Who’s the largest holder of Canadian bank stock?

The answer is, the Canada Pension Plan. The CPP now holds 7,960,000 shares of the TD Bank. Last week, the TD Bank increased its dividend to $3.24 per common share, so the (gross) annual dividend income for our CPP from this holding is $25,790,400. That pays a lot of pensions!

In the past week, every major chartered bank except CIBC increased its dividend, for the second time in the past year, following strong showings in the last quarter. The smallest annual dividend our banks pay is now $2.52 per share. The TD and CIBC pay out well over $3 per share, and BMO’s increase brings its annual dividend to $2.96.

And, Canadians owning bank stocks receive dividends plus the dividend tax credit. Dividend income earned is taxed less than interest income from term deposits.

I am not an expert, but I do recommend that every person consider buying Canadian bank stocks as part of their Estate and investment planning.

This ad ran in the Richmond News on March 8, 2013.