Thursday, August 18, 2011

Tangible Common Equity of Canadian Banks as Bad as Europe's Worst

Is The Next Domino To Fall.... Canada?
As the chart below shows, which is a ranking of global banks by tangible common equity, lowest first, of the banks with a TCE ratio of under ~4% a whopping 30% are those situated in Canada, the same place where nobody thinks anything can go wrong, and which has been completely spared from the retribution of the bond vigilantes. Something tells us Canadian sovereign CDS, not to mention Canadian bank CDS, are both about to go quite a bit wider...

From the chart at Zerohedge

BankTCE ratio
Canadian Imperial Bank of Commerce2.84%
National Bank of Canada3.30%
Bank of Nova Scotia3.37%
Royal Bank of Canada3.43%
Toronto Dominion Bank3.60%
Bank of Montreal4.19%

Tangible Common Equity -- A ratio used to determine how much losses a bank can take before shareholder equity is wiped out. From: Investopedia

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