Calgary is the third largest city in Canada and one of the important financial centers in the country. The city has developed into a hub for the investment banking industry thanks to its energy and natural resources expertise. As energy companies flock to Calgary for its proximity to Canada’s oil and gas heartland, major investment banks have followed suit by setting up offices there. This article will provide an overview of the investment banking landscape in Calgary.
Calgary is home to major Canadian banks’ investment banking divisions
Calgary hosts the headquarters of several major Canadian banks, including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce. The big banks all operate large investment banking teams out of Calgary to tap into the city’s strength in energy. They provide services like underwriting, mergers and acquisitions advisory and equity research focused on the oil and gas sector. Local investment banks also maintain strong presence in the city, such as Peters & Co., Cormark Securities and FirstEnergy Capital. In addition, the Calgary offices of global banks like Goldman Sachs and Morgan Stanley also house investment bankers covering the energy industry.
Calgary investment banks focus on oil and gas sector expertise
The bread and butter of Calgary’s investment banking industry is the expertise in the oil and gas sector. Bankers in the city have established close relationships with major energy companies headquartered in and around Calgary, such as Suncor, Cenovus, Enbridge and TC Energy. This allows them to win lucrative mandates on financings and strategic transactions for energy firms. Bankers in Calgary tend to specialize in certain subsectors like exploration & production, midstream infrastructure or oilfield services. The deep industry knowledge enables them to provide insightful advice to energy clients.
Calgary competes with Houston as an energy finance hub
Within North America, Calgary competes directly against Houston, Texas as the energy finance center. Houston’s investment banking sector is much larger in terms of overall revenue and headcount. But Calgary offers proximity to oil sands operations and Canadian shale basins, allowing bankers to develop local expertise. In recent years, Calgary has attracted more global banks seeking to build up energy investment banking, including the likes of Credit Suisse, Barclays and Wells Fargo. Still, Houston has far greater breadth and depth of banking offerings for energy firms.
Oil price volatility presents challenges for Calgary i-banks
While the energy focus gives Calgary investment banks unique positioning, it also comes with the downside of volatility. When oil and gas prices decline, as they did sharply in 2015 and 2020, capital markets activity dries up and Calgary’s investment banking revenues take a hit. Some firms trim headcount while others relocate bankers to more stable financial centers. However, the top energy bankers tend to stick around Calgary, confident that commodities markets will eventually rebound. The most seasoned Calgary bankers have the experience of riding out several boom-and-bust cycles.
Calgary investment banks support local startups and cleantech
Beyond oil and gas, Calgary investment bankers also increasingly support local technology and clean energy startups. The city is home to a growing fintech ecosystem, with both homegrown startups and major banks’ innovation hubs. In renewable energy, Calgary has seen some high-growth companies in wind, solar, geothermal and biofuels. Though earlier stage, these sectors represent growth opportunities for Calgary’s investment banking industry as it looks to diversify beyond traditional oil and gas strength.
Calgary has established itself as the center for energy finance in Canada, with major banks building elite investment banking teams to serve the local oil and gas sector. It offers deep expertise in energy finance, though remains heavily exposed to commodity price swings. Investment banks in Calgary are also looking to tap into emerging sectors like fintech and cleantech.