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Canada’s most valuable brands include a lot of banks and two telecom rivals

Consulting firm Brand Finance Canada released its list of Canada’s top 50 brands earlier this week, and we’d bet the country’s banking executives are feeling pretty pleased with the results. TD Bank’growing influence in U.S. markets helped it to nab the top spot with an estimated brand value of $10.4 billion, and Canada’s other big banks were close behind. That said, this list skews more corporate and less consumer than a similar ranking from Interbrand, suggesting this stuff isn’t an exact science. Interbrand’s top 10 included Shoppers Drug Mart, Tim Hortons and Lululemon, companies that Brand Finance placed at 20, 25, and 26, respectively.

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50 Most Influential 2012: a ranking of Toronto’s top tycoons, backroom operators and supersize egos

50 Most Influential

The people driving the agenda for the city are more likely to come from outside local government than inside. This was the year our premier, rendered virtually impotent by a minority legislature, up and quit without warning. And our mayor, who listens to no one and refuses to build consensus on council, has created a city hall power vacuum.

What follows is Toronto Life’s list of the real influence peddlers—the people who, either publicly or behind the scenes, have had the greatest impact on the city. We looked for people whose power was broad enough to be felt across different sectors, or else so palpable in their immediate field that it somehow changed things for the rest of us. We looked for people whose ability to alter public opinion, raise money, rally troops or simply get stuff done was both formidable and undeniable. The result is a carefully calculated and highly opinionated look at power in the city in 2012.

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Canada’s banking boom has a downside: “shenanigans” from the big banks

Canada’s biggest banks are basking in good news lately: profits are up, as are payouts to shareholders, and (unlike their European and American counterparts) the largest lenders are expanding their workforces. However, those boom times aren’t trickling down to the common folk, according to the Globe and Mail’s Rob Carrick. Late last week, he decried the uptick in “bank shenanigans” since the tough times of the 2008 recession:

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What bubble? RBC says Toronto condo’s market won’t crash

The city’s condo boom may be keeping both Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney up at night, but at least one high-level economist is contradicting both (because when has anyone ever agreed about the real estate market?). Robert Hogue, a senior economist at the Royal Bank of Canada, insists there’s no bubble in Toronto and, while the market will likely see a bit of cooling, there won’t be an epic condo crash. In a report released today, Hogue argues that demand for housing remains strong—after all, there are roughly 38,000 net new households in the Greater Toronto Area each year and they have to move in somewhere.

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Reasons to Love Toronto: No. 1, because boom times are back

Reasons to Love Toronto: No. 1, Because boom times are back

Toronto is the rare city experiencing a construction frenzy (185 high-rises, to New York’s 80), a hiring spree (in the last quarter of 2011, while Bank of America and Citigroup fired almost 10,000 staff, our eight biggest banks added 2,800), and a surge in swaggering confidence. As our reputation for stability spreads, the world has begun to look at us differently. Many of the units in those 185 towers are owned by wealthy foreigners who see Toronto as a smart investment.

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Three banks—and one surprise—on the list of Canada’s 10 best brands

Every two years, consulting firm Interbrand puts out a “Best Canadian Brands” list and the 2012 list of winners has a lot of old standbys (i.e. media companies, banks and Tim Hortons). Much-vaunted financial institutions like Toronto Dominion Bank (which took the top spot), Royal Bank of Canada (number three) and Scotiabank (number five) are all back, while cult yoga pants purveyor Lululemon Athletica broke the top 10 for the first time, its $3.25-billion brand value making it the fastest-growing brand in the country. Finally, hats off to Research in Motion’BlackBerry brand, which managed to hold on to the number four spot—though the fine print acknowledges Interbrand arrived at that number in late 2011, and a lot has happened since then.

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Editor’s Letter (June 2012): Sarah Fulford on the reasons to love Toronto

Sarah FulfordLast winter, on a week-long escape to Florida, I noticed something surprising: TD and Royal Bank signs along the highway near Sarasota, interspersed among the various Targets, Barnes and Nobles, and IHOPs. What was going on? It turns out Canadian banks have been aggressively expanding into the U.S. since the recession, snapping up struggling consumer banks. TD now has more branches in the States than it does in Canada. Everywhere I looked, it seemed, a little piece of Toronto was occupying the landscape—unexpected outposts of Bay and King planted along the strip malls of America. Perhaps because I’m so used to seeing American mega-stores colonizing the Toronto streetscape, I found the role reversal refreshing. A sign, I thought, of Canada’s new place in the world.

Then I returned home and was bombarded by talk of the new age of austerity. Ontarians are being told that the next decade will be characterized by tough decisions about education, old-age benefits, health care. We’ll have to decide what we value most, where we want to spend and what we can cut, and we’ll have to cook up some new revenue sources, like casinos. And yet I’m having a hard time squaring all this austerity talk with what I see in Toronto. All around me are signs that the boom times are back.

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Banks will probably stop dropping crazy amounts of cash on blockbuster deals 

At a conference this week, Royal Bank of Canada CEO Gordon Nixon explained that banks are simply no longer able to spend absurd amounts of money on one big deal—just absurd amounts of money spread out over lots of smaller deals. According to Nixon: “The ability to do capital-dilutive transactions from a regulatory perspective is just about nonexistent.” Translation: tougher regulations and higher capital standards have made it nigh-impossible to replicate the blockbuster deals that characterized the oughties (for instance, in 2007, TD Bank spent $8.3 billion to buy a New Jersey bank to support its big push into the American market). Now financial institutions must hunt for smaller, strategic acquisitions. Struggling banks in Europe are the likeliest targets—but we’re sure that if the banks have the money, they’ll figure out a way to spend it. [Globe and Mail]

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Insurance brokers vs. banks: insurers call foul on RBC and BMO 

Canada’s biggest banks seem to be the subject of a strange amount of scandal of late. This month alone, a massive lawsuit was leveled against Royal Bank of Canada, ex-RBC advisers admitted to forging client signatures and a former Bank of Montreal adviser was banned from working in securities. Now, there’s a spat with Canadian insurance brokers, who lodged a complaint with the Office of the Superintendent of Financial Institutions (yes, it’s a real office) and alerted Finance Minister Jim Flaherty that RBC and BMO are openly disregarding rules against promoting insurance on their websites. (Under the Bank Act, banks are allowed to own separate insurance companies, but they’re prohibited from selling or marketing insurance.) Naturally, big insurance wants big banking as far away from its business as possible, and have lobbied hard to have rules in place to keep banking and insurance operations distinct. But large-scale financial institutions are still pushing hard into the territory—the insurance biz made up 10 per cent of RBC’s total profits in the three months ending January 31—and with big, big dollars at stake, we don’t expect them to stop. To the insurance brokers of Canada, we wish you luck. You’ll likely need it. [Globe and Mail]

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Former BMO adviser passed along wads of cash to a lawyer convicted of insider trading 

Looks like Royal Bank isn’t the only major financial institution with a shady employee or two. A BMO Nesbitt Burns financial adviser, Sandy Bortolin, has been banned from working in securities after years of highly suspicious behaviour (i.e., passing along envelopes full of cash in a money-laundering scheme) came to light. The Investment Industry Regulatory Organization of Canada ruled Bortolin acted improperly in dealings with Stan Grmovsek, a former client now in jail for fraud, insider trading and money laundering. (Grmovsek received insider-trading tips about pending takeover deals from a law school classmate and laundered the money through Bahamas bank accounts set up by Bortolin). The IIROC says Bortolin should have been suspicious about Grmovsek’s activities and reported them to management, and accuses him of misleading both BMO and its investigators. The adviser was fired from BMO in 2009, but he’ll have to come up with some money, somehow: the IIROC has ordered him to pay $100,000 in costs along with a massive $500,000 disgorgement. Where’s an envelope full of cash when you need one? [Globe and Mail]

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Ex-Royal Bank advisers admit to forging client signatures—for 10 years 

More shady shenanigans in connection with the Royal Bank of Canada: the Toronto Star reports that two Toronto-based investment advisers were fired from RBC Dominion Securities after admitting they faked client signatures for over a decade. Mark Steven Rotstein and Jessica Elisabeth Zackheim, who now work at Scotia McLeod, say they signed off on a range of documents, like trading authorizations and risk disclosure forms, to give clients a break from pesky paperwork. Since the trickery saved clients’ time and didn’t result in any financial harm, they thought, who would mind? Er, the Investment Industry Regulatory Organization of Canada, for one. The body made a deal with Rotstein and Zackheim that includes fines of $250,000 and $50,000, respectively, and a year’s suspension (we trust there were witnesses present when they signed the agreement). [Toronto Star]

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Tony Keller: why the obvious fix for the country’s collective pension problem is being ignored

Work Till You DieLast fall, the Royal Bank of Canada—with $27 billion in annual revenue, $752 billion in assets and 74,000 employees, the biggest and most prudent bank in the world’s safest banking system—announced that new employees would no longer be eligible to receive what is probably the company’s most important workplace benefit: the comprehensive retirement insurance plan. It insures the Royal’s Canadian employees, or at least those hired before January 1, 2012, against all sorts of risks. The risk of reaching retirement age at a time when stock markets are down, or interest rates are low. The risk of outliving one’s retirement savings. Inflation risk. Risks you’ve probably never even heard of, like reinvestment risk and liquidity risk. Even the risk of earning below market returns.

This generous program wasn’t unique to the Royal. Many employers, particularly big companies, once offered similar plans. Some still do, though their numbers are dwindling. You may be wondering, “Why have I never heard of retirement insurance?” You have. It’s called a pension.

We’re heading for a pension crisis. The federal government says so. The opposition says so. Most provinces say so. The library shelves of the land groan beneath the weight of studies. The first class of baby boomers hit 65 this year, and we’re still not ready. The economist Michael Wolfson, formerly the assistant chief statistician of Canada and now at the University of Ottawa, estimates that half of all Canadians born between 1945 and 1970 who have average career earnings between $35,000 and $80,000 are facing a drop of at least 25 per cent in their post-retirement standard of living. Which is perhaps not surprising given that most of us don’t have a pension plan.

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Royal Bank plays off a major lawsuit like it’s no big deal

(Image: Ian Muttoo)

The way the Royal Bank of Canada is acting, you’d think the seriously massive lawsuit brought against it by a U.S. regulator is nothing to worry about. Just after news of the lawsuit broke earlier this week, the bank put the finishing touches on a $1.1 billion deal to buy the remaining half of a joint venture called RBC Dexia Investor Services. Then, yesterday, RBC’s lawyer said it would reject a settlement with the Washington-based Commodity Futures Trading Commission—and may already have done so, according to the Toronto Star—suggesting that the bank’s top brass is pretty confident they’ve done nothing wrong. Or that they have really good lawyers. Read the entire story [Toronto Star] »

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High (finance) drama between Royal Bank and a U.S. regulator

(Image: Ian Muttoo)

A lawsuit filed yesterday against Royal Bank of Canada could make for major scandal: a U.S. regulator is accusing Canada’s largest bank of conducting hundreds of millions of dollars in sham futures trades. The Commodity Futures Trading Commission says RBC engaged in something called “wash trading,” coordinating with subsidiaries to buy and sell shares in simultaneous transactions that cancel each other out. (It’s a good way to dodge taxes, which is probably why it’s illegal in the United States.) The bank fired back in a statement, saying it “proactively contacted the exchange to seek its guidance” before the trades were made and was given the go ahead. Not quite, claims the CFTC, who says the bank lied about the true nature of the trades. One fact not up for debate: RBC shares were down nearly three per cent in New York today. Read the entire story [Canadian Business] »

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Ludicrously low rates are going up, signalling an end to the mortgage wars (maybe) 

The rock-bottom mortgage rates that have characterized Canadian real estate of late are going up, which could help ease  Toronto’s bidding war insanity. The Globe and Mail reports Bank of Nova Scotia has stopped offering its 2.99-per-cent discount mortgage rate, while Moneyville says both Royal Bank of Canada and TD Bank will do the same this Thursday. But don’t expect the market to suddenly ease—Moneyville talked to an analyst who sounded rather befuddled by what it all means. “Is it the end of low rates, and are rates going to start rising a lot?” he wondered. “Probably not. But who knows?” Add it to the list of Toronto real estate mysteries. Read the entire story [Moneyville] »

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