RBC widens mortgage lead amid signs of housing revival

TORONTO Royal Bank of Canada has widened its lead in mortgages against rival lenders as the nation’s housing market shows signs of renewed vigour.

The bank’s domestic mortgage book grew 8.6 per cent in the fiscal first quarter, the biggest year-overyear jump in more than a decade. None of Canada’s other big banks has achieved such a fevered growth rate in almost two years, with Royal Bank grabbing a greater portion of the $992.4-billion mortgage market spread among the country’s five largest lenders. Among those companies, Royal Bank’s market share is now 27.4 per cent.

“It’s demonstrative of our investments both in digital and distribution and talent,” chief financial officer Rod Bolger said in a phone interview after Royal Bank reported first-quarter results. “We had been adding resources in the field while some of our competition was reducing their face-to-face advice.”

Royal Bank’s push comes as a rebound in housing takes hold. Home prices in some of Canada’s largest cities including Toronto have recently climbed to records amid a shortage of properties for sale. Including lenders outside the big banks, the nation’s mortgage market in December expanded 4.9 per cent from a year earlier to $1.63 trillion, Bank of Canada monthly data show. That marked a rebound from February 2019, when growth was the paltriest in 18 years.

Royal Bank has pulled further ahead of competitors including Toronto-dominion Bank and Bank of Montreal, and even extended its lead over Bank of Nova Scotia, which has been No. 2 in mortgage growth since the latter half of 2018. At Scotiabank, mortgage balances rose 5.3 per cent in the first quarter, the biggest increase in two years.

Royal Bank is the country’s largest mortgage lender, based on an average balance of $271.8 billion in the first quarter.

Bloomberg