Might Santander achieve Canada?
However whereas the market appears prepared for a brand new entrant, it gained’t be simple to achieve 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 folks 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 enable it to take these deposits and broaden its companies. In April, the finance minister authorized its software, however it nonetheless wants the go-ahead from the banking regulator, which has a yr from the minister’s approval to decide.
To this point, it seems like Santander plans to comply with 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 collect 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 Shopper 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. But it surely’s not clear what number of Canadians would need to switch over their banking for only a larger rate of interest on their deposits, mentioned Liquornik.
