Analysis: ING Direct may appeal to Canada banks but fit not ideal
TORONTO (Reuters) - Canadian banks looking to grab a big chunk of market share will likely relish the chance to bid for ING Groep's local online unit, should it go on sale, but the business would be a less-than-perfect fit for the country's bricks-and-mortar banks.
ING said on Thursday it was "reviewing strategic options" regarding its Canadian online bank, which offers discounted mortgages and high-yields savings accounts.
It is estimated to hold just under C$30 billion ($30 billion) in deposits and about the same in residential mortgages, a bit more than 3 percent of the Canadian market.
The expected sale is part of a series of asset divestments by ING, which must raise funds to repay a bailout form the Dutch government during the 2008 financial crisis.
For Canada's six biggest banks, which control nearly all of the country's consumer and business lending industry, the takeover represents a rare chance to add a sizeable chunk of deposits and customers.
The Canadian banks have not commented on whether they would be interested in the ING business, but there is likely to be no shortage of domestic suitors, said Barry Schwartz, a portfolio manager at Toronto's Baskin Financial Services.
"Let's face it, the growth in Canada is limited. It's now just a fight for market share," he said. "I would imagine this will be a hot commodity."
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With limited growth avenues at home, Canadian banks have looked abroad to expand. Continued...