Urban landscape owes a lot ot the banks

Opened in 1822, the Bank of Montreal is Canada's oldest bank. If it gets through the covid-19 financial disaster without touching its dividend, it will have gone 198 years without ever being forced to reduce its dividend. An enviable record but one that is not out-of-place in the Canadian banking world.

Buy a home and you may well find yourself dealing with one of Canada's big five banks. Housing and banking is a partnership with deep roots. But any big personal expense may send a Canadian to visit a bank. Banks are seen by many Canadians as almost a friend. Always there offering support in tough times.

But Canadian banks do more than just loan money. For instance, the Bank of Montreal has a very successful ETF investment arm. When a Canadian is born, the little baby may be given an RESP or Registered Education Savings Plan. During one's life, a Canadian may well save for their senior years by putting money aside in an RRSP or Registered Retirement Savings Plan. And when a Canadian dies, it may well be a bank that acts as the executor of the will.

Compared to U.S. banks, in size Canadian banks would be rated among the largest regional banks in the States. With a market capitalization of only $43.4B Cdn., about $32B U.S., BMO is dwarfed by the immense size of big U.S. banks like JP Morgan Chase with a market capitalization of about $336B U.S.

So, why are Canadian banks so successful? Many claim it is because the Canadian banks operate in a highly regulated environment which is much different than that found south of the border. On the surface all the regulations don't seem to work in the Canadian banks' favour. For instance, according to Morningstar the Canadian banks are forced by law to hold more risk on their balance sheets that their U.S. counterparts. But this, some argue, forces Canadian banks to act more fiscally responsibly.

The future of banking in Canada may be different than the history of banking in Canada. U.S. banks are trying to make inroads while Canadian banks are expanding south of the border. How these actions will play out is a big question with the role protectionism will play in the unfolding story an immense grey area.

Canada's banks are part of the fabric of the country

The Bank of Nova Scotia is the third largest Canadian bank with what many say is the largest international presence. The BNS has invested heavily in Latin America.  A move that many see as potentially a negative today.

Lots of Canadian seniors hold Canadian bank stock for the generous and dependable dividends. Those dividends can be very important in retirement. Today the BNS dividend is $3.60 annually resulting in a yield of 6.53% based on the present price of the BNS stock.

Founded in 1832, the BNS has gone 187 years without once missing or even reducing its dividend. In fact, the bank habitually does the reverse; it has increased its dividend in 43 of the last 45 years. Because of losses related to covid-19, it is feared investors will not see a dividend increase for three or four years. On the other hand, the bank promises  it will not cut its dividend. It says it will not break an almost two century long tradition.

Our largest park is now open

London's largest park, Springbank, is now welcoming visitors. The park is not crowded like some that one's reads about on the Internet. It's long trails are being used again but very lightly. Still, it is nice to see. The city is waking up; it is coming out of its covid-19-inflicted stupor.

This raccoon will get its water

I wish I had the pictures to tell the whole story. If you have ever wondered whether or not animals can engage in creative thinking, I have the answer: They can.

The urban raccoon was looking for a drink. The bird bath offered water but it was difficult to reach. After awkwardly drinking while hanging from the bowl for a few minutes, the raccoon climbed a nearby tree, climbed out on a limb over the bird bath and, when well out towards the end of the branch, it sagged and the raccoon hopped down to the bird bath and to the water

Years ago, in the late '60s, I there was a course at the University of Windsor that taught animals were incapable of true thinking. I raised an example of an action similar to this raccoon's, which, by climbing a tree and moving away from the goal (water in the bird bath), seems to be taking an approach requiring creative and not instinctive thinking.

The professor got angry and banished any more questions of that ilk. He used bluster to hide the fact that he had no ready answer: animals might well think and creatively too.

Scooters are for tricks

I believe it was built as a skateboard park but now it's used by young people with scooters. I had no idea that high-flying tricks could be done with scooters but clearly they can. And the nice thing about the park is that it naturally encourages social distancing. Only one athletic scooter trickster is allowed on a ramp at any one time. It's a covid-19 safe activity. Hmmm. Where did I put my scooter?

Keeping our urban world functioning

Keeping an urban region running smoothly is not just about repairing roads and bridges doing all on the taxpayers' dollar. Keeping our stock of residential structures sound is also important and this expense falls on the home owner, as it should.

Our garage door is now approaching 40-years-in-age. It is painted wood not aluminum like those available today. Its motor is new, replaces last fall, and its rollers and seals are replaced when necessary. Four rollers were replaced today and the seal that repels mice was repaired.

I spoke with the repairman from afar. Covid-19 rules of social distancing were in force. I trusted him to do a good job and the company he works for will email me a bill. I will pay it electronically.

It is not often considered but living in a city provides services like garage door maintenance at a very reasonable cost. The business is located no more than ten minutes or so from my home. Travel costs are minimal. Not so if one lives in the country. There are advantages to city living that often go unnoticed.

163 unbroken years of dividends

Canadian banks are amazing. TD Canada Trust has an unbroken record of dividend payments going all the way back to 1857. That's right it has not missed a dividend, or cut the payment, in 163 years. And TD Canada Trust is not the only Canadian bank with bragging rights in the dividend area.

Canada's oldest bank, the Bank of Montreal, hasn't missed a dividend since 1829. That's 191 years! The Bank of Nova Scotia has a record going back almost as far: 1832. The Royal Bank, Canada's biggest bank, can only brag about not missing a dividend payment since 1870 or a mere 150 years.

And Canada's banks are not the only one's with bragging rights when it comes to paying dividends. BCE, also known as Bell Canada, hasn't missed a dividend payment since 1881, which is just a few years after Alexander Graham Bell invented the telephone. (An invention that Canadians lay claim to.) The Bell Telephone Company of Canada was incorporated in 1880 and started paying investors a year later.

Will covid-19 put an end to these companies' unbroken run? Not if they can help it. The banks have already stated that if they must they will issue new equity to cover expenses. All banks are stating publicly hat their dividends are safe. And Bell, well it is not known as the stock for widows and orphans for no reason. It's dividend may well be safe, too.

One last note on TD Canada Trust. The TD stands for Toronto-Dominion. That was the name of the bank when I was a boy. The Canada Trust tacked onto the TD came about when TD merged with a London, Ontario, based competitor. Trust companies are not banks but a very smart Londoners figured out that this should not stop trust companies from competing with banks. Canada Trust did was such a great competitor that TD merged with the trust company a few decades ago.

When covid-19 was still off-shore but threatening to invade, I got out of the market. After the virus struck and the stock market crashed, I bought back in but this time I filled my portfolio with dividend paying, oh-so-trustworthy Canadian companies. Banks, utilities, communication businesses and pipelines make up a big part of my investments. I may lose money but my income should be relatively safe.

If these Canadian companies cut, or worse miss, a dividend then we have more to  worry about than the stock market.