Description of banks

Laurentian Bank is a Quebec based banks with activities that extend to
other regions in Canada. It was founded in 1846. The banks has 43 billion
in assets.

Manulife Bank Established in 1993, Manulife Bank of Canada (Manulife Bank)
was the first federally regulated bank opened by an insurance company in
Canada. It is a wholly-owned subsidiary of Manulife Financial. Residential
mortgages, are its bread and butter.

Tangerine description

Tangerine was launched as a virtual bank, ING DIRECT Canada, in 1997. In
November 2012, Scotiabank completed its acquisition of ING Bank, a
Netherdands based bank which had been impacted by the credit crisis.
Rebranded Tangerine, this is a no-fees bank.

Cost of Funds (COF)

Surprisingly the cost of funding for Laurentian and Manulife Bank was
significantly higher than Tangerine. This is surprising because at the
scale of the mid-large size banks you would expect efficiencies to be
optimized. However, Laurentian with a COF of 1.74 per cent compared to .67
per cent for RBC, this has an impact on its NIM and obviously on its
income.

This is surprising because at the scale of the mid-large size banks you
would expect efficiencies to be optimized. However, Laurentian with a COF
of 1.74 per cent compared to .67 per cent for RBC (Tangerine similar), this
has an impact on their NIM and obviously on its income.

Loan lease growth

Within the mid-large group, you can see how Laurentian has consistently
grown its loan portfolio since 2007. However, if you compare this to the
loan growth of RBC, you can see that the entire group has been
out-performed.

Net interest margin

The NIM for for Manulife and Laurentian is similar, dispite the higher COF
for Laurentian Bank. The explanation for Tangerine, which has a much lower
cost of funds, comparable to RBC, in fact, is due to the acquisition of ING
Canada by Scotia in 2012, which has impacted its cost of funds. Essentially
this has led to Tangerine having a NIM of 4.08 per cent. Double the NIM for
RBC in 2016.