.
Canada's big banks aren't as leveraged as their international peers.
The World Economic Forum said recently that Canada had the soundest financial system in the world, with a rating of 6.8 out of 7.
Robert Bothwell, director of the international relations program at the University of Toronto, said government oversight has prevented the Canadians banks from behaving like U.S. banks.
Bothwell said the previous Liberal government refused to let the five banks merge. The banks wanted to get bigger so they could expand into the U.S. but former Liberal Prime Minister Jean Chretien said it wasn't in the national interest.
Canadians pay much higher fees than Americans because of the concentrated banking system.
