They may be jumping the gun, but some brokers are suggesting if ING Direct Canada is sold off, the buyer will move to take its extensive mortgage book into the branch and out of the channel.
“Count ING out. Within a yearthey’ll be sold,” Rob Campbell of Verico The Mortgage Wellness Group, told MortgageBrokerNews.ca. “What worries us is that the buyers will just mine ING’s client list for what it’s worth and leave the broker channel.”
That move would be not unlike CIBC’s and its decision to fold FirstLine at the same time transfer the mono-line's massive book to its branches in hopes of converting clients at renewal.
In the scenario Campbell lays out, ING’s new owner would simply focus on transferring clients to ING's branch network or its own.
“That’s the easiest and cheapest way to go about it,” said the Guelph broker.
Last week, the Dutch-based parent of the bank announced it was “evaluating its options” as it continues to wiggle out of dire financial straits. Among those options are, the possible sale of its UK and Canadian operations.
Although ING is still in the hole for about three billion euros in bailout money from the Dutch government, the bank’s Canadian arm is considered a good buy, say analysts.
Since it began its Canadian operations in 1997, ING Direct has had phenomenal growth in high-ratio insured mortgages through the broker channel.
Now many brokers are worried that ING will be snapped up by one of Canada’s big five banks, which will simply add the lender’s mortgage book to its own.
If ING does go on the block it could be an indication that tougher times are ahead.
“Earlier we had FirstLine being pulled out by CIBC, now we have the potential loss of ING,” said Campbell. “The industry may be headed for a cycle of fewer lenders. We are in for a rough ride.”