NEW YORK, NY -- (Marketwire) -- 06/19/12 -- The Canadian Banking Industry has continued to prove itself as among the world's strongest. Bloomberg Markets' second annual world's strongest bank rankings had four Canadian banks in the top 10. Also Canada has recently received Moody's Investors Service top AAA credit rating. Five Star Equities examines the outlook for companies in the Canadian Banking Industry and provides equity research on Royal Bank of Canada (NYSE: RY) (TSX: RY.TO) and The Bank of Nova Scotia (NYSE: BNS) (TSX: BNS.TO).
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During the most recent quarter Canada's five biggest banks posted profits of $6.55 billion, a four percent jump from the $6.28 billion a year prior. The Bank of Canada, in a recent semi-annual report, stated that Canadian banks' exposure to European debt is "limited." In the report it shows the total holdings of debt from Greece, Ireland, Portugal, Spain, and Italy of Canadian banks is approximately only eight percent of Tier 1 capital levels.
"The direct exposure of Canadian banks to the affected European countries is limited," the bank noted in its report. "However, should the crisis worsen and spread further across Europe, the impact on the Canadian financial system could be significant."
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Royal Bank of Canada reported net income from continuing operations of $1,563 million for the quarter ended April 30, 2012, down 7 percent from second quarter 2011 net income of $1,682 million. Canadian Banking net income was $937 million, up $42 million compared to last year.
Scotiabank reported second quarter net income of $1,460 million compared with net income of $1,621 million in the same period last year. Diluted earnings per share were $1.15, compared to $1.39 in the same period a year ago. Last year's earnings per share benefited 33 cents per share from the non-recurring gains. Return on equity remained strong at 18.6%.
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