Broker channel consolidation underway

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Broker channel consolidation is again in play, with B2B Trust announcing it has signed an agreement to acquire Verico lending partner AGF Trust for a cash amount equivalent to its $242-million book.

The subsidiary of Laurentian Bank should close on the deal in August, if it wins the necessary regulatory signoffs. At the same time, the move is expected to grow B2B’s influence in the broker channel, marrying its own growing success around HELOCs and fixed-rate readvanceables with the inroads AGF has made with Verico brokers across the country.

While AGF Trust currently provides GICs, term deposits and investment loans through some 20,500 financial advisors, it has also focused on growing its mortgage book, using 1,050 mortgage brokers to originate the business.

As at the closing date, AGF Trust's assets are expected to be approximately $3.8 billion, essentially including cash and marketable securities.

Analysts are already calling the move a strategic one set to help the Quebec-centred Laurentian – it’s the third largest lender in that province – gain a stronger foothold in the rest of the country.

That growth will come directly through its B2B Trust, already gaining traction among brokers, particularly in Ontario.

HELOCs have played a significant role in that development, winning Laurentian spot 13 on the broker channel market share report for Q1.

“A lot of brokers are looking to differentiate themselves,” said B2B Product Manager Mary Hayes last fall. “This HELOC allows them to do that.”

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