This increases the cost of raising equity capital and may interfere with the ability of Canadian financial markets to provide the most efficient match between issuers and investors. Whether the source of the discount is a matter of perception or something more substantial, we need to understand the forces that are causing it.
For many foreign banks, traditional banking activities account for just a small part of their business. This makes their market share – currently 12.9% measured in terms of total assets – all the more remarkable. This trend has been driven by the arrival of new banks through mergers as well as growth, particularly in deposit business and instalment loans.