Equitable Bank acquires Concentra Bank | Page 2 | EQ Bank | Discussion forum

Profitability is a concern for investors who buy stocks and bonds. For those of us depositing up to CDIC limits, it's hardly a concern. The worse that would happen would be that the FI would crash in the middle of a GIC term and you would lose the remaining anticipated interest but could reinvest elsewhere perhaps even at a better rate.

When so many were biting their nails over Oaken's (Home Capital) anticipated demise, I was able to stock up on their 5 yr GICs at above-market rates. These were very helpful in balancing the last few years of low rates.

While WealthOne was founded with the Chinese audience in mind, all their staff speak English, and all their senior managers were educated in Canada and are a well diversified group. https://www.wealthonebankofcanada.com/Personal/AboutUs/LeadershipTeam/ I don't see them as being limited by their Chinese connections except inasmuch as they don't appear to speak French, probably not available to QC. They've been very good to deal with, and i am not Asian.

Assuming they get going financially, they may very well expand their focus. It's the face of Canada of the future, a very mixed group.

As for traditional families, so-called, vs others, I don't think it's really a big issue for joint accounts. Lots of spouses who care about each other will continue to see a need for joint accounts, especially as they age. They don't all have separate piles of wealth to sustain them. Divorce rates are high but not overwhelming. And a lot of parents, divorced or not, continue to want to set up joint accounts with their children and even grandchildren. There will always be a need. Some FIs just aren't in the ballpark.

Funny you say that, canadian.100, because despite the fact they've been unfailingly polite and helpful on the phone I have the same unease with Wealth One, in my case also due to their data breach and also their (as has been said) "Chinese connections". Not sure if anyone else feels that way but I do, though it hasn't stopped me from loading up to CDIC limits. Maybe I'll regret it some day.

Well, there are things I dislike about every FI. It's a matter of degree, I guess, and of weighing what you consider most problematic. I find that I have to put up with a lot of dreadfully organized statements, for instance. The incompetence displayed at what amounts to reinventing the wheel on this score is scary! How hard can it be?

It seems to me that it's reasonable to think that any FI could have a breach. And many have, including some large established profitable ones that could have afforded the best available systems.

My thinking is that once they've had an issue like this the bad publicity is more likely to make them more careful, perhaps more careful than those who have not experienced an issue, but I could be wrong.

The bottom line is that I don't think we ever know what is going on
that we can't see. We don't really know how secure any of these FIs are, but neither can we avoid dealing with them.

I'd be happy with an old fashioned pass book, but that ain't gonna happen!

Jim Sherat said
Getting back to 'EQ' earlier in this thread ... I was about to pull the trigger on building 5yr GIC ladders with them for both my and my wife's TFSAs.

Was trying to determine if the news could have any implications, good or bad, for following this strategy? Possibly a reduction in their currently published rates ?
I've been sitting on high 5 figures removed from Meridian TFSAs late in Dec, and yet to contribute our 2022 $6K amounts.
At this point I feel I can be at peace with the rates shown, ie. up to 2.85% [5yr], even if Central Banks finally do make a move, and FI rates increase further.

Thoughts? Wait or Go? Funds have been sitting in HISAs at only 1.25%, so losing money daily.  

if ur going with EQ, I would recommend just park at 1y 2%. At the end of 1 yr, u can lock in to a longer term at a higher rate if u wish. Losing 85bps in 1y which you only need ~21bps better on a 4y GIC 1year from now. 2.85% is not attractive to lock in to a 5y rate at this moment. Or the 2y at 2.5% which is also superior to the 5% 2.85% in my mind. But yes, do something since ur losing ~1% and thats a lot for just waiting.

My $0.05 worth.

I don't use it but I thought the ladder strategy was precisely so you stop trying to guess where rates will be in the future, no? And you're taking it as a given that rates will be higher in a year because that's the current consensus, but anything can happen and they may in fact be lower.

It's a bit of a guessing game no matter what you do, and I can't say my idea is necessarily any better, but here's another option:

Stagger your purchases. Buy a one-year GIC now with 20% of the money, then a 2 year in a couple of months with another 20%, and so on to end of year. Next February, you can switch the first one to a five year at presumably higher rate. As the others mature put them into five years also.
It's a kind of compromise solution that enables you to take advantage of higher rates as they appear during the year - we hope. It gives you the flexibility to grab a great rate if it should come up.

Nonetheless, lots of people need joint accounts, financial planners often recommend them, and most FIs offer them.

Jim Sherat said
Getting back to 'EQ' earlier in this thread ... I was about to pull the trigger on building 5yr GIC ladders with them for both my and my wife's TFSAs.

Was trying to determine if the news could have any implications, good or bad, for following this strategy? Possibly a reduction in their currently published rates ?
…

I don't think the Concentra purchase will be much effect on EQ Bank rates.

Concentra Bank is much smaller than Equitable Bank. Concentra has around $11 billion of assets. Equitable Bank has around $36 billion of assets.

I expect more impact on Concentra, like the end of the 1.55% Wyth Financial HISA.

AltaRed said
Loonie has a valid point that as long as there is CDIC coverage, one's assets are not at risk. The question is more one of comfort level.

When HCG went through its coronary, many depositors were uncomfortable even within CDIC limits, Loonie being an obvious exception, and did well with the higher rates HCG had to offer to keep and/or attract deposits.  

On that note, ultimately, though not initially at closing, I do expect Equitable Group to file regulatory paperwork to formally amalgamate Concentra Bank into Equitable Bank and Concentra Trust into Concentra Trust, to fully realize operational and legal synergies and eliminate wholly duplicative legal and regulatory compliance costs. It makes sense for them to maintain separate bank and trust company CDIC issuers; it doesn't make sense for them to maintain four bank and trust company CDIC issuers.

I don't know that Concentra Bank had this in their strategic plan (i.e., an acquisition), but I do think the rebranding and expansion into the direct-to-consumer business model of deposits and mortgages was part of a strategic plan to firstly legally rename the company as Wyth Financial Bank Canada (or similar) and then to either (a) sell shares in the parent company company in an initial public offering or (b) sell shares to another buyer, whether strategic or private investor. Equitable Group very likely approached Concentra Bank, with the heads of investor relations first meeting and things progressing to meetings between CEOs and, ultimately, their respective boards.

Ultimately, though, one brand will be utilized, and I do fully expect them to consolidate legal entities somewhat, which will mean impacts in terms of CDIC insurance limits on merged entities. Refer to the CDIC website for more details.

As to Norman1's point, the demise of Wyth Financial does not mean the complete demise of the Wyth Financial online banking platform. Time will tell, but perhaps EQ realized their platform, as innovative as it was, was holding them back in several ways, so they may look to migrate the EQ Bank customers to the Wyth Financial platform, and rebrand the merged platform as the EQ Bank online banking platform, with all customers becoming EQ Bank customers.

Cheers,
Doug

It's all on CDIC site:

"What happens to coverage if two CDIC members merge?
If two or more CDIC member institutions amalgamate, insured deposits made at each institution before the amalgamation continue to be insured separately up to $100,000 per depositor per category, as if the institutions had not amalgamated. The amount of separate coverage is reduced by any withdrawals made from those separate deposits, or as term deposits mature (or are redeemed). Coverage with respect to any deposits made with the entity that resulted from the amalgamation depends on the aggregate volume of the deposits you made at the institutions before they amalgamated.

If your existing deposits (i.e., the sum of deposits you had with the entities immediately prior to the amalgamation) add up to a total of $100,000 or more, any new deposits you make at the institution after amalgamation will exceed the $100,000 maximum, so they will not be insured by CDIC.
If your existing deposits add up to a total of less than $100,000, any new eligible deposits you make at the amalgamated institution will be added to those previous deposits, and the total will be insured to a maximum of $100,000."