Canadian Mining Sector Review: Top Picks and Insights from Scotiabank Analyst

Scotiabank analyst Orest Wowkodaw describes Q2/25 mining earnings as "The Good, The Bad and The Ugly", highlighting the importance of operating efficiency. Top picks include CCO, CS, and FCX. BMO energy analyst Jeremy McCrea identifies top-performing E&P stocks in Q2/25, including Surge, Paramount, and Whitecap. BofA Securities chief strategist Savita Subramanian sees cracks in the megacap leadership of US markets, similar to the 1990s tech bubble.

Bank of Montreal (BMO) and Royal Bank of Canada (RBC) have initiated the sale of their joint venture, Moneris, with a potential valuation of up to $2 billion [1]. Moneris, one of Canada’s largest payment processors, handles one in every three business transactions nationwide, serving approximately 325,000 merchants and generating nearly $700 million in annual revenue [3].

The sale of Moneris reflects broader trends in capital allocation and technological disruption within the financial sector. Banks are increasingly offloading non-core assets to focus on high-margin banking services, making payments businesses attractive targets [2]. Potential buyers include payments technology firms such as Fiserv, Adyen, or Stripe, and private equity groups like KKR or Blackstone [2]. These buyers are drawn to Moneris's recurring revenue stream and its dominant market position in Canada.

However, the success of the sale hinges on regulatory scrutiny. Canada's Competition Bureau may limit buyers or require carve-outs to address antitrust concerns [2]. The transaction underscores the evolving dynamics of the payments sector in North America, with investors assessing the long-term value of recurring revenue models and AI-driven innovation [2].

For RBC and BMO, the Moneris divestment aligns with a broader strategy to streamline operations and redirect capital toward higher-growth areas such as digital banking, wealth management, and AI-driven financial services [2]. The banks' decision to retain advisory roles with PJT Partners and their own investment banks suggests a calculated approach to maximizing value while maintaining flexibility.

The Moneris sale raises critical questions about the future of the Canadian fintech sector. Will the divestment spur further consolidation, creating a more concentrated market? How will the influx of private equity capital reshape innovation in payments? The 2016 sale of Moneris USA to Vantiv (now part of Fiserv) offers a historical precedent, allowing Vantiv to expand its U.S. merchant base while enabling RBC and BMO to focus on core banking [2].

Investment implications include opportunities in payments tech stocks, private equity vehicles, and Canadian banks. However, risks remain, such as a failed sale forcing RBC and BMO to invest heavily in modernizing Moneris's infrastructure, or regulatory hurdles delaying the transaction.

The Moneris sale is more than a corporate transaction—it is a microcosm of the payments industry's evolution. As banks offload legacy assets and private equity capital floods the sector, the balance of power is shifting. For investors, the key lies in identifying the winners in this new landscape: firms that can leverage Moneris's infrastructure to drive innovation, or those that can capitalize on the recurring revenue model that has made payments a gold standard for capital efficiency.

References:
[1] https://www.ainvest.com/news/rbc-bmo-sell-canadian-payments-joint-venture-2-billion-2508/
[2] https://www.ainvest.com/news/strategic-divestment-payments-analyzing-rbc-bmo-moneris-sale-implications-canadian-fintech-sector-2508/
[3] https://www.reuters.com/legal/transactional/rbc-bmo-planning-sale-2-billion-canadian-payments-venture-sources-say-2025-08-14/