Guess the stocks 1: Identify banks' ability to generate profits
If you're planning to start by investing in just one Canadian bank, a key question remains: How can you determine which bank will give you the best long-term performance?
Return on Equity (ROE) is one of the key financial indicators you can look out for. It measures how efficiently a bank uses its equity to generate profits, thereby indicating its profitability. It is particularly useful for comparing similar companies and provides a strong indication of earnings performance. Charlie Munger believed that companies with higher ROE levels are likely to deliver better long-term returns for their stock investors.
What do we get if we compare the ROE of different banks? Here are the questions!
Questions:
1) Which bank do Bank A, Bank B, and Bank C refer to, respectively?
2) Which is the most profitable Canadian bank? Please provide a brief explanation.
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Rewards:
50 points: All mooers who read through the post and answer all the following questions correctly will get 50 points.
More Hint:
The bank with the highest return on common equity (ROE) of the five largest Canadian banks in 2023 is considered one of the two largest banks in the country, alongside TD Bank.
The bank with the highest return on common equity (ROE) of the five largest Canadian banks in 2023 is considered one of the two largest banks in the country, alongside TD Bank.
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Drop your answers in the comment section below!
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FinanceGuru : Maybe Bank A refers to $BNS?![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
72663731 : $Royal Bank of Canada (RY.CA)$
74151749 : RBC
Fibin Mathew : RBC
74146305 : a- RBC, b-Scotiabank, c-cibc
Which Canadian bank is the most profitable - RBC
High roe
72675593 : rbc
Benfu : a - Scotiabank, b - rbc, c - CIBC
Andrew0904 : A-RBC, B-Scotia Bank, C-CIBC
Jason Fung : 1. Bank A = Royal Bank of Canada, Bank B = Bank of Nova Scotia, Bank C = Canadian Imperial Bank of Commerce
2. Royal Bank of Canada is the most profitable bank in Canada. It has the best reputation as lender for both retail and commercial clients. It pays great attention to security and compliance and does not take unnecessary risk to increase profits on the short term. Its loan book is the largest and of high quality compared to other Canadian banks and it is able to leverage that to generate high return for its investors.
CNNT : A - $National Bank of Canada (NA.CA)$
B - $Royal Bank of Canada (RY.CA)$
C - $Bank of Nova Scotia (BNS.CA)$
RY is the most profitable with a Net Margin of 28.43 in the past year.
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