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Does EQB traded on TSE represent EQ Bank?
September 17, 2016
4:50 pm
AndreasChen
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Just curious, because it can be a good tool to monitor deposit safety. Thanks.

September 17, 2016
5:01 pm
Loonie
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September 17, 2016
5:55 pm
Norman1
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Not quite.

Symbol EQB refers to Equitable Group Inc. That's the owner of Equitable Bank.

Equitable Group Inc. has a DBRS credit rating of BBB(low). Equitable Bank deposits have a slightly better DBRS rating of BBB.

September 17, 2016
6:35 pm
AndreasChen
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Loonie said

Yes.
See https://www.eqbank.ca/company/overview/company-profile

Then this is a bank I am confident to save money with. By watching EQB we know immediately if anything goes wrong. I don't think any other high-yield account comes with this benefit, am I right?

September 17, 2016
8:47 pm
Loonie
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None of the credit unions will have stock market listings or ratings because they are owned by members, not by stockholders. So, if that's your criterion, you will eliminate a lot of possibilities.

Oaken's parent, Home Capital Group, is also on the stock market, as is Scotiabank which owns Tangerine. I suppose PC must be owned by Loblaw, not sure how that one works since CIBC also has some kind of stake in it.

September 17, 2016
11:46 pm
Doug
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Norman1 said

Not quite.

Symbol EQB refers to Equitable Group Inc. That's the owner of Equitable Bank.

Equitable Group Inc. has a DBRS credit rating of BBB(low). Equitable Bank deposits have a slightly better DBRS rating of BBB.

Actually, EQ Bank isn't a separate legal entity in itself. It's a brand name for Equitable Bank, a Schedule I Chartered Bank, which is a direct wholly-owned subsidiary of Equitable Group Inc (TSX: EQB). This is the exact same thing, in fact, as how Home Trust, and now Home Bank, federally Chartered Trust and Schedule I Bank, respectively, are direct wholly-owned subsidiaries of Home Capital Group Inc (TSX: HCB) and Oaken Financial is a brand name of Home Trust and Home Bank, though the trademark was recently moved under Home Bank's ownership and exclusively licensed to its sister company, Home Trust. :)

Hope that clarifies! sf-cool

Cheers,
Doug

September 18, 2016
12:48 am
Doug
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Loonie said

None of the credit unions will have stock market listings or ratings because they are owned by members, not by stockholders. So, if that's your criterion, you will eliminate a lot of possibilities.

Oaken's parent, Home Capital Group, is also on the stock market, as is Scotiabank which owns Tangerine. I suppose PC must be owned by Loblaw, not sure how that one works since CIBC also has some kind of stake in it.

I don't often agree with Loonie, but touché on both points, Loonie. :)

VersaBank, previously Pacific & Western Bank of Canada, which has some of the highest regulatory capital ratios in Canada, was previously wholly-owned by Pacific & Western Capital (now PWC Capital Inc) until what it is now PWC Capital spun out a minority interest in Pacific & Western Bank of Canada a few years ago and is now undergoing a corporate transformation that would see PWC Capital amalgamate with publicly-traded VersaBank as VersaBank as the successor entity and PWC Capital shareholders would exchange their shares for VersaBank shares.

Who owns a bank in Canada means nothing. Sure, with the smaller banks and trust companies, you may want to stay within your CDIC limits whereas with the "Big 5", or those owned by the "Big 5," it's absolutely irrelevant. OSFI regulates them all, their underwriting standards, for which it's stepped up those regulations and is now increasing audits, particularly of the smaller banks and trust companies. They have to maintain really high capital ratios. :)

Other example(s) of publicly-traded companies owning chartered banks or trust companies:
* Laurentian Bank wholly owns B2B Bank, B2B Trustco, Laurentian Trust of Canada and LBC Trust
* Bank of Montreal wholly owns Bank of Montreal Mortgage Corporation and BMO Trust Company
* Bank of Nova Scotia, directly or indirectly (as applicable), wholly owns, get ready for it, Hollis Canadian Bank (previously Dundee Bank of Canada), Montreal Trust Company of Canada, National Trust Company, Scotia Mortgage Corporation and Tangerine Bank
* Alberta Motor Association (which, admittedly, is a membership-based not-for-profit association but with which I've included in this list for similar reason(s)) wholly owns Bridgewater Bank
* The Toronto Dominion Bank wholly owns The Canada Trust Company, TD Mortgage Corporation and TD Pacific Mortgage Corporation. (Parent TD also has an ABM sharing and operations & administration agreement for First Nations Bank of Canada. As well, parent TD also operates its MBNA direct-to-consumer credit card and CUETS Financial credit card for certain credit unions division)
* Canadian Imperial Bank of Commerce wholly owns CIBC Mellon Trust Company (which is the custodian, registrar and/or trustee of most mutual funds in Canada), CIBC Mortgages Inc (previously was/amalgamated with FirstLine Mortgages Inc, which is in "run-off"), CIBC Trust Company and parent CIBC also serves as the banking, term deposit/GIC (for retail depositors through direct-to-consumer and in-branch channels), mortgages, lending and mutual funds provider of PC Financial-branded services and operator of in-store "pavilions"
* Canadian Tire Corporation owns 80% of Canadian Tire Financial Services Ltd, which wholly owns direct-to-consumer credit card & deposit issuer Canadian Tire Bank and also provides credit monitoring services. (Bank of Nova Scotia owns the remaining 20% of CTFS Ltd and, thus, Canadian Tire Bank, with the option to buy up to 30% more after 5 years or sell back its 20% to Canadian Tire Corporation after 10 years.)
* Canadian Western Bank owns Canadian Western Trust Company and Valiant Trust Company
* U.S.-listed Citigroup indirectly wholly owns Citibank Canada and Citi Trust Company, the latter of which it is in the process of applying to the Minister of Finance to continue as a regular federally incorporated company under the Canada Business Corporations Act instead of the current Trust & Loan Companies Act. It also wholly owns an OSFI-regulated, Schedule III Canadian branch of Citibank N.A.
* Vancouver City Savings Credit Union, a B.C. credit union, much like the Alberta Motor Association and its Bridgewater Bank subsidiary, wholly owns Citizens Bank of Canada, a commercial mortgage & foreign exchange provider and direct-to-consumer credit card & prepaid credit card issuer
* Alterna Savings & Credit Union Ltd, an Ontario credit union, wholly owns CS Alterna Bank, much like Vancity and the AMA do with their chartered bank subsidiaries
* DirectCash Payments wholly owns DirectCash Bank
* The aforementioned Equitable Group Inc wholly owns Equitable Bank
* TMX Group Inc, operator of Canadian stock exchanges, wholly owns, directly or indirectly, Equity Financial Trust Company, a transfer agent/custodian/registrar/proxy servicing company
* HSBC Holdings plc, a U.K.-listed publicly-traded banking conglomerate, indirectly wholly owns HSBC Bank Canada, which, in turn, wholly owns HSBC Mortgage Corporation (Canada) and HSBC Trust Company (Canada), among other non-OSFI regulated subsidiaries
* ICICI Bank, an India-listed banking conglomerate, wholly owns, directly or indirectly, ICICI Bank Canada
* Industrial Alliance Insurance And Financial Services Inc wholly owns, directly or indirectly, Industrial Alliance Trust
* Industrial and Commercial Bank of China, a China-listed banking conglomerate that is the world's largest banking group by "total assets" and/or "total deposits" in its custody and also sometimes by market value and with which is also majority state-owned by the Peoples Republic of China, wholly owns, directly or indirectly, Industrial and Commercial Bank of China (Canada)
* IGM Financial Inc, which also wholly owns Investors Group, also wholly owns, directly or indirectly, Investors Group Trust Co Ltd
* Manulife Financial Inc, directly or indirectly, wholly owns Manulife Bank of Canada and Manulife Trust Company
* National Bank of Canada, directly or indirectly, wholly owns Natcan Trust Company and National Bank Trust Inc, among other non-OSFI-regulated subsidiaries
* Samson Cree First Nation, much like Vancity and AMA and their chartered bank subsidiaries, wholly owns, directly or indirectly, Peace Hills Trust Company, one of only two independent trust companies to operate retail deposit-taking and lending branch networks (the other one is Home Bank and Home Trust Company but recently rebranded under its Oaken Financial banner, though First Nations Bank of Canada is owned by a consortium of first nations group(s) too but, in that case, TD operates its branches)
* Loblaw Companies Ltd directly wholly owns President's Choice Bank, which, under the PC Financial brand, issues term deposits/GICs only through the deposit broker and self-directed discount brokerage channels not directly to consumers that it largely uses to fund its PC Financial MasterCard portfolio, which it owns but has contracted TD's CUETS Financial division to administer and operate
* Royal Bank of Canada directly wholly owns each of RBC Investor Services Trust (a leading custodian/transfer agent/registrar and payments issuer for pension plans, mutual funds and publicly-traded companies, among others), Royal Bank Mortgage Corporation, Royal Trust Company and Royal Trust Corporation of Canada
* State Bank of India, an Indian-domiciled banking group, directly or indirectly, wholly owns SBI Canada Bank
* Sun Life Financial Inc, directly or indirectly, wholly owns Sun Life Financial Trust Inc
* UBS, a Swiss-listed banking and investment group, wholly owns, directly or indirectly, UBS Bank (Canada)

Note: There may be others that could be included, such as ones owned by the Quebec-based Desjardins cooperative or ones possibly owned by other state-owned Chinese banks or others that aren't CDIC members but are OSFI-regulated

My point this: virtually every CDIC member, the list that I used, is wholly-owned by a publicly-traded company of some kind. :)

Cheers,
Doug

September 18, 2016
2:22 am
Loonie
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That's quite a list! Unfortunately, almost none of them offer competitive interest rates.

You omitted Peoples Trust, which is privately held, apparently by the Ghermezian family of Edmonton (think West Edmtn mall). According to Wikipedia, the parent company, Triple Five Group, is committed to developing mineral resources on native lands. This would definitely be a FI that AndreasChen would not want to do business with.

September 18, 2016
7:03 am
AndreasChen
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Thank you for all the information. Just looking for simple ways to park my down-pay for a Toronto condo. By simple I mean easy pull of money and easy monitoring of bank safety. EQ seems to be a good place but they cap at 100K.

Once again I do not want to rely on CDIC...

September 18, 2016
12:15 pm
Loonie
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I don't understand what your alternative would be to CDIC. With it, you at least have the possibility of protection; without it, you have no protection. Are you saying you would go over 100K with EQ because you don't think CDIC is worth anything and because you don't like the ratings on other, insured, FIs?
If the ratings are your guide, then you should probably stick to the Big Six with their abysmal rates, I guess. The smaller banks will not likely ever compete with them in terms of ratings. That said, it's a good idea to keep an eye on them lest they become junkers.

September 18, 2016
10:12 pm
Doug
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Loonie said

That's quite a list! Unfortunately, almost none of them offer competitive interest rates.

You omitted Peoples Trust, which is privately held, apparently by the Ghermezian family of Edmonton (think West Edmtn mall). According to Wikipedia, the parent company, Triple Five Group, is committed to developing mineral resources on native lands. This would definitely be a FI that AndreasChen would not want to do business with.

Really!? Where's the source on that? I'm not a fan of the Ghermezian family and the whole West Edmonton Mall affair and how, basically, a lot of contractors and such apparently got screwed in the bankruptcy and somehow this family managed to either hold on to it or get it on the cheap. Pretty shitty. :(

If that's the case...now I will definitely not open an account with Peoples Trust Company. In fact, if I worried about any Canadian bank (which I don't currently)...this would be the one! :)

Cheers,
Doug

September 18, 2016
10:16 pm
Doug
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AndreasChen said

Thank you for all the information. Just looking for simple ways to park my down-pay for a Toronto condo. By simple I mean easy pull of money and easy monitoring of bank safety. EQ seems to be a good place but they cap at 100K.

Once again I do not want to rely on CDIC...

Confused...you mean they "cap at 100k" yet you "don't want to rely on CDIC"?

CDIC provides mandated, bank-paid deposit insurance in case of insolvency or failure of a financial institution. If you mean you're not concerned with staying within CDIC limits, that's totally fine but EQ Bank definitely allows more than $100,000 on deposit. Did you possibly mean they limit the amount of transfers in to $100,000? Just do another transfer in another day, or week, or whatever it is. But that's precisely the problem with EQ Bank, in its current form...if they allowed direct deposits/pre-authorized payments, you could "push" any amount in a single transaction to EQ Bank. :)

Cheers,
Doug

September 18, 2016
10:36 pm
Loonie
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I did not know about the ownership of Peoples myself until Andreas' question prompted my curiosity. I had always thought it a bit odd that it was privately held, and was not comfortable with that, but had not bothered to research it. 3% had a very soothing effect while it lasted!

I can't find the link I used before, but here is another one which makes the ownership very clear. http://ghermezian.com/

The other link, the one I cant find at the moment, led me to the Wikipedia entry for something called Triple Five Group, which appears to be the umbrella name for several of their ventures.

We began moving our TFSAs out of PT last week, coincidentally. Not a moment too soon! The TFSA was the only thing they were really good for, but that is over now and I am glad to be decluttering my "bank collection"!

September 19, 2016
6:59 pm
AndreasChen
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Not sure how I created so much confusion. I do not trust CDIC, but I trust the stock market. With a publicly traded bank, everything is monitored and priced into its stock, so that you can watch, and run away once something is wrong. With those shady small banks, they can hide their messed up balance sheet for years and you won't even know.
Isn't this a simple logic? Isn't this protection much more reliable than CDIC?

September 19, 2016
7:02 pm
AndreasChen
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More on CDIC: its depth is laughable. I wouldn't trust it and that's my judgement. One can certainly argue, just like some Americans still love Hilary.
Free opinions, respects, and that's it.

September 19, 2016
7:18 pm
Loonie
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I think I see now what you're getting at, Andreas. Your alternative is the stock market valuations. And you feel that is more reliable than CDIC. That wasn't clear to me before. I don't think it's the conventional view, which is probably why it was hard for us to grasp. But, certainly, you are entitled to hold it.

September 19, 2016
7:50 pm
NorthernRaven
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AndreasChen said
Not sure how I created so much confusion. I do not trust CDIC, but I trust the stock market. With a publicly traded bank, everything is monitored and priced into its stock, so that you can watch, and run away once something is wrong. With those shady small banks, they can hide their messed up balance sheet for years and you won't even know.
Isn't this a simple logic? Isn't this protection much more reliable than CDIC?

More on CDIC: its depth is laughable. I wouldn't trust it and that's my judgement. One can certainly argue, just like some Americans still love Hilary.
Free opinions, respects, and that's it.

This is somewhat silly. The stock price is reflecting expectations of profit, and can crater heavily before it reflects any solvency concerns. I don't know what the "shady private banks" might be, but even something like PeoplesTrust produces annual reports with financials. All institutions are covered by the regulators (OSFI), and you can actually get basic balance sheet info from them online.

CDIC is the deposit guarantee, not the regulator. They are moving the ex ante fund to higher levels, but in practice it is set to handle any of the non-systemic banks; the big ones would likely require government action anyway. In any case, CDIC has a massive $20 billion borrowing authorization with Treasury, and the government is in the end responsible for CDIC guarantees.

September 20, 2016
11:12 am
Doug
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I get what Andreas is saying in terms of CDIC, and what NorthernRaven says about its borrowing authorization from the Government of Canada, and yes, generally speaking, the overall stock market does tend to perform well over long time horizons (with the obvious caveat not to put exclusive emphasis on past performance). However, one of the reason(s) why someone would hold GICs or savings accounts is for shorter term needs (i.e., less than 5 years) or for investment opportunities with an active component of their globally diversified portfolio. So, in that sense, what you get from "savings accounts and GICs" is, quite simply, the protection of capital and no volatility (of the stock market(s)). :)

That being said, if any bank were to fail, remember, assuming another bank didn't take it over and just assumed the banks loan and deposit portfolio, common shareholders would rank at the bottom of the bank's capital structure.

Bottom line: don't confuse investing in the stock market as a complete alternative to "savings" and "GICs". They both have macro risks, obviously, though in the case of individual companies, the risk is much less in being a depositor than a shareholder. Consider everything!

Cheers,
Doug

September 20, 2016
11:29 am
NorthernRaven
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Doug said
Bottom line: don't confuse investing in the stock market as a complete alternative to "savings" and "GICs". They both have macro risks, obviously, though in the case of individual companies, the risk is much less in being a depositor than a shareholder. Consider everything!

The original post was about using the institution's stock price to determine the health and safety of deposits there. By that metric, one would be panicking about one's Oaken deposits constantly as the short-sellers monkey around with it, or speculation on their profit levels in a future housing crunch, or whatever. Not really a usefully discriminating tool, and the whole bit about CDIC depth is a non-sequitur.

September 20, 2016
12:00 pm
Bill
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AndreasChen, you say you can watch a bank's stock price, etc, and then "run away once something is wrong". With financial and other information disseminated instantaneously to everyone, how do you find out "something is wrong" before everyone else does too?

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