Remaining Zero-Fee chequing accounts in Canada.. | General comparisons | Discussion forum
December 12, 2009
See my detailed posts on this here – http://www.highinterestsavings…..eing-sold/
For convenience, I have cross-posted them here:
I don't think CIBC will pick up ING – they already have PC Financial and have a relatively good deposit base and good capital ratios (they and National Bank are the two Canadian banks that didn't have their credit ratings put on a 'negative outlook' for possible downgrade by the "Big Three" credit ratings agencies). As well, TD is still digesting its MBNA Canada and Chrysler Financial acquisitions, among other priorities. Plus, they just finished digesting a massive buy of most of Citi Cards Canada (excluding some "subprime" Citi regular MasterCards and the Home Depot portfolio) credit card portfolio. It's a lot to pay just to expand PC Financial, which is a joint venture with Loblaw. Remember – they only operate the day-to-day banking and wealth management aspect of PC Financial; they don't even administer or own the PC MasterCard, that is issued by PC Financial Bank and administered/serviced by MBNA Canada, now owned by TD Canada Trust, apparently.
TD Canada Trust probably won't buy ING, except to take out a competitor that ranked #1 in customer satisfaction among the midsize banks. Scotiabank and National Bank are indeed the top Canadian banks I'd put. I'd like to see Canadian Western Bank buy ING Direct Canada to expand ING's competition Canadian Direct Financial (which CWB owns), but at $2 billion, that's about what CWB is worth itself. (CWB also owns Bank West, which acquired Ubiquity Bank, a "virtual bank" to compete with Citizens Bank of Canada and owned by Prospera Credit Union, a number of years ago.) I don't know if they could finance it – or if the regulators would allow it.
Beyond that, I don't see any foreign buyers – ICICI Bank has its own troubles and ING Direct Canada doesn't fit the foreign buyers' strategies in Canada nor would it give them the scale they are seeking (in terms of market share and retail branch network). Ally Canada is one possibility, but their own application for Schedule II Chartered Bank status is being held up by OSFI and the Minister of Finance, likely over capital adequacy issues, for over two years now. Plus, are they even big enough to buy it? They have about $1.5 billion in deposits and mortgages in Canada whereas ING has $30 billion.
My money's on National Bank of Canada, followed by Scotiabank and then BMO.
Footnote: A credit union is also a possibility, but again, are they big enough (if a bidding war emerges)? Of them, I'd say – possibly – the "Big Three" of VanCity, Coast Capital Savings (both in B.C.) or Meridian Credit Union (Ontario) would be able to take it on but it's "iffy" even then. Desjardins (Quebec) could probably do the deal, but do they want it?
December 12, 2009
There's still quite a few "free" chequing account providers in Canada, even if the "worst" happens with ING and it's absorbed by Scotiabank or TD Canada Trust. (National Bank of Canada, a credit union and BMO would likely maintain the "free", direct banking – no branch access – model.)
As well, CIBC buying them wouldn't be good – that would actually reduce competition.
There are also (besides ING's THRiVE):
Canadian Direct Financial, a subsidiary of Canadian Western Bank, and its KeyDirect Chequing Account – completely free with a minimum $5,000 registered or non-registered term deposit/GIC or minimum balance of $5,000
ICICI Bank Canada's HiVALUE Chequing Account – free with $500 minimum balance (the lowest in Canada)
Coast Capital Savings Free Chequing, Free Debit and More Account
BMO Club Sobeys No-Fee Chequing Account
Most credit unions offer unlimited free chequing accounts with $1000 minimum balance
Another credit union in Manitoba offers an "Unfee Chequing Account".