Canadian financial services outperform peers: study

Canadian financial services companies outperformed their peers over the past five years, according to a new report by Mercer Oliver Wyman released at last week’s World Economic Forum.
The study notes, “North America has outperformed the global SPI (shareholder performance index) average over the past five years, with Canadian firms performing particularly well as a result of low volatility and strong returns.”
Overall, the global market value of the financial services industry grew by 19% in 2004 to reach a record US$7.5 trillion, which corresponds with predictions made by CEOs surveyed last year by Mercer Oliver Wyman.
For 2005, CEOs predict the industry will grow at three-times the rate of the economy, and that merger and acquisition activity will increase.
However, the report also notes that the property & casualty industry may lag other sectors. Compared with strong growth in life insurance, “growth will be more challenging in p&c insurance, where top-line revenues are likely to stagnate”.
Of note, diversified financial institutions produced below-average returns in 2004, particularly on the back of negative shareholder performance on the part of European bancassurance companies. The report notes that as market value has moved from Europe to North America, it has also shifted from diversified financial institutions to retail-oriented banks.