Canada’s commercial banking sector finances the economy by collecting deposits from households and businesses and redistributing them as credit: mortgages, personal loans, lines of credit, and corporate financing.
In 2025, it generates $490.4B in revenue, posts a 31% profit margin, and employs over 308,000 people across 113 institutions.
These results stem from both the interest rate increases since 2020, which boosted interest income, and an accelerated shift toward fee-based income (cards, digital services).
Supported by a globally recognized prudential framework and a robust regulatory system, the sector offers resilience that attracts foreign investors.
The ongoing market consolidation also creates opportunities for targeted acquisitions by institutions looking to expand their portfolios or integrate new technologies.
A compound annual growth rate (CAGR) of 13.9% over five years places the industry among the country’s leading financial drivers despite a volatile economic environment.
Source : IBISWorld
Total value of financial products generated by commercial banks.
Share of revenue converted into earnings before interest and taxes, reflecting high operational efficiency.
Five-Year Average Annual Revenue Growth, driven by rising interest rates and strong credit demand.
Interest rate cuts by 2026 are expected to support loan demand, though they may slightly compress interest margins; the sector will thus rely on higher volumes and fee-based services to maintain profitability.
At the same time, the digital transformation—including widespread mobile adoption and AI for credit scoring and fraud prevention—requires ongoing investment, while competitive pressure from fintechs and credit unions pushes banks to enhance the customer experience.
Finally, ESG criteria are playing an increasing role in capital allocation: major institutions are committing to fund the energy transition and to strengthen cybersecurity in order to protect growing volumes of sensitive data.
In this environment, consolidation and tech alliances are expected to continue, all while maintaining a strong regulatory foundation to ensure system stability.
Source : IBISWorld
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