May Santander reach Canada?
However whereas the market appears prepared for a brand new entrant, it gained’t be straightforward to realize traction, mentioned Michael Liquornik, president and principal of consultancy Fin-Serv Advisors Inc.
“That’s nice that you simply’re opening your doorways. However what’s the technique to really get individuals to deposit cash? As a result of it’s not like we lack banking choices on this nation,” he mentioned.
Santander hasn’t mentioned a lot about its plans but, and didn’t present remark for this story.
It has stored a low profile as it really works to safe a banking licence that may permit it to take these deposits and increase its providers. In April, the finance minister authorized its utility, nevertheless it nonetheless wants the go-ahead from the banking regulator, which has a 12 months from the minister’s approval to decide.
Thus far, it appears like Santander plans to observe the trail it’s taking within the U.S., mentioned Liquornik.
The financial institution launched its no-fee, high-interest on-line Openbank providing in each the U.S. and Mexico in current months, partly to assemble deposits to assist fund its auto lending enterprise.
Santander additionally has an auto lending operation in Canada after it agreed to purchase Edmonton-based Carfinco in 2014 for about $300 million. The financial institution renamed it Santander Client in 2021, saying on the time that it was “excited for the long run below this globally acknowledged model.”
It is sensible to fund its auto loans by way of deposits, since they’re cheaper than wholesale funding. However it’s not clear what number of Canadians would wish to change over their banking for only a increased rate of interest on their deposits, mentioned Liquornik.