New bank targets Chinese-Canadians
A new Canadian bank led by a former Bank of Nova Scotia mortgage executive is hoping to seize a share of the Chinese-Canadian market.
WealthOne Bank of Canada has opened offices in Vancouver and Toronto and has begun to take business and personal deposits and offer residential mortgages.
“At the heart of this bank is a team with a deep knowledge and respect for Chinese values and culture, and front line financial services managers who are fluent in Chinese and English,” says Charles Lambert, WealthOne’s chief executive, who earlier in his career worked as a managing director of residential mortgages at Bank of Nova Scotia. He also worked in the finance group before leaving Canada’s third-largest bank in 2012.
WealthOne Bank’s founding shareholder and vice-chair of the board of directors is Shenglin Xian, president of Toronto-based financial advisory firm Shenglin Financial Group Inc., which deals primarily with insurance products.
Lambert declined to disclose financials or targets for the new bank. But he said the primary client target is Chinese-Canadians. Most recent statistics peg the size of the fast-growing population at 1.3 million, he said, with about 70 per cent living in the Greater Toronto and Vancouver markets.
Like other challengers to Canada’s large established banks, WealthOne Bank hopes to win customers with competitive products such as high-interest savings accounts. Lambert said there will be some bricks and mortar offices and outlets, but most of the banking operations are expected to be conducted online and through call centres.
The new bank has been in development since 2012, and residential mortgages are at the forefront of the initial business plan.
The timing may not seem ideal, given recent reports of a housing slowdown in Greater Vancouver, and concerns about a potential cooling off of the hot real estate market in Toronto, the new bank’s other major target market.
But Lambert said he and other executives are undeterred.
“We do see these two continuing to be vibrant markets where we see continuing opportunity,” he told the Financial Post.
A report from National Bank Financial published Tuesday said recent data points to declining sales volume and falling average house prices in the Greater Vancouver market. The report says the slowdown predated a new land transfer tax levied on foreign buyers in the city.
Chinese nationals living in Canada and Canadians of Chinese decent have already captured the attention of banks, according to Stephen Clark, co-chair of the financial institutions practice at law firm Fasken Martineau DuMoulin LLP in Toronto.
Two wholly owned subsidiaries of Chinese banks, Bank of China (Canada) and Industrial and Commercial Bank of China (Canada), operate in Canada and are regulated by the Office of the Superintendent of Financial Institutions, he said.
Banks from Korea, India, the United Kingdom, and Italy have pursued expansion into Canada through similarly regulated subsidiary structures since the 1980s, but many ultimately pulled back, Clark said.
“It is a business plan that many of the foreign banks found had no legs as time moved on,” he said. “First generation new Canadians may appreciate the familiar aspects of the foreign bank’s operations in Canada but they eventually want the more robust service offerings of the big domestic Canadian banks.”