Brokers clinging to the notion that it will be business as usual with a Scotia-owned ING are facing certain disappointment because the popular discount banking brand is bound to disappear in Canada after 18 month, according to a seasoned mortgage professional.
“Scotia actually said it in their press release,” said Ron Butler, of Verico- Butler Mortgage. “The license to use the ING’s brand is only for 18 months... after that we’ll see the absorption of ING’s brokerage group.”
Many brokers had earlier opined that Scotia’s announced intention to purchase ING Direct Canada would be a good thing for the broker channel. They saw the larger bank putting the weight of its capital base behind ING’s mortgage operation.
“With the country’s third largest bank behind it, ING will now have more capital available to fund mortgages,” said Dan Eisner, CEO of True North Mortgages. “This could potentially be a good thing for brokers.”
But, Butler argues the opposite is bound to happen.
“Any loss of a good lender is a bad thing for the channel,” he said.
“Scotia is only interested in ING’s very successful Internet and direct-phone budget banking operation,” Butler said. “Scotia will use ING’s contact centres to sell a very different product offering to a new set of customers.”
He asserts that Scotia has no intention of keeping ING’s existing channel links because of overlapping costs.
“There’s a huge overlap in both bank’s mortgage brokerage group,” said Butler. “Why would any bank want to keep two similar groups? What I see is that ING’s mortgage brokerage group will be absorbed into SMA.”
If the sale goes through, Butler expects to see integration between the two lenders occurring within the next 12 months. But ultimately, he said, the ING brand, at least in Canada has only 18 months to go.