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Equitable Bank acquires Concentra Bank
February 7, 2022
1:27 pm
Peter
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February 7, 2022
1:41 pm
Dean
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.
Hmmm ... I haven't read the whole NewsWire article yet (it's rather lengthy), but I wonder if the online part of Wyth will end up being folded into EQ. Time will tell, I guess.

There's also this https://www.wyth.ca/exciting-news-about-future-wyth

    Dean

sf-cool " Live Long And Prosper " sf-cool

February 7, 2022
2:10 pm
Norman1
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Yes, Wyth's days are numbered. This is from the newswire.ca press release:

Equitable and Concentra Aligned to Digital, Fintech Leadership and Partnerships

  • At closing, EQ Bank will become the sole digital platform, replacing Wyth. Pairing Concentra's digital banking and fintech strategy with EQ Bank will enhance Equitable's position as an innovative financial services hub for Canadians
February 7, 2022
2:36 pm
Jowett
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Just great ! I am maxed out with both EQ and Wyth for CDIC purposes, so looks like I will have to find a new home for funds presently at Wyth as they are the one being taken over. The first article indicates closing will be in the second half of 2022 so I assume I have until then to make the change.
These bank and credit union takeovers and amalgamations seem to be increasing and there should be more pressure on Govt. to cover a larger portion of deposits in order for depositors to avoid having to open multiple accounts everywhere.

February 7, 2022
2:45 pm
savemoresaveoften
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Norman1 said
Yes, Wyth's days are numbered. This is from the newswire.ca press release:

Equitable and Concentra Aligned to Digital, Fintech Leadership and Partnerships

  • At closing, EQ Bank will become the sole digital platform, replacing Wyth. Pairing Concentra's digital banking and fintech strategy with EQ Bank will enhance Equitable's position as an innovative financial services hub for Canadians

  

what a bumper ! Just opened an account not too long ago for the 1.55% rate...

February 7, 2022
3:27 pm
Loonie
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Who knew it was even for sale?

Neo is probably popping the champagne.

Unfortunately, from what I've seen, bigger is not better for depositors.

You'll probably be OK insurance-wise if you have GICs with both. Concentra's will almost certainly be grandfathered.

Maybe EQ will finally figure out how to produce joint GICs. Wyth at least allows couples to have them. Neither is what I'd call progressive on this front. Wyth also offers RIFs, which EQ doesn't, but has transfer fees.

February 7, 2022
7:19 pm
smayer97
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Maybe that is part of the point of acquiring Wyth, to more easily or quickly offer joint products? Time will tell.

February 7, 2022
7:25 pm
Norman1
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There are still have some months left for Wyth Financial. The regulatory approvals for the purchase are not expected until the last half of this year.

Wyth seems to have put good thought into the design of their online banking web site. No stability issues. Good details shown for transactions. Sorry to see that it will eventually be retired.

February 7, 2022
7:46 pm
AltaRed
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EQ could adopt the Wyth platform but not the brand. Scotia did that when they brought E*Trade Canada in-house. They essentially re-branded to Scotia iTrade and folded their own discount brokerage into that one. We won't know for some time.

February 7, 2022
9:01 pm
maGIC
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Would this be an opportunity for EQ to acquire a second CDIC coverage similar to Oaken when they acquired CFF which became Home Bank?

February 7, 2022
9:16 pm
Loonie
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smayer97 said
Maybe that is part of the point of acquiring Wyth, to more easily or quickly offer joint products? Time will tell.  

There are cheaper ways, don't you think?
How hard can it be?

February 7, 2022
9:20 pm
Norman1
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maGIC said
Would this be an opportunity for EQ to acquire a second CDIC coverage similar to Oaken when they acquired CFF which became Home Bank?

Yes, if Equitable Bank decides to keep Concentra Bank going.

There would also be a third CDIC member: Concentra Trust.

February 7, 2022
10:00 pm
Norman1
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Loonie said

There are cheaper ways, don't you think?
How hard can it be?

It took EQ Bank years to "manufacture" joint accounts. The R&D costs must have been significant! Sadly, whatever they did doesn't work for GIC's, for some reason. sf-surprised

Could be another few years before they can "manufacture" joint GIC's!

February 7, 2022
10:25 pm
Loonie
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Then their "manufacturing" division is incompetent. Even the tiniest CUs mange to offer joint GICs! I know Meridin allows 3 signators, maybe more.
I think the real problem is lack of will. They lack a service orientation. They just pick the low-hanging fruit.

February 8, 2022
6:50 am
AltaRed
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Norman1 said

maGIC said
Would this be an opportunity for EQ to acquire a second CDIC coverage similar to Oaken when they acquired CFF which became Home Bank?

Yes, if Equitable Bank decides to keep Concentra Bank going.

There would also be a third CDIC member: Concentra Trust.  

Equitable Bank already had Equitable Trust as a separate CDIC entity and issued GICs through both as I understand it https://www.equitablebank.ca/gic But not HISA accounts I don't think.

February 8, 2022
8:15 am
AltaRed
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Loonie said
Then their "manufacturing" division is incompetent. Even the tiniest CUs mange to offer joint GICs! I know Meridin allows 3 signators, maybe more.
I think the real problem is lack of will. They lack a service orientation. They just pick the low-hanging fruit.  

I don't think their business model is necessarily focused on being a retail bank. With the Concentra purchase, it looks like their interest is trending to business services to CUs and trust services to balance against their current 'classic' loan business that is 'net interest margin' dependent.

They may be able to only push so much money out the door in the form of loans to creditworthy customers, in which case they don't want to have too much excess in the way of liabilities (customer deposits) to be a headwind to that business. Speculating here, but being more customer friendly such as offering joint GICs (or having more CDIC memberships) could result in too much in the way of customer deposits forcing them to reduce both their HISA and GIC rates to stem the flow.

I'd rather they provide 'choke' points to customer deposits and keep their interest rates where they are rather than open the flood gates and maybe have to knock 10-20 basis points off their HISA and GIC rates to manage money flows.

The market is liking this Concentra acquisition. EQB stock price is up more than 5% since the announcement. To become the 7th largest bank in Canada in the form of assets and still potentially have better offerings (rates) to the public than Laurentian and National above them would be a win-win for their shareholders.

February 8, 2022
8:50 am
Loonie
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The amount of advertising they've done doesn't support the idea that they can't use more deposits. It suggests they only want more (young, single) customers.

When they first started, they did have deposit limits, and they may still have. I think it was 200K last time I looked, but I would never go that high or recommend it.

Buying Concentra suggests to me that they are diversifying, not curtailing existing business.

Getting bigger normally means less competitive deposit rates. I will be pleasantly surprised if this is not the case here. Concentra rates are lower and that is where I think EQ will likely be headed.

WealthOne seems to be the one to watch. Competitive rates, sometimes better than EQ, AND joint GICs.

February 8, 2022
8:53 am
Dean
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sf-cool " Live Long And Prosper " sf-cool

February 8, 2022
9:08 am
AltaRed
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I agree they are diversifying in buying Concentra, mostly in the services business though. At this point, we don't know what they will do with CDIC memberships. They have two of them now in the form of Equitable Bank and Equitable Trust, each of which sells GICs, but only one HISA (EQ Bank) business. Whether Equitable Bank will pick up some of the Concentra Bank offerings, we don't know that either. Stay tuned for later 2022.

For what it is worth, I recognize joint GICs are of value to traditional nuclear families (long term couples) but singles, most? common law, and most? blended families would not make use of joint GICs for succession/heirs purposes. The traditional couple having joint finances is a diminishing segment of the population. EQ may know that and thus not care.

Added: Wealth One is young, with under $500M in assets and caters mostly to the Chinese immigrant community with Hong Kong/mainland China connections. Mr. Chen clearly saw an opportunity to start Wealth One back in 2015 but it is unclear to me what the mass appeal might be yet. It clearly is building on the EQB and HCG model with alt lending to immigrants et al.

February 8, 2022
10:13 am
canadian.100
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AltaRed said
Wealth One is young, with under $500M in assets and caters mostly to the Chinese immigrant community with Hong Kong/mainland China connections. Mr. Chen clearly saw an opportunity to start Wealth One back in 2015 but it is unclear to me what the mass appeal might be yet. It clearly is building on the EQB and HCG model with alt lending to immigrants et al.  

Loonie said
WealthOne seems to be the one to watch. Competitive rates, sometimes better than EQ, AND joint GICs.  

The last time I looked at WealthOne's Financial Statements, I noted they are not yet profitable which is perhaps to be expected for a fairly new FI. As AltaRed correctly stated, WealthOne was established to target a certain market - I do not think they have mass appeal. (but if Joint GICs are a prime requirement, than sure, use WealthOne as long as one respects CDIC limits because they are not profitable and which could affect stability). I prefer to deal with FIs that are at least profitable and thus more likely to be stable.

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