Saturday, May 27, 2006

Canadian Banks Want to Merge

The banks are rumbling about mergers again. This after I recently read on one of those subway newsreaders that TD Canada Trust had earned $200 million in profit over last year, rising to over $700 million. Now, I don't know about you, but I can barely conceive of those numbers. I believe TD Canada Trust is one of the smaller banks, so we can confidently look forward to billion plus profits from other Canadian banks.

But the banks assert that they're too small, that they need to merge so that they can compete on the international stage. Apparently, Canadian companies working abroad need the choice of banking with their home banks and not be forced to go to a foreign bank. But right now Canadian banks are too small to give these companies that choice. Furthermore, they may need the 10% rule lifted so that foreign banks can buy a large chunk of them, thereby giving them a bigger boost on the world stage. My problem with all this is that they would do better on the world stage if they did better here at home first. If you don't have a solid foundation of service here, you cannot build up and out and succeed no matter how big you are.

I used to bank with Canada Trust. It was a great bank. No matter how long the line-up, no matter which branch, you always got to a teller within 5 minutes, a service milestone unheard of and unachievable in any other bank then and today. They had internet banking practically before anyone else. They were great on the phone. And their charges (did they have any?) never made my blood boil. Then TD bought them out. I moved. TD tellers had had a habit of embarrassing me, and I'd moved from TD before that merger, so no way was I staying with CT in its new incarnation. I took long enough to find a new bank to see service plummet pretty quickly, confirming me in my decision.

The only bank I haven't tried is Royal Bank, but I'd heard horror stories, looked at their service charges and their lack of services in comparison to other banks at the time, and nixed them as a choice.

The basic problem with the banks is that they don't have a clue how to handle their bread and butter customers. They're only interested in the big deals, leaving small businesses and consumers in the dust.

One of the ways they're talking about how to seduce us into OK'g a merger is by agreeing to improve small business services. They should do that now. Small businesses are the backbone of the Canadian economy, and if they're so concerned about the economy they should start investing in them instead of their usual genuflecting NO to their requests. Furthermore, the banks have no business complaining about their lack of competitiveness when they turn customers like me away. I was a sure bet for the usual bank products, but circumstances changed, and I had to redo my mortgage. Never having missed one, not one, payment, and having personal experience with me for over a decade, it should've been a no-brainer for my bank to redo the mortgage with me. Nope. Not interested. Then after I found a willing lender, they had the temerity to start bugging me because I had no products with them. Now whose fault was that?! Not mine. They blew it. And mine was not a lone instance. That's why I will never agree to mergers.

When I see Canadian banks providing services to individuals and small businesses, such that they grow the economy through us, instead of chasing big companies and losing money on pie-in-the-sky Enron-type dreams, then I'll agree that a merger may be warranted. Until that unlikely event, tough noogie!

3 comments:

Saskboy said...

I like ING, but use TD because I have a grandfathered-in checking account with no fees with $1000 balance.

http://lifeofbrex.blogspot.com/2006/01/what-would-you-expect.html
is all you need to know about Royal Bank.

ING Direct is the best bank in Canada, with PC a close second.

talk talk talk said...

I like ING too -- only decent place to save.

BRex's story is too too funny! I particularly like the cop turning to the manager and calling her behaviour criminal!! That's the stuff dreams are made of.

I've thought about switching to PC (a CIBC affiliate) but want to wait till some stuff shakes out.

BTW all banks offer free services with a minimum balance. But some, like CIBC, have upped it to $1,500. Also, there should be no reason for service charges because traditionally the difference between loan interests and savings interests is where the banks made their money. They just got greedy.

Certified Lunatic said...

The Canadian Banks couldn't organize a trip to the bathroom. The American Trust Babies that run the circus want to merge so they can cash in on their undisclosed stock options.

The Banks make their money off the backs of the BA and MBA slaves that work on contract gobilee gook hourly salary no pension no benefit joke employment living in their mommies basement I can't get my hands dirty mentality employees.

The banks make their money lending out $15 for every dollar deposited. It is an oligopoly rooted in lobbying the government for bank act revisions to make then absurdly profitable without merit.

If foreign competition was allowed there would be mass retirements of the privleged folks who brought it in and the Canadian banks would go out of business shortly thereafter.