Renewed concerns about a big bank takeover

Renewed concerns about a big bank takeover

Renewed concerns about a big bank takeover A recent lender acquisition has renewed concerns that more amalgamation could be in store, and brokers fear it could be a big bank doing the buying.

It’s happened before and brokers fear it will happen again; banks, impressed by the technology and performance of broker channel lenders, acquiring those lenders and shutting players out.

“We all know there are a lot of changes taking place with the lenders and there are a lot of things up in the air,” George Macris of Dominion Lending Centres Centre Ouest told MortgageBrokerNews.ca. “A lot of the monoline lenders are raising the bar in terms of service and rate and the banks lack that; if the banks could offer that same service (they would have a big advantage).”

According to one industry player, chatter among brokers is picking up steam that a big bank could be next to acquire a broker channel lender – and it wouldn’t be the first time.

“A lot of people are observing that the banks have purchased a number of lenders in the past,” Walid Hammami, a Montreal-based broker with Dominion Lending Centres told MortgageBrokerNews.ca. “What if (another bank) is making a move; that would be a big problem because nothing would stop subsequent banks from making similar acquisitions, which could eventually consume the industry.”

Hammami is noticing the more and more brokers discuss the possibility. He likens the potential result to Scotia Bank’s acquisition of ING, which led to ING’s exit from the mortgage broker industry.

Of course, it’s all speculation at this point.

However, the industry has seen its fair share of lender acquisitions in the past; most recently with Home Trust’s purchase of CFF Bank. That move will likely benefit brokers, with Home Trust beefing up its offerings. But a bank acquisition of that magnitude could mean one less option for industry players.
5 Comments
  • Tony Romano 2015-08-19 9:38:31 AM
    I believe that if a bank should be allowed to continually buy the competition because they can't do it themselves efficiently, then allow foreign ownership of our banks! Time to put the boots to the cushiony position of these top banks. Competition should be good for EVERYONE, not just the few.
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  • Jesse D 2015-08-19 10:06:29 AM
    Perhaps the banks should invest some of their billions to hire better IT teams so they too can have decent technology. TD Bank still works with fax! WTH!! Luckily on the broker channel FN has helped TD out. Tony, if there was a 'like' icon, I'd click it for your comment. Canada like everywhere needs competition and the government can't be afraid of the big 5 or more so TD and RBC. Cut them down in size and allow some foreign ownership. Make it easier for American lenders to come north if they so choose. The big 5 do not offer the technology, service nor product that is of benefit to the consumer, their clients or potential clients. They just make their share holders happy by making their billions and using advertising to make people believe the Big 5 are where its at.
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  • John Martin 2015-08-19 11:06:14 AM
    Competition and American or any other lenders. Absolutely best thing that could ever happen for all consumers in this country. Coast to coast. But the big banks who control the government and are in bed with them 24/7 will not allow it. Only if the Canadian people rose up and let their voice be heard collectively. Then they would get the politicians ear. Good luck with that one. Even then the banks and their government politician friends would try and do everything humanly possible to NOT allow the good and right thing to happen as mentioned above. That's reality as unfortunate as it is.
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