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.