Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal, flush with about $18 billion in excess capital and a currency that's at near parity with the U.S. dollar, favor building from within to snapping up troubled banks south of the border.

"Most of our focus is on just building the business through organic growth in a market that we think is going to recover," Bank of Montreal Chief Executive Officer William Downe told investors at a conference in Montreal.

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