BMO BMO bank analyst Sohrab Movahedi ranked his sector by ability to adjust to rising interest rates
“We assess the rate sensitivity on the liability side by looking at deposit composition, re-pricing characteristics, funding flexibility, and deposit costs across the “Big 6″. Since not all bank balance sheets are structured the same, this analysis should provide some insight to investors trying to understand how “Big 6″ funding costs will shift with higher rates. Overall, our scorecard analysis leads us to conclude that RY and TD (both Market Perform rated), our two top-scoring banks, are better positioned to preserve deposit margins in a rising rate environment … TD and RY score highest in our liability rate sensitivity scorecard (see Exhibit 4) and have more levers to defend their deposit costs, given their relatively higher core/customer deposit concentration, better funding flexibility, lower wholesale funding re-pricing risks, and lower deposit costs. On the other end of the spectrum, BNS (Mkt rated) is more vulnerable to rising rates on the liability side, reflecting its higher loanto-deposit ratio and relatively more expensive cost of deposits”