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

dividends can compound over time
Bank Stocks

Is Scotiabank Stock a Buy While it’s Below $70?

| Jitendra Parashar

Here’s why the recent dip in Scotiabank stock could offer long-term investors more value than risk.

Read more »

happy woman throws cash
Bank Stocks

Got $5,000? 5 Financial Stocks to Buy and Hold Forever

| Jitendra Parashar

Here are five of the best Canadian financial stocks you can buy today and hold for years to come.

Read more »

Hourglass projecting a dollar sign as shadow
Bank Stocks

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

| Andrew Walker

TD Bank is up 14% in 2025. Are more gains on the way?

Read more »

ETF stands for Exchange Traded Fund
Bank Stocks

Here’s How Many Shares of ZWB You Need to Earn $500 in Monthly Dividends

| Tony Dong, MSc, CETF®

This BMO ETF holds all six big banks and uses covered calls to enhance monthly income.

Read more »

coins jump into piggy bank
Bank Stocks

Better Banking Stock: Bank of Montreal vs Bank of Nova Scotia?

| Brian Paradza, CFA

2025 tariff wars: BMO stock’s U.S. anchor vs BNS’s dividend yield gamble. Pick one – or both Canadian bank stocks?

Read more »

Canadian dollars in a magnifying glass
Bank Stocks

Outlook for TD Bank Stock in 2025

| Andrew Button

Toronto-Dominion Bank (TSX:TD) stock is really rallying in 2025. What's next?

Read more »

dividends grow over time
Bank Stocks

Build Enduring Wealth With These Canadian Blue Chips

| Jitendra Parashar

Declining interest rates make these top blue-chip stocks even more attractive to buy now and hold for the long term.

Read more »

ways to boost income
Bank Stocks

If I Could Only Buy 2 Stocks in 2025, I’d Pick These

| Jitendra Parashar

Expectations of additional rate cuts may give these top Canadian bank stocks a lift, making them some of the best…

Read more »

customer uses bank ATM
Bank Stocks

The Canadian Bank Stock to Buy in a Trade War

| Joey Frenette

National Bank of Canada (TSX:NA) could still do well in a turbulent 2025.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

Is BNS Stock a Buy While it’s Below $70?

| Andrew Walker

Bank of Nova Scotia is down 10% in 2025. Is the stock oversold?

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

The Best Canadian Dividend Stocks to Buy and Hold Forever in a TFSA

| Christopher Liew, CFA

TFSA investors can avoid the need to fly to safety during market turns by owning the best Canadian dividend stocks.

Read more »

sale discount best price
Bank Stocks

2 Canadian Bank Stocks to Buy at a Discount

| Adam Othman

These two TSX bank stocks are too cheaply priced to ignore if you want to increase exposure to the banking…

Read more »

Middle aged man drinks coffee
Bank Stocks

How I Achieved My 2025 Goal of $5,000 in Annual Passive Income

| Andrew Button

I got to $5,675 in annual passive income with dividend stocks like the Toronto-Dominion Bank (TSX:TD).

Read more »

ETF chart stocks
Bank Stocks

A Canadian Bank ETF I’d Buy With $1,000 and Hold Forever

| Tony Dong, MSc, CETF®

This ETF provides leveraged exposure to Canada's Big Six banks.

Read more »

a person looks out a window into a cityscape
Bank Stocks

Should You Buy TD Bank Stock While it’s Below $85?

| Adam Othman

Investing in a well-established bank stock trading at a cheap multiple can be an excellent way to put your money…

Read more »

a person watches a downward arrow crash through the floor
Bank Stocks

These Stocks Got Trounced by Tariffs, But the Damage Is Overdone

| Joey Frenette

TD Bank (TSX:TD) stock looks like a great deal, even as tariff threats look to hit.

Read more »

open vault at bank
Bank Stocks

Best Stock to Buy Right Now: TD Bank vs Royal Bank?

| Karen Thomas, MSc, CFA

TD Bank stock's earnings and reputation have been hit. Yet, it trades at higher multiples than Royal Bank.

Read more »

up arrow on wooden blocks
Tech Stocks

3 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

| Kay Ng

If you have a long-term horizon to invest, consider investigating these three growth stocks.

Read more »

open vault at bank
Bank Stocks

3 Canadian Bank Stocks to Shield Against Market Downturns

| Amy Legate-Wolfe

Bank stocks are sure to be long-term winners in Canada, but these three look ultra promising for investors.

Read more »

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

National Bank of Canada: Buy, Sell, or Hold in 2025?

| Amy Legate-Wolfe

This bank stock is an ideal option, but not just for a dividend. The company certainly has a lot more…

Read more »

Hourglass and stock price chart
Bank Stocks

What Veteran Investors Know About Timing the Market

| Kay Ng

Timing the market is tricky. Focusing on wonderful businesses for the long term may be a more reliable path to…

Read more »

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

Bank of Nova Scotia: Buy, Sell, or Hold in 2025?

| Demetris Afxentiou

Are you invested in, or considering to invest in Bank of Nova Scotia (TSX:BNS)? Here's a case to buy, sell…

Read more »

An investor uses a tablet
Bank Stocks

Better Banking Stock: Royal Bank vs TD Bank?

| Amy Legate-Wolfe

If you're looking at bank stocks these two are the best of the best, yet which edges out the other?

Read more »

ways to boost income
Bank Stocks

Should You Buy TD Bank Stock While it’s Below $90?

| Aditya Raghunath

Down 20% from all-time highs, TD Bank stock trades at a cheap multiple and should you deliver outsized gains in…

Read more »

A worker uses a double monitor computer screen in an office.
Bank Stocks

What to Know About Canadian Bank Stocks for 2025

| Andrew Button

Royal Bank of Canada (TSX:RY) is pricey by bank stock standards. Is it worth it?

Read more »

customer uses bank ATM
Bank Stocks

This Big 6 Bank Stock Stands Above the Rest

| Chris MacDonald

Let's dive into the outlook for Bank of Nova Scotia (TSX:BNS) and why this Canadian bank stock could be the…

Read more »

open vault at bank
Bank Stocks

Better Banking Stock: CIBC vs National Bank?

| Joey Frenette

CIBC (TSX:CM) and the big banks could be great bets this spring season.

Read more »

Canadian dollars in a magnifying glass
Bank Stocks

Best Stock to Buy Right Now: National Bank vs Bank of Montreal?

| Amy Legate-Wolfe

These bank stocks have a lot of similarities, but one might edge out the other depending on your portfolio.

Read more »

grow money, wealth build
Bank Stocks

Turn Your Savings Into a Passive-Income Powerhouse With 2 Stocks

| Jitendra Parashar

By investing in these two high-quality Canadian bank stocks today, you can build a steady stream of passive income while…

Read more »

open vault at bank
Bank Stocks

Canada’s Big Bank Stocks: How to Find the Best One for You

| Demetris Afxentiou

Canada's big bank stocks are among the best long-term options for investors to buy. But which big bank is right…

Read more »

ETF chart stocks
Bank Stocks

A Canadian Bank ETF I’d Buy With $1,000 and Hold Forever

| Amy Legate-Wolfe

Do you want a safe portfolio with growth and income? It won't be a risky investment when you have this…

Read more »

Canadian dollars in a magnifying glass
Bank Stocks

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

| Amy Legate-Wolfe

It's no secret that TD stock had a rough year. But with a dividend and strong income, could the price…

Read more »

dividends grow over time
Bank Stocks

One Magnificent TSX Stock Down 20% to Buy and Hold for Decades

| Andrew Button

TD Bank (TSX:TD) is launching a massive buyback program with its proceeds from selling Charles Schwab stock.

Read more »

Asset Management
Bank Stocks

Where Will Royal Bank of Canada Stock Be in 5 Years?

| Jitendra Parashar

Here’s why I expect Royal Bank of Canada (TSX:RY) stock to continue delivering strong returns to patient investors in the…

Read more »

dividend growth for passive income
Bank Stocks

1 Incredibly Cheap Canadian Growth Stock to Buy Now and Hold for Decades

| Amy Legate-Wolfe

This top stock is growing in many ways, including its dividend, making it a top growth stock to buy right…

Read more »

Paper Canadian currency of various denominations
Bank Stocks

TD Stock Has a Nice Yield, But This Dividend Stock Looks Safer

| Amy Legate-Wolfe

TD stock might seem like a great buy with its higher yield, but CIBC stock might be the better buy.

Read more »

Confused person shrugging
Bank Stocks

Is Bank of Nova Scotia Stock a Buy While it’s Below $71?

| Andrew Walker

Bank of Nova Scotia is down more than 8% in 2025. Is BNS stock now oversold?

Read more »

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

A Momentum Stock That’s Actually Still Quite Cheap

| Joey Frenette

CIBC (TSX:CM) stock looks like a cheap momentum bet for 2025.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Bank Stocks

Where to Invest Your TFSA Contribution for Maximum Growth

| Nicholas Dobroruka

Don’t sleep on the long-term growth potential that can come from maximizing returns in your TFSA.

Read more »

chart reflected in eyeglass lenses
Bank Stocks

Bank of Nova Scotia: Buy, Sell, or Hold in 2025?

| Kay Ng

If you’re looking for a steady income stream with moderate growth potential, Bank of Nova Scotia stock is a reasonable…

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.