Q: I am thinking of switching from TD to Royal Bank. Last quarter results were better. As well, I just read that Royal Banks has made a large acquisition that has been approved. Your thoughts. Thanks Steve
5i Research Answer:
Valuations are similar, but RY is a bit larger. Performance this year has been similar, with RY down a bit less. We are comfortable with TD's outlook, but generally defer to RY as the larger, safer bank if an investor only wants one. We would be OK with a switch but would not consider TD as a SELL overall. RY has been given approval to buy HSBC Canada, which adds small business customers and further increases its already-high market share. We would consider it a decent acquisition.