Bank stocks versus GICs: Battle of the income titans
BNN Bloomberg
The big Canadian banks - darlings of retirement portfolios for delivering generous and consistent dividends - are losing their income-generating luster to once lowly guaranteed investment certificates (GICs).
Veritas Investment Research analyst Nigel D’Souza told BNN Bloomberg a move Tuesday by the federal banking regulator (the Office of the Superintendent of Financial Institutions or OSFI) to force banks to raise their cash requirements could crimp dividend payouts to shareholders.
Most Canadians who invest for retirement hold big Canadian bank stocks directly, in mutual or exchange traded Canadian equity funds, or in company pension plans. Even the Canada Pension Plan (CPP) owns stock in big Canadian banks.
The big banks; Toronto Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank of Commerce and National Bank of Canada have never missed or even lowered dividend payouts since Confederation.
