Member Login
  1. Category
    2. /
  2. Investing
    3. /
  3. Bank Stocks
    4. /

Bank Stocks

What are bank stocks?

Bank stocks represent partial ownership in a financial institution that’s licensed to hold and loan money. Over time, bank stocks have been relatively safe investments, as they offer products and services that most people need.

How do you choose a good bank stock? 

1. Look at the bank’s profitability

First, you want to be sure the bank is even profitable. To do that, you can use the following metrics. 

  • Return on equity (ROE): this metric tells you how much profit a bank makes from its shareholder’s equity. The higher this metric, the more efficient a bank is using its stakeholder’s money. 
  • Return on assets (ROA): the ROA tells you the overall profit a bank makes in relation to its assets. The higher the ROA, the more profit a bank makes from its assets. 
  • Efficiency ratio: the efficiency ratio tells you how much revenue a bank uses towards its operating costs. The lower the efficiency ratio, the more revenue a bank theoretically has. 

2. Assess the bank’s risks 

One of the biggest risks a bank has is losing money on an outstanding loan. As with profitability, a couple metrics could help you see how much banks are losing.

  • Nonperforming loans ratio (NPL): Nonperforming loans are loans that are at least 90 days past their due date. A bank with a low percentage of NPL (2% is a good ratio) is doing fairly well collecting loan repayments from its customers. 
  • Net charge-offs: a net charge-off is a bank’s declaration stating that a loan hasn’t been paid and is unlikely to be paid. As with NPLs, the less net charge-offs a bank has, the less money it’s losing on outstanding loans. 

3.  Check back here for our top picks 

Finally, we’ll keep this page updated with our staff writer’s reviews and assessment of Canada’s bank stocks. Our writers often use these metrics to help investors see which bank stocks are doing well and which are doing poorly. 

[KevelPitch adtype=151]

Check back here for the most up to date information about bank stocks in Canada.

Top Articles

Bank Stocks

Is BNS Stock a Buy in January 2023?

| Andrew Walker

Bank of Nova Scotia stocks looks cheap right now. Is this a good time to buy or should investors wait?

Read more »

Bank Stocks

TSFA or RRSP – Better Place to Stash Cash in 2023?

| Amy Legate-Wolfe

If a recession hits us hard in 2023, you'll want the ability to take out cash if you need it.…

Read more »

Dividend Stocks

TFSA Investors: Why You Should Invest Your Room ASAP With These 3 Stocks

| Adam Othman

Choosing the right TFSA stocks for your portfolio might take some time. But with the right choices, you can stick…

Read more »

Bank Stocks

Is Now the Right Time to Buy Canadian Bank Stocks?

| Andrew Button

Some bank stocks, like Toronto-Dominion Bank (TSX:TD) are doing well; others, not so much. Is it time to buy bank…

Read more »

Bank Stocks

2 Bank Stocks to Load Up on in a Recession

| Chris MacDonald

Here are two top Canadian bank stocks investors may want to consider, particularly as we potentially head into a recession.

Read more »

Bank Stocks

Better Buy: RBC Stock or the Entire TSX?

| Brian Paradza, CFA

Buying Royal Bank of Canada (TSX:RY) stock lets you invest like Warren Buffett does, but investing in the entire TSX…

Read more »

Bank Stocks

CRA: 3 Big Changes Coming to 2023 Tax Breaks

| Aditya Raghunath

Use the tax breaks to lower your tax bill and purchase blue-chip TSX stocks such as Royal Bank of Canada.

Read more »

Bank Stocks

The 1 TSX Stock I’d Go All-In On

| Andrew Button

TD Bank (TSX:TD)(NYSE:TD) stock is out of favour now but could come back in a big way.

Read more »

Recent Bank Stocks News

grow money, wealth build
Bank Stocks

I’d Put $7,000 in This Canadian Bank Stock for Decades of Growth and Income

| Amy Legate-Wolfe

If there's one safe stock that any one can buy today with zero fear, it's this top bank stock.

Read more »

man touches brain to show a good idea
Bank Stocks

Bank of Nova Scotia: Buy, Hold, or Sell Now?

| Andrew Walker

Bank of Nova Scotia picked up a new tailwind in recent weeks. Is more upside on the way?

Read more »

think thought consider
Bank Stocks

TD Bank: Buy, Sell, or Hold Today?

| Andrew Walker

TD stock is up more than 20% in 2025. Is the rally just beginning?

Read more »

Piggy bank and Canadian coins
Bank Stocks

An ETF’s Payouts That Make Bank

| Tony Dong, MSc, CETF®

This unique TSX bank ETF uses modest leverage to juice its yield and returns.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

Where Will TD Bank Stock Be in 5 Years?

| Andrew Button

Toronto-Dominion Bank (TSX:TD) is beating the market this year.

Read more »

chart reflected in eyeglass lenses
Bank Stocks

I’d Put $7,000 in This Canadian Dividend Knight Without Hesitation

| Jitendra Parashar

Dependable, rewarding, and built for the long term -- this top Canadian dividend stock is worth considering right now.

Read more »

woman analyze data
Bank Stocks

1 Magnificent Banking Stock up 40% to Buy and Hold Forever

| Amy Legate-Wolfe

Do you want a top bank stock at a steal of a deal? This dividend banker is one of the…

Read more »

Muscles Drawn On Black board
Stocks for Beginners

This Banking Powerhouse Yielding 4.4% Has Paid Dividends for 196 Straight Years

| Amy Legate-Wolfe

This bank stock is one of the oldest banks out there, and it has been pumping out dividends since day…

Read more »

Canadian dollars in a magnifying glass
Bank Stocks

The Smartest Income Play to Buy With $4,600 Right Now

| Andrew Button

Dividend stocks like the Toronto-Dominion Bank (TSX:TD) provide passive income.

Read more »

3 colorful arrows racing straight up on a black background.
Stocks for Beginners

This Canadian Financial Stock Down 11% Looks Ready for a Significant Rebound

| Amy Legate-Wolfe

Investors can find some of the strongest banks in the world here in Canada, and this one looks like a…

Read more »

open vault at bank
Bank Stocks

Why You Should Buy Canada’s Most International Bank

| Demetris Afxentiou

Bank of Nova Scotia is often regarded as Canada's most international bank. Here's why you need that big bank in…

Read more »

Canadian dollars are printed
Bank Stocks

This Overlooked Financial Stock Down 28% Is a Cash Flow Machine

| Jitendra Parashar

Despite being down from its highs, this underrated financial stock keeps delivering strong results and reliable dividends.

Read more »

open vault at bank
Bank Stocks

1 Magnificent Canadian Bank Stock Down 16% to Buy and Hold Forever

| Aditya Raghunath

Down 16% from all-time highs, EQB is a TSX bank stock that trades at a sizeable discount to consensus price…

Read more »

jar with coins and plant
Stocks for Beginners

TFSA Investors: Buy $10,000 of TD Stock for $462 in Annual Passive Income

| Amy Legate-Wolfe

TD stock is one of those stocks that you just know will reward you every time, and with dividends? It's…

Read more »

Investor reading the newspaper
Bank Stocks

Is Royal Bank Stock a Buy Before May 29?

| Jitendra Parashar

With Royal Bank’s earnings just around the corner, here’s what’s fueling the stock’s rally, and whether now’s the right time…

Read more »

woman analyze data
Bank Stocks

TSX at Record Levels: How to Invest Without Overpaying

| Jitendra Parashar

Markets may be surging, but you don’t have to overpay. These proven strategies and a top stock on the TSX…

Read more »

A worker gives a business presentation.
Bank Stocks

Where I’d Invest $10,300 in the TSX Today

| Jitendra Parashar

When the market feels uncertain, this is the kind of TSX stock I want my money in.

Read more »

Skiier goes down the mountain on a sunny day
Bank Stocks

TD Bank Crushes Q2 Earnings and Rallies 3.5%!

| Andrew Button

The Toronto-Dominion Bank (TSX:TD) just widely beat earnings.

Read more »

open vault at bank
Bank Stocks

The Smartest Banking Stock to Buy With $1,600 Right Now

| Adam Othman

Toronto-Dominion Bank (TSX:TD) is positioning itself as a compelling long-term dividend investment.

Read more »

data analyze research
Bank Stocks

This Canadian Financial Stock Down 16% Pays an Iron-Clad Dividend

| Andrew Walker

This bank stock took a big hit last year but is rallying in 2025.

Read more »

investment research
Bank Stocks

Is This Canadian Bank Down 8.5% Too Good to Pass Up?

| Andrew Walker

This Canadian bank now offers a 6% dividend yield.

Read more »

Retirees sip their morning coffee outside.
Bank Stocks

This Monthly Income Machine Yields 6.6% and Looks Like a Steal!

| Andrew Button

Monthly pay dividend stocks like First National Financial (TSX:FN) often have high yields.

Read more »

Bank Stocks

1 Magnificent Blue-Chip Stock Down 10% to Buy and Hold Forever

| Chris MacDonald

Here's why Bank of Nova Scotia (TSX:BNS) looks like a fantastic buy and hold opportunity for long-term investors right now.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

Is Scotiabank Stock a Buy Before May 27?

| Jitendra Parashar

With the next earnings just around the corner, here’s what investors should know about Scotiabank’s (TSX:BNS) recent run and future…

Read more »

Investor wonders if it's safe to buy stocks now
Bank Stocks

Is TD Bank Stock a Buy Before May 22?

| Jitendra Parashar

TD Bank stock is bouncing back strong in 2025, and here’s why you may want to consider it ahead of…

Read more »

customer uses bank ATM
Stocks for Beginners

How to Approach CIBC Stock in 2025

| Amy Legate-Wolfe

CIBC stock is one of the best banks out there, and yet it doesn't really get the attention it deserves.

Read more »

open vault at bank
Stocks for Beginners

3 Canadian Bank Stocks to Shield Against Market Downturns

| Amy Legate-Wolfe

Bank stocks are some of the safest to hold on to, but these three are the best out there.

Read more »

clock time
Bank Stocks

1 Magnificent Financial Stock Down 23% to Buy and Hold Forever

| Jitendra Parashar

This top TSX financial stock is trading well below its recent peak, but its long-term fundamentals remain rock solid.

Read more »

dividend growth for passive income
Bank Stocks

This Canadian Bank Pays 4.75% and Could Double Your Money by 2030

| Christopher Liew, CFA

A Canadian bank is a top pick for its lucrative dividend and potential to double your money in five years.

Read more »

stock research, analyze data
Bank Stocks

Where Will Brookfield Corporation Be in 4 Years?

| Jitendra Parashar

With strong earnings, big capital to deploy, and smart growth bets, Brookfield Corporation (TSX:BN) could be a long-term winner worth…

Read more »

woman looks out at horizon
Bank Stocks

This Canadian Bank Stock Down 14% is an Income Investor’s Dream

| Kay Ng

Scotiabank’s short-term stumbles have opened a window of opportunity for income investors to collect a juicy dividend.

Read more »

3 colorful arrows racing straight up on a black background.
Bank Stocks

I’d Put $7,000 in This TSX Stock Before it Explodes Higher

| Demetris Afxentiou

Are you looking for a superb stock that can provide decades of income growth? This TSX stock screams opportunity right…

Read more »

An investor uses a tablet
Bank Stocks

Where Will TD Bank Be in 2 Years?

| Amy Legate-Wolfe

TD stock has come under scrutiny over the last few years, but does the future look brighter?

Read more »

open vault at bank
Stocks for Beginners

Where Will Royal Bank Stock Be in 2 Years?

| Amy Legate-Wolfe

Royal Bank stock has long been a top stock, but can that last over the next two years?

Read more »

grow money, wealth build
Dividend Stocks

Here’s How Many Shares of Scotiabank Stock You Should Own for $2,000 in Annual Dividends

| Amy Legate-Wolfe

Scotiabank stock remains a top stock for dividends, so here's how much investors would pay for a $2,000 income stream.

Read more »

a man celebrates his good fortune with a disco ball and confetti
Stocks for Beginners

Where Will Royal Bank of Canada Be in 5 Years?

| Amy Legate-Wolfe

Royal Bank stock remains one of the top stocks on the market today – and still the largest by market…

Read more »

calculate and analyze stock
Bank Stocks

TD Bank: Buy, Sell, or Hold in 2025?

| Amy Legate-Wolfe

TD stock has been around for almost 100 years! Yet the last year hasn't been the best example of greatness.

Read more »

analyze data
Bank Stocks

Here’s Exactly How Many Shares of TD Bank You’d Need for $5,000 in Annual Dividends

| Andrew Button

You needn't invest a whole lot to get $5,000 in dividend income from Toronto-Dominion Bank (TSX:TD) stock.

Read more »

A worker drinks out of a mug in an office.
Bank Stocks

TD Bank Stock: Buy Now or Wait?

| Andrew Walker

TD Bank is up 12% in 2025. Are more gains on the way?

Read more »

open vault at bank
Stocks for Beginners

TD Bank vs. Royal Bank: How I’d Invest $15,000 Between Canada’s Banking Leaders

| Amy Legate-Wolfe

In the battle of the top bank stocks, which one comes out on top?

Read more »

Frequently Asked Questions

Why invest in bank stocks?

Quality bank stocks have a strong history of generating profits and managing crises, making them a great investment.

In addition to their strong performance, many of Canada’s top banks pay dividends, with payouts that increase over time. For Canadian investors looking to pocket a little extra from their stocks, dividends can help you buy more shares or more cash.

Finally, bank stocks can help diversify your investing portfolio. If you already have stocks in other sectors (mining, technology, energy), bank stocks could add much needed stability, as well as expose you to the gains in another sector.