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Canada Orders Wealth One Bank Shareholders to Divest
September 18, 2023
6:34 am
mordko
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I don’t understand why claims about anything “personal” keep cropping into this discussion. Not just you. Is it not possible to just stick to opinions on issues? Of course, my “personal vendetta” against W1 = baseless nonsense.

September 18, 2023
7:29 am
canadian.100
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mordko said
I don’t understand why claims about anything “personal” keep cropping into this discussion. Not just you. Is it not possible to just stick to opinions on issues? Of course, my “personal vendetta” against W1 = baseless nonsense.  

Fair enough, but obviously your wording and tone do give that impression not to just me.
Have a great day!

September 18, 2023
9:28 am
mordko
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Well, I didn’t like your wording claiming that savers with W1 will always get their money back under all circumstances but I didn’t go after you personally. I mean is it really better to go after someone personally with baseless claims if you do it as a team?

Have an amazing day!

September 18, 2023
10:26 am
canadian.100
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mordko said
I didn’t like your wording claiming that savers with W1 will always get their money back under all circumstances but I didn’t go after you personally.

Readers - I have never said that savers with W1 "will always get their money back under all circumstances." Most people (at least those who read this blog) know that CDIC covers only up to 100K.

September 18, 2023
1:06 pm
althisa
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Introducing some new information that people can umm.. discuss sf-wink:

Risk/reward ratio works for anyone investing in GICs at W1B

YR, W1B GIC Rate, Next best GIC Rate, Difference between W1B and next best
1, 5.98, 5.95 TNG, 0.03
2, 5.68, 5.75 Scotia [NEW], -0.07
3, 5.38, 5.35 OAK/MOT, 0.03
4, 5.28, 5.35 BMO [NEW?], -0.07
5, 5.28, 5.20 MOT, 0.08

So why would anyone invest in W1B 2 yr and 4 yr GICs?

Sources for new rates:
https://www.scotiabank.com/ca/en/personal/rates-prices/gic-rates.html
https://www.bmo.com/main/personal/investments/gic/gic-rates/

September 18, 2023
2:42 pm
canadian.100
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It might be noteworthy that both W1 and Tangerine offer an 18 month GIC which might work for some whether building ladders or not.

Tangerine 6%
W1 5.98%

and of course Tangerine is covered by CDIC up to $100K etc.

September 18, 2023
5:04 pm
Bill
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althisa, some people might not want to open accounts at more FI's and/or have already maxed out CDIC limits at other competitors. Also Wealth One caters to Chinese Canadian community, they might prefer to do business there.

September 18, 2023
7:58 pm
Loonie
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Seems to me the 2 year rates are "hot" right now, so you may find other FIs increasing those rates too. GICWealth is offering 5.87, but I haven't checked the issuer.

I don't follow four year rates closely any more as I'm only interested in 1-3 yr GICs, but GICWealth is offering 5.65

News reports say that (some of?) the big banks are storing up for current and projected loan defaults right now. Maybe they need more cash to do this? Maybe smaller FIs doing the same?

September 18, 2023
7:59 pm
althisa
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Yes, switching costs, friction in transfers between FIs.
I can also see familiarity and comfort in staying with a FI that serves your community as another reason not to switch FIs for a slightly higher interest rate.

September 19, 2023
6:18 am
COIN
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Loonie said
News reports say that (some of?) the big banks are storing up for current and projected loan defaults right now. Maybe they need more cash to do this? Maybe smaller FIs doing the same?  

BMO announced they are exiting (at least for now) the auto loan business. Too much risk of loan defaults.

September 19, 2023
7:30 am
AltaRed
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COIN said

BMO announced they are exiting (at least for now) the auto loan business. Too much risk of loan defaults.  

That is not how I read it. They are leaving the indirect dealer financed part of the business because it is a small part of the business dominated by Scotiabank and TD. They are still doing direct-to-retail auto loan business.

September 19, 2023
12:39 pm
TINAisOver
The Six
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AltaRed said

That is not how I read it. They are leaving the indirect dealer financed part of the business because it is a small part of the business dominated by Scotiabank and TD. They are still doing direct-to-retail auto loan business.  

I'm not sure how else to read this article regarding BMO getting out of the retail Auto loan business. BMO is cutting their losses and walking away. Reporting total bad debt provisions have tripled over one year while retail Loans (primarily autos) have become delinquent 8 fold over the same time period.

To me , this is another piece of news indicating the financial health of consumers overall. I expect things are just starting to get worse before they get better.

https://www.thestar.com/business/bmo-to-shutter-indirect-retail-auto-finance-business-as-bad-debt-mounts/article_513436ec-5418-5c75-b4b1-9d7d8d7280ed.html

Trader first, Saver second

September 19, 2023
4:00 pm
AltaRed
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Stop reading trash from the Toronto Star. This G&M link https://www.theglobeandmail.com/business/article-bank-of-montreal-winds-down-its-retail-auto-finance-business-shifts/ is far more clear on the business decision.

BMO does not see a competitive advantage to being in the indirect auto loan business through dealerships where TD and Scotia have the lion's share of that business. It will maintain its attention on its direct auto loan business. The old adage is... if you cannot be #1 or #2 in an area of business, get out of it. It seems to be pretty clear to me.

September 20, 2023
8:10 am
TINAisOver
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AltaRed said
Stop reading trash from the Toronto Star. This G&M link https://www.theglobeandmail.com/business/article-bank-of-montreal-winds-down-its-retail-auto-finance-business-shifts/ is far more clear on the business decision.

BMO does not see a competitive advantage to being in the indirect auto loan business through dealerships where TD and Scotia have the lion's share of that business. It will maintain its attention on its direct auto loan business. The old adage is... if you cannot be #1 or #2 in an area of business, get out of it. It seems to be pretty clear to me.  

"Stop reading trash from the Toronto Star" gave me a good laugh, for moment. You must be mistaking the The Toronto Star for the Toronto Sun. The Toronto Star is now barely a shadow of what it once was. Truly a great local paper somewhat long ago in its past. It is now another pathetic and sad dead news business walking. I admit I still have a newspaper subscription that I receive in the morning. I consider it a charity donation as apposed to something of value.

To be fair to The Star on this one. the article appears to be the now common cut and paste that news agencies now take and disseminate. I found nearly the same text on many other news outfits regarding the BMO exit of retail indirect auto loans.

You are right about the G&M article. significantly more detailed. However, strangely missing more specific info regarding the retail indirect auto loans data which is lumped in a summary total noted in the Star piece.
BMO having a sliver of the indirect auto loan business is not a new circumstance. So why have they decided to exit that particular part of the business now? What has changed for BMO is the significant Bad debt provisions increasing 8x over a 12 period. I can't conclude anything other than they are throwing in the towel. Rightfully doing so . They have nothing to gain except greater losses. Let the other FI's fight over an imploding market.

BMO was not only competing against BNS and TD, it was also competing against the car companies own financing arms. The statement made in the third paragraph involving "competitive focus" is typical PR spin attempting to turn a negative into a positive.

BTW, your statement regarding " It will maintain its attention on its direct auto loan business" is not correct. When they mean turning their attention or focus to the auto loan business is not to focus on a "direct consumer auto loans" model. It's a focus of lending to the auto business industry in general, such as Car dealerships vehicle inventory. They say they will continue making auto loans to consumers through their regular lending services like someone who walks into a bank and asks for a loan to buy a car.

Trader first, Saver second

September 20, 2023
7:16 pm
Vatox
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I hope you mean fraud by depositing customers isn’t insured and not that any fraud by the bank will drop insurance for everyone?

September 20, 2023
7:23 pm
mordko
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Vatox said
I hope you mean fraud by depositing customers isn’t insured and not that any fraud by the bank will drop insurance for everyone?  

If you are investing money that’s dear to you in a … lets say “developing story” and placing all your trust on CDIC then you may want to familiarize yourself with coverage. And its best to use sources other than a chatroom. But the short answer is “no”.

October 9, 2023
7:17 pm
davidgeorge
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https://www.ctvnews.ca/politics/banking-mogul-breaks-silence-to-defend-against-allegations-of-chinese-interference-1.6594643

Banking mogul breaks silence to defend against allegations of Chinese interference

October 10, 2023
9:32 am
Dean
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.
Hmmm ... I wonder what CSIS has to say about that

It's unlikely it will ever be made public.

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

December 14, 2023
5:52 am
canadian.100
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canadian.100 said

AltaRed - Since you and some others are interested, I will give you the figures from the latest W1 financial statements included on the OSFI site.

- LOSS for 2023 to the end of the 2nd Quarter $6,686,000

- RETAINED EARNINGS (NEGATIVE) which represents the cumulative LOSSES from inception $60,434,000  

Here is an UPDATE on Wealthone Bank's Financials to end of 3rd Quarter 2023

LOSS for 2023 to the end of the 3rd Quarter $9,500,000 which represents cumulative LOSS for current fiscal year

RETAINED EARNINGS (Negative) which represents the cumulative LOSSES from inception (2016) $63,247,000

Source: OSFI site

December 14, 2023
7:51 am
Bill
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Thanks for the update, canadian.100, this is helpful. Definitely not a bank you want to exceed CDIC limits with.

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