As attractive as ING Direct Canada may be to prospective buyers, its use of brokers will likely deter the biggest of those suitors, according to one analyst.
ING’s thriving relationship with the mortgage broker channel may in fact make the alternative bank less appealing to the likes of Bank of Montreal, Royal Bank and CIBC, according to John Reucassel, bank analyst for BMO. That’s because, these lenders have actually left or no longer use the channel.
However, TD and Scotiabank, respectively the country’s second and third largest banks – as well as National Bank – may have the “greatest strategic interest” in ING, said Reucassel.
ING’s laser-focused interaction with mortgage brokers has been credited for its success in competing with the country’s Big Five. When the Dutch-based bank entered the Canadian market in 1997 it relied on those mortgage professionals to wage war with the established Canadian lenders without having to invest millions of dollars in capital expenses to create an expansive branch network.
While that helped ING Direct amass $31.5 billion in residential mortgages and about $4.75 billion in deposits last year, it won’t necessarily appeal to RBC and others firmly situated outside the broker channel.
Still, that may be good news for brokers who’d like to see ING remain a broker-friendly lender instead of having its book transferred to the buyer’s branch system.