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Scotiabank vs Royal Bank of Canada

Side-by-side credit pricing comparison from Pillar 3 disclosures.

Last updated: March 2026 · Data source: public Pillar 3 disclosures
Verdict:

On a representative BBB+ EUR 25M 5-year term loan, Royal Bank of Canada is the cheaper lender by 22bp in minimum spread. For a EUR 25M facility, that's EUR 55,639 per year.

Bank profiles compared

Metric Scotiabank
Canada		 Royal Bank of Canada
Canada
IRB approachMixedMixed
Cost-to-income54.5%43.0%
Effective tax rate27.5%21.0%
Avg corporate PD1.27%2.34%
Avg LGD unsecured36.6%37.0%
Avg LGD secured20.0%20.0%
Funding spread (bp)15bp15bp
Corporate EADEUR 284bnEUR 464bn

Sample RAROC: BBB+ EUR 25M 5Y term loan

Both banks priced on the exact same deal — 150bp spread, 20bp commitment fee, 60-month maturity. Higher RAROC means the bank earns more from this deal. Lower min-spread means the borrower gets a better rate.

Component Scotiabank Royal Bank of Canada
Annual revenueEUR 385,000EUR 385,000
Operating costEUR 154,000EUR 154,000
Expected lossEUR 28,750EUR 28,750
Capital required (FPE)EUR 2,451,320EUR 2,451,320
RAROC (after tax)7.06%7.70%
Min spread for 12% RAROC261bp239bp
This is just one sample deal.

Your actual portfolio has different ratings, sizes, maturities, and collateral. The cheapest bank for one deal isn't always cheapest for another. Upload your real facilities and OpenRAROC will run the same calculation on each, against Scotiabank, Royal Bank of Canada, and 57 other banks.

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FAQ: Scotiabank vs Royal Bank of Canada

Which bank is cheaper on corporate credit: Scotiabank or Royal Bank of Canada?
On a BBB+ EUR 25M 5-year term loan, Royal Bank of Canada requires a minimum spread of 239bp to reach a 12% RAROC hurdle, versus 261bp at the other bank — a difference of 22bp on the same deal.
How do Scotiabank and Royal Bank of Canada compare on corporate PD?
Scotiabank reports an EAD-weighted corporate PD of 1.27%, while Royal Bank of Canada reports 2.34%. The gap reflects differences in obligor mix and geography rather than underwriting quality.
How do the two banks differ on IRB approach?
Scotiabank uses Mixed and Royal Bank of Canada uses Mixed. The IRB approach determines whether internal LGD models or supervisory LGDs apply, which materially affects capital required on every corporate facility.
What deal is used in this comparison?
A single standardised facility: BBB+ rated, EUR 25M drawn on a EUR 30M commitment, 5-year tenor, 150bp spread, 20bp commitment fee. Both banks are priced on this exact deal using their own disclosed Pillar 3 parameters.