TD on deal hunt after BancWest bid as Canadian lenders pursue U.S. growth | Canada News Media
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TD on deal hunt after BancWest bid as Canadian lenders pursue U.S. growth

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Toronto-Dominion Bank is leading the charge of cash-rich Canadian banks seeking to make a foray in the United States and find growth away from their home turf where the Big Six banks already control nearly 90% of the market.

Billions of dollars of excess cash amassed during a nearly two-year moratorium on capital redistributions that was only lifted last month, and share prices close to record highs have given Canadian banks an acquisition currency to bet on the exit and downsizings of several European and international banks.

The sale of BNP Paribas’ U.S. unit, Bank of the West (BancWest), is the latest example of pent-up demand, with Toronto-Dominion Bank battling it out with rival Canadian lender Bank of Montreal, two sources familiar with the matter said.

Bank of Montreal said on Monday it will buy BNP Paribas’ unit, Bank of the West, for $16.3 billion in its biggest deal ever.

TD, Canada’s second-largest bank by market value, had looked at every major asset portfolio that came up for sale, including the U.S. businesses sold by Mitsubishi UFJ (MUFG) in September and BBVA in November 2020, the sources said.

It remains on the hunt for acquisitions in the United States after its narrow loss to BMO.

TD and BMO spokespersons did not comment on the bidding process or future growth plans in the United States. MUFG declined comment on the Canadian banks’ interest in their assets and BBVA did not immediately respond to a request for comment.

“Banking is a scale, technology and sophistication game,” said Brian Madden, portfolio manager at Goodreid Investment Counsel.

He added that Canadian banks already in the United States are well placed to scale up their U.S. operations since they “happen to be directly adjacent to the largest banking market on the planet.”

TD executives said earlier this year that the bank “will not be shy” to do a bank deal in the U.S. Southeast or in any area where it currently has operations, primarily on the East Coast.

Having missed out on some big acquisitions, TD is now likely to turn its attention to smaller banks, one of the sources said.

Along with TD and BMO, Royal Bank of Canada, Canadian Imperial Bank of Commerce (CIBC), Bank of Nova Scotia and National Bank of Canada round out Canada’s Big Six banks.

TD is one of the top 10 banks in the United States, and Royal Bank owns City National, the ninth-largest bank in California by deposits.

Royal Bank has also been undergoing U.S. expansion, although Canada’s biggest lender is more focused on its wealth management https://www.reuters.com/article/us-rbc-wealth-idUSKBN25U1I6 business in the United States.

And CIBC, which entered the United States in 2017 with its acquisition of PrivateBancorp, has said it is aiming for increased earnings from the country in the coming years.

Royal Bank did not respond to a request for comment. CIBC declined to comment.

BMO’S CHASE

BMO had pursued BancWest after losing out on the U.S. retail business of MUFG, Japan’s biggest lender, one of the sources said. MUFG ended up selling its U.S. retail business to U.S. Bancorp for $8 billion.

BMO made a competitive bid for MUFG’s assets, and its disappointment at losing out propelled Canada’s fourth-largest bank to move fast on the BancWest sale, the source said.

BNP Paribas, advised by Goldman Sachs and JPMorgan, entered parallel discussions with both TD and BMO, raising pressure on both bidders to finalise their offers as it fretted that regulatory headwinds could hamper the sale, the sources said.

BNP Paribas did not respond to a request for comment.

While TD initially made a low bid and subsequently raised it, BMO was more aggressive with its first proposal and was quick at declaring its offer “best and final” in December after offering a final sweetener, one of the sources said.

The deal will make BMO the 16th biggest bank by assets in the United States, up from 19th now, and lifts its assets to nearly $300 billion.

By merging with U.S. rivals, Canadian banks with an existing U.S. presence are expected to extract better returns from these businesses than smaller players, even when they appear to pay a premium as BMO did for BancWest, said Anthony Visano, portfolio manager at Kingwest & Co.

“Sometimes the strategic value trumps the financial consideration,” Goodreid Investment’s Madden said.

 

(Reporting by Pamela Barbaglia in London and Nichola Saminather in Toronto; Editing by Megan Davies and Matthew Lewis)

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Carry On Canadian Business. Carry On!

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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

The Canadian Press. All rights reserved.

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