One of the major lenders in the mortgage broker space took a shortcut to receiving a Schedule I banking license through the purchase of an existing bank.
“Once the transaction closes we will withdraw our application for the bank license,” Gerald Soloway, chief executive officer of Home Trust
told MortgageBrokerNews.ca. “It is still an active application at this point.”
Home Capital announced Monday that its subsidiary, Home Trust, will acquire CFF Bank – a Schedule I licensed bank. The purchase price is estimated at $15 million and would be aimed at acquiring all outstanding common shares in the bank.
The deal had many in the industry speculating that Home Trust – which currently has an application with OSFI for its own banking license – would withdraw that application.
“Home Trust now has a schedule I banking license; they’ve bypassed years of work with the regulators to get it,” Roy Singh of Centum Discount Mortgage Canada told MortgageBrokerNews.ca. “Now with that license it makes it easier for them to access more capital.”
Home Trust will own 100 per cent of CFF Bank once the deal is finalized.
“The acquisition of CFF Bank represents a major step towards realizing our long-term plan to achieve greater funding diversification at Home Trust,” Soloway said in a release. “We look forward to welcoming to the Home Capital family CFF Bank’s customers and network of CFF Centre owners in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia, as well as members of the CFF Bank staff.”
The deal is still pending shareholder and regulatory approval, but Soloway said the company is aiming to finalize the deal early fall.