Scotiabank, TD leading bidders for Ally's Canadian operations | Ally | Discussion forum

Yatti said

Would be interesting to see Scotia pick it up.. Hopefully they leave the ING model alone..

I think Scotiabank will definitely leave the ING Direct business model alone and, that being said, it will be totally separate from Scotiabank (not linked to Scotiabank's online banking platform, no in-branch access, etc.). The only things I see them doing is: (a) withdrawing from The Exchange ATM Network within the next 12-18 months after closing and allowing ING Direct customers to use their own Scotiabank Cashstop ATM Network instead and (b) launching a no-fee credit card, either Visa or MasterCard.

Cheers,
Doug

The story that provided the "scoop" on RBC and TD remaining in the auction process for the international assets, in particular the Canadian operations, being handled by Evercore Partners and Citigroup was from CNBC.

Here is that article, in its entirety.

RBC Nears $4 Billion Deal for Ally’s Canada Unit: Sources

KAYLA TAUSCHE
Posted By: Kayla Tausche | CNBC Reporter
CNBC.com
22 Oct 2012 | 12:09 PM ET

Ally Financial and Royal Bank of Canada are closing in on a deal that would value Ally Canada at more than $4 billion, according to people familiar with the matter.

Both RBC and Canadian rival Toronto Dominion had been locked in a bidding war over the weekend, one of these people said, with TD still involved in the auction process. It remains unclear whether TD will move to top RBC’s late-stage bid.

An announcement could come as early as Monday, though talks remain fluid.

RBC declined to comment, and representatives for Ally were not immediately available for comment.

The former financing arm of General Motors, Ally had $15.2 billion in assets in Canada at the end of 2011, according to regulatory filings. The performance of the Canadian business has been lackluster since the crisis. For the six months ended June 30, Ally’s $165 million net income for the Canadian business represented a 40 percent drop from the same period a year earlier, filings show.

Still, the move represents incremental progress for Ally, which in May announced it intended to sell its non-U.S. assets.

The proceeds would go toward buying back a 73.8 percent the Treasury Department still holds in Ally, following its $17 billion bailout at the height of the financial crisis. Because Ally’s business lines converge in automotive and mortgage finance, the crisis left it doubly injured and hampered its ability to recover as quickly as pure-play businesses.

On Oct. 18, Ally announced a deal to sell its Mexico insurance business to Swiss insurer Ace Ltd. for $865 million. Goldman Sachs led the auction for that business, people familiar with the matter said, while Evercore Partners and Citigroup are leading the sales of the remaining international units.

Auctions for Ally’s European and Latin American operations are still ongoing, these people said, with announcements expected in the next two weeks.

—By CNBC's Kayla Tausche
@KaylaTausche

© 2012 CNBC.com
URL: http://www.cnbc.com/id/49503960/

Yep, indeed, it will be interesting to see for long it takes RBC to fully integrate Ally within RBC and whether they maintain the ResMor Trust Company & Ally Credit Canada Ltd entities or whether their assets and liabilities will be folded within existing RBC entities.

As Ally is mostly savings accounts, GICs and consumer loans, with no demand deposits/chequing accounts, moving them out of ResMor and Ally Credit would be fairly easy and notification to customer in advance of new banking information (i.e., account numbers, transit and institution numbers) and forwarding could be done for say, 6-12 months then that would be two less subsidiaries for RBC to maintain.

Cheers,
Doug

Cmore. said

In looking at the various news releases from RBC; they talk a lot about how this acquisition will strengthen their position within the auto financing sector and spend little to no time commenting on the future of Ally Bank as a deposit taking virtual institution. My bet is this side of the operation will be wound down once RBC receives regulatory approval and begins to integrate the operation.

Just one guy's opinion --- at least Scotia has been more clear that they intend to keep ING as a separate business entity.

While I don't think the Ally deposit operations of ResMor Trust Company will be wound down, as they are a good capital funding base for the loan operations, I do expect them to be folded into the RBC fold, perhaps even into the Royal Bank of Canada entity or maybe ResMor merged in with Royal Trust or something like that. Whereas ING Groep (always love that spelling, reminds me of the word 'grope'!) is giving Scotia 14-18 months from now to fully transition ING Direct Canada to a new brand (hopefully Scotia will do the right thing and do it within 8-12 months rather than drag this thing out!), there was no mention of a branding transition period. That leads me to believe RBC intends to move the deposits into the RBC fold, either at the Bank or Trust, as soon as practicable. As well, I don't expect Ally savings account rates (GIC rates may remain close to where they are at now) to remain near the top and I could see them coming down to a more "middle of the pack" level, say 1.5% which would put it higher than both RBC's high-interest eSavings account and ING Direct Canada's Investment Savings Account but lower than say Canadian Tire Financial Services or the Manitoba-based credit unions.

Cheers,
Doug