TD Joins RBC Atop Ranking of Canadian Fixed Income Dealers

(Bloomberg) -- Toronto-Dominion Bank has bridged the gap to Royal Bank of Canada after years of the latter’s dominance in Canadian fixed income, a Greenwich Associates survey of investors showed.

The capital markets arms of Canada’s largest lenders are tied atop a ranking of dealers prepared by the Stamford, Connecticut-based research firm after conducting 190 interviews with 81 institutional investors active in Canadian fixed income. RBC Capital Markets ranked higher in estimated market share, while TD Securities came first in the so-called Greenwich Quality Index, which measures relationship quality.

“TD has always had a great credit team and they’ve really stepped up the rates side of the business” this year, Peter Kane, a principal at Greenwich Associates, said in a phone interview. “That’s brought them to knocking on RBC’s door and vying for first position.”

The two leaders shared the top spots across most fixed income products, yet RBC continued to stand out in interest-rate derivatives, the study showed. RBC and BMO Capital Markets, which came third overall, were leaders in fixed-income research, while Desjardins Capital Markets led in estimated market share in Canadian government bond trading.

“It’s been a long journey,” said Moti Jungreis, head of global markets at TD Securities. “It took years to build trust with clients and we’re going to continue to build on this momentum.”

The interviews conducted by Greenwich took place between February and May this year. Investors estimated the amount of business allocated with each dealer and rated the quality of the service they got.

“We take a global view of everything we do, but our investments in people and technology in delivering an exceptional client experience in our home market of Canada remains very important to us, ” Jonathan Hunter, global head of fixed income, currencies and commodities at RBC Capital Markets, said.

TD has come level with RBC at a time bond investors are finding it harder and harder to make money. The Bank of Canada increased interest rates four times since the middle of last year, leaving the Bloomberg Barclays Canada Aggregate Total Return Index down 0.5 percent this year, on track for its worst return since 2013.

TD is a close second behind RBC in a Bloomberg ranking of underwriters of combined government and corporate bonds in Canadian dollars, which excludes self-led deals. RBC has held the top spot since Bloomberg started collecting the data in 2007.

“RBC is still the gold standard,” Greenwich’s Kane said of his firm’s survey. “TD has done a fantastic job and whether they’ll be able to continue to manage that in the face of probably increased competition from RBC will be very interesting.”

To contact the reporter on this story: Maciej Onoszko in Toronto at monoszko@bloomberg.net

To contact the editors responsible for this story: Christopher DeReza at cdereza1@bloomberg.net, Allan Lopez

©2018 Bloomberg L.P.