RY has been one of the best operators in the Canadian banking sector over the last few years. The company has demonstrated some of the most consistent track records in the space. As a result, it has mostly traded at a premium valuation.
On the other hand, we have been a fan of BNS over the years, given its significant discount in terms of valuation and its previous geographic diversification, while its operating results are largely decent. That being said, the upside potential from multiple expansions at BNS is not as attractive as it used to be, although if its strategic focus on US operations improves, we could see multiple expansion. For now, we would stick with RY but would be open to revisiting the switch if the valuation gets to attractive levels in the future.