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Wells Fargo Leaves Canada

SkyRider

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Mar 31, 2009
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No big surprise. Wells Fargo is leaving Canada. They and other U.S. banks have more than enough problems in their home country to worry about Canada.
 

hinz

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Nov 27, 2006
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Not gonna miss their sub-prime businesses aka consumer financing here.

BTW, they still have a hack of mess to fix on former Wachovia books.
 

rafterman

A sadder and a wiser man
Feb 15, 2004
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Very difficult for U.S. or any foreign bank to compete against the entrenched "big six" banking oligopoly in Canada.
 

toguy5252

Well-known member
Jun 22, 2009
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No big surprise. They came here to enter the sub-prime business. it is a model that no longer works.
 

blackram

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Jul 31, 2008
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Very difficult for U.S. or any foreign bank to compete against the entrenched "big six" banking oligopoly in Canada.
Seems HSBC and ING Direct are both foreign banks, and they're doing okay. I think it's just the US banks that can't hack it. Maybe too many regulations that don't allow them to do stupid things.
 

SkyRider

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Mar 31, 2009
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Seems HSBC and ING Direct are both foreign banks, and they're doing okay.
ING's Dutch parent was in financial difficulty and maybe still is. HSBC is simply an amazing bank, they are truly a global bank as they are everywhere. Technically, HSBC is a U.K. bank despite its Hong Kong roots.
 

hinz

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Nov 27, 2006
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ING's Dutch parent was in financial difficulty and maybe still is.
Yes, the Haague is still bailing out ING Group after their disaster investments on leverging themselves to be the largest Commercial Real Estate owners of the world, among the financial giants. Still they are less ugly compared to Fortis and ABN Amro.

The group is going to be splited into Banking and Insurance divisions if I am not mistaken in 2011, 20 years after the founding of ING Group.

WRT ING Direct, I am not so sure what the Dutch are going to do with this division since ING Direct in Canada, US, Australia, Germany, Spain, France, UK and Italy are not integrated into one seemless operation where the client could switch or transfer funds from one ING Direct account say from Canada to another say in UK, or even bank accounts at Postbank in Netherlands.

Moreover ING Direct in America is going to be put on block for sale in 2013, as a condition for getting bailed out by the Haague.

It's funny to notice that both CEO and CFO stepped down right after the Dutch government bailed out are not Dutch, while the Chief Risk Officer of the group, who is a Dutch, is still on the job. For those who want to know, the former CEO is a Belgian and the former CFO is a Canadian.

BTW, the current CFO at ING Group if I could recall is an Irishman who was recruited from HSBC.

HSBC is simply an amazing bank, they are truly a global bank as they are everywhere. Technically, HSBC is a U.K. bank despite its Hong Kong roots.
Maybe before 2003 but not anymore after they took over Household International, aka HSBC Finance.

Those mainly Scottish expats and their Chinese, Indian sidekicks were saving so much that they had excessive deposits to squander by buying friendship to the Trailer Parks Americans, helping the latter to keep up with the Jones through wanton lending, but not to the point like Citibank via CitiFinancial, or even GE Money.

If you want to be absolute anal, you could say what HSBC did at HSBC Finance is similar to suddenly very loaded mainland Chinese men trying to get attention/feel accepted/fit in/be the kind of people middle/upper-class white Anglo-Saxon men seem to be by acting like sugar daddies to those has-been White ladies or their aspired trophy types wannabes White sisters, only to be "backfired" when those ladies fake the whole "relationship" before dumping the dudes, taking his money and run!! :eek:

Having said that, HSBC was lucky not to inflict serious damage to the point that in addition to USD $17 Billion or sort shares issuance to top up the balance sheet, they beg the Mandarin speaking Chinese Communists to bail them out. That would be a big tragedy.

BTW, Don Guloien, the hocho running Manulife nowadays started his career at Household International before joining Manulife.
 
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hinz

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Nov 27, 2006
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Is it true that CitiFinancial is leaving Canada?
Couldn't care much since Citi is pretty much in ruins anyway. :rolleyes:

At most, they keep their credit card portfolio in place, like those Petro-Canada Mastercard or Staples Mastercard.

BTW, I am fortunate I don't go down the road to borrow as a sub-prime borrower.
 

out4fun

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Jan 8, 2008
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Wells Fargo did some behind the scenes lending for "don't pay events" through retail chains...Citi Financial does the same...if they both leave, it would make this market less competitive and effect some of these retail promotions.
 

hinz

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Nov 27, 2006
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Wells Fargo did some behind the scenes lending for "don't pay events" through retail chains...Citi Financial does the same...if they both leave, it would make this market less competitive and effect some of these retail promotions.
Wells Fargo is too small to build up the scale in sub-prime market before the meltdown and I am surprised it takes them so long to throw the towel in Canada.

WRT Citi Financial, if I could recall, they are running and managing credit card portfolios at Sears Canada, while JP Morgan runs and manage credit card portfolios at Sears Holdings and the Bay in Canada. Don't be surprised Citi Financial could be forced to sell the portfolio at Sears Canada once the latter privatization by the parent company, Sears Holdings is completed.

BTW, HSBC Canada is probably the only game in town when it comes to lending for "don't pay events" through retail chains and the sub-prime lending in general. HSBC Canada maintains merchant relationship with stores such as Best Buy, Future Shop, The Brick, Henry's, and Bad Boy after taking over HSBC Finance Canadian subsidary in late 2008. It is if I am not mistaken remaining active after the closure of the US and UK operations.
 

rafterman

A sadder and a wiser man
Feb 15, 2004
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Coincidentally here is a short piece from the Globe's business news site announcing the sale of CITi's $2B credit card business to CIBC.

Be interested to see what they got in customers and credit lines and what they paid.

CIBC buys $2.1-billion Citi card unit
17:34 EST Monday, Jun 14, 2010

Canadian Imperial Bank of Commerce said Monday it has signed a deal to buy a $2.1-billion credit card portfolio from Citigroup Inc.'s Canadian MasterCard business.

The portfolio includes accounts associated with co-branded Petro Canada credit cards that offer the Petro Points rewards program.

“This acquisition is directly aligned with our strategy to grow our core Canadian operations,” CIBC president and chief executive officer Gerry McCaughey said in a statement.

“With our scale, platform and operating synergies, combined with our expertise in credit cards, we are confident this transaction furthers our strategic growth objectives.”

The deal is expected to add to CIBC's earnings during the first year following its closing, the bank said.

Under the agreement, before closing, non-performing accounts will be removed from the acquired portfolio and from Broadway Credit Card Trust, which has securitized certain Citibank MasterCard receivables.

CIBC said this is its third transaction since early March including the acquisition of the remaining 50 per cent of CIT Business Credit Canada and the purchase of a minority stake in Bermuda-based the Bank of N.T. Butterfield & Son Ltd.
 

hinz

New member
Nov 27, 2006
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Coincidentally here is a short piece from the Globe's business news site announcing the sale of CITi's credit card business to CIBC for $2+ billion dollars.

Be interested to see what they got in customers and credit lines for $2 billion.
Big deal! CitiFinancial is still in Canada for now.

It will be interesting to see whether CIBC is going to keep Mastercard, since CIBC credit cards are all Visa while Citi's credit cards are Mastercard with Paypass contactless technology. CIBC waives fees for PC Mastercard ATM withdrawals.

IMHO it will be a tough sell for CIBC to convince the current Citi credit card holders to switch to Visa by giving up the convienience to pay by using Mastercard paypass at Timmy's, Petro-Canada Gas Station, McDonald's and Loblaws stores when CIBC, unlike Royal Bank and TD Canada Trust does not enroll to Visa paywave.

Even if CIBC enrolls Visa paywave contactless technology, the Visa cardholders could only use the paywave at Second Cup, Subway, Country style and M&M Meatshops, despite the fact that both Visa paywave and Mastercard paypass if I could recall share the same technology infrastructures and theoratically compatible to use at either brand point-of-sale terminal readers here in Canada. :rolleyes:

BTW, CIBC minority stake in Bermuda-based the Bank of N.T. Butterfield & Son Ltd. puts the bank in direct competition with HSBC Bank Bermuda, the 2nd largest bank in Bermuda. For those who are in the know, Bank of N.T. Butterfield & Son Ltd and HSBC Bank Bermuda controls 92% of the market share.
 
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