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Financial Post: Equitable Bank struggling to keep up with demand
February 27, 2016
11:29 am
Norman1
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Financial Post article last week (Thursday, February 18) confirmed that EQ Bank was swamped:

Equitable Bank struggling to keep up with demand for 3% interest savings accounts

“Processing account openings did get backed up just after launch,” Andrew Moor, Equitable’s chief executive, told the Financial Post.

He said the additional staff had “just about caught up” with the backlog Wednesday night.

Now, efforts are turning to explaining to customers when they can expect their new accounts to be opened.

“Our call centre has been unable to deal with communicating with our customers and providing the service we believe our customers deserve and should expect,” Moor said.

July 2, 2016
5:44 am
rfdm4g4g9
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"The target is to open 10,000 accounts this year by tapping an estimated $400 billion sitting in Canadian bank accounts that pay very little or no interest."sf-surprised
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I bet the banks are making $ 40 Billion on it sf-yell, while customer's are getting peanuts.

July 4, 2016
4:33 pm
Doug
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rfdm4g4g9 said

"The target is to open 10,000 accounts this year by tapping an estimated $400 billion sitting in Canadian bank accounts that pay very little or no interest."sf-surprised
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I bet the banks are making $ 40 Billion on it sf-yell, while customer's are getting peanuts.

Nice thinking but, unfortunately, with low interest rates, the bank's Net Interest Margin, the difference between what they pay on deposits and what they receive from their loans and mortgages, is typically around 2% or less. That's about $8 billion, on $400 billion, spread among the various banks and that's only on consumer deposits. No small change, to be sure, but definitely not the 10% NIM you're showing. ;)

Cheers,
Doug

July 4, 2016
10:57 pm
Loonie
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However, we have a fractional banking system, so they get to effectively loan it out several times. They make much more off our money than we do.

July 5, 2016
5:43 am
xxxx
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Loonie said

However, we have a fractional banking system, so they get to effectively loan it out several times. They make much more off our money than we do.

I think "leverage" is the economic term - and Canadian banks (and their shares) will continue to be highly profitable, as they have for 100 years.

July 5, 2016
6:01 am
Norman1
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Loonie said

However, we have a fractional banking system, so they get to effectively loan it out several times. They make much more off our money than we do.

Not true. The deposits are only loaned out once. Fractional banking means the cash on hand is a fraction of the deposits. The difference is what is loaned out.

They make more money because they charge more on the loans than they pay us depositors.

July 5, 2016
11:06 am
Loonie
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There are several good explanations of how fractional banking works to enable repetitive lending, which are available on the internet, including youtube. I don't have time to review them again at this time, but anyone who is interested can look into it for themselves.

Norman1's explanation is correct, as far as it goes.

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