Breaking news: Scotiabank to buy ING

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The gods may be listening to brokers with channel lender Scotia announcing it has reached a definitive agreement to purchase ING Direct Canada.

"ING DIRECT has had proven success in meeting the needs of those Canadians who are not looking for the added services, advice and relationships provided by traditional banking channels,” said Rick Waugh, president and CEO of Scotiabank. “We recognize that success and are committed to keeping this unique platform.”

Brokers very much hope that "unique platform" includes maintaining ING’s connections with the channel.

Early indications are that Scotia will keep ING as a separate, largely autonomous entity.

In its statement Wednesday Scotia reiterated the following:

This deal “preserves ING Bank of Canada's (ING DIRECT) unique and successful model that offers specific value for self-directed customers as a distinct, wholly-owned subsidiary.”

The deal also “provides continuity for more than 1,100 employees and 1.8 million customers backed by Scotiabank, a strong, stable Canadian shareholder.”

The purchase is worth $3.126 billion in cash, and is expected to result in a net investment by Scotiabank of approximately $1.9 billion after deducting the excess capital currently at ING DIRECT.

This acquisition is subject to regulatory approvals. The bank is also announcing a public offering of 29 million common shares at $52.00 on a bought deal basis for gross proceeds of $1,508,000,000 to fund the acquisition.

For brokers, Scotia’s purchase helps to allay fears that one of the other big banks would buy ING and move it outside the channel. Scotia as a broker-friendly lender is more likely to stay put, say analysts.
 

  • Julia Krause on 2012-08-30 8:13:50 AM

    Hmmm... "Early indications are that Scotia will keep ING as a separate, largely autonomous entity." Just like they did with Montreal Trust, National Trust, and Maple Trust...? If you're a broker who loved ING's products & services, the way I did with Maple Trust, kiss it goodbye. Sad... :(

  • Kyle Green on 2012-08-30 9:29:16 AM

    Well Scotia basically merged Maple and BNS together on the broker side, I imagine they are more interested in ING's deposit capital because of the new international guidelines like Basel III than interfering with their broker channel.

  • DD on 2012-08-30 1:08:32 PM

    This is a real shame. We have done tons of business with ing over the years. The relationship has just gone down the tubes. Scotias broker model isn't nearly as good as ings. Now I have to figure out where all this volume will go, and it definitely won't be going to scotia. We are looking more and more like Australia everyday. One less choice for the Canadian consumer. :(

  • MortgagePro10 on 2012-08-30 2:43:19 PM

    This is great news for brokers. One of our channel's best supporters steps up and acquires a unique lender that has great broker ties itself. Rather than lose a lender as many feared, early indication is that we will keep this lender option in our channel. This is huge because had BMO or RBC bought, we likely would have lost ANOTHER lender and the unique features and options that they bring to the table. It is important to start distinguishing ourselves from banks in ways other than rate. ING brings features and products that allow us to do that and that is vital.

  • CD on 2012-08-31 12:10:28 AM

    This is horrible news in my opinion. The SMA model is flawed in every way possible. The last thing Webster needs is to fill his boat with more holes.

  • Ron Dyck on 2012-08-31 2:34:51 AM

    Another good lender, good company gone to the big 5. It is sad and as they disappear, our service to the clients is just more limited.

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