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Email this5:26 pm
December 12, 2009
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This is no April Fool's joke, but just noticed this press release published April 1, 2019, that Stephen Smith and Centerbridge Partners, L.P., have completed the purchase of Walmart Canada Bank from Walmart Canada Corp. Included within the text of the release was an announcement that the bank, currently a Schedule II (foreign-owned bank), will be renamed Duo Bank. No reason as to why that name was chosen, but I would think it has something to do with the bank now being owned, principally, by two investors.
If you do not know who Stephen Smith is, he is the controlling shareholder in First National Financial Corp., which is the largest non-bank mortgage lender and the leading non-bank mortgage servicing company in Canada, and is the largest single shareholder in Equitable Group, Inc., which owns both of Equitable Bank and Equitable Trust. Furthermore, he is co-owner with Ontario Teachers Pension Plan of Canada Guaranty Corp., which is the third largest mortgage insurer in Canada (after CMHC and Genworth Canada). Centerbridge Partners, L.P., is a U.S.-based private equity asset management firm.
It's quite possible the soon-to-be-renamed Duo Bank be will be transferred to a Schedule I (domestic) bank, too.
Interestingly, a quick recent review of its financial balance sheet data showed that since the sale was first announced last summer, Walmart Canada Bank has nearly doubled its credit card receivables from ~$500 million to just over ~$1 billion. For comparison, PC Financial's credit card receivables is about ~$5 billion and is the largest non-"Big 5" bank credit card issuer in Canada, so the fact that Walmart Canada Bank has grown its portfolio so suddenly shows recent initiatives are bearing fruit.
While the blurb about Duo Bank is full of platitudes and meaningless phrases, they do mention that they look forward to launching new, simple, and affordable financial products and services "across Walmart Canada's footprint." Since PC Financial is rumoured to be working on their own no-fee prepaid credit card product to replace the fact that they no longer have banking products since the separation with CIBC that saw the creation of Simplii Financial in November 2017 and also launching PC Financial-branded ATMs in its stores, I wonder if we could see Duo Bank-branded ATMs and some sort of bank account and GICs?
Edit: The Duo Bank website is already live, but they're not yet updated on the OSFI site. However, they've already established their new head office address as they've been forced to move out of the shared premises that they shared with Walmart Canada Corp. at 1940 Argentia Road, Mississauga, Ontario. They're now at 1975 W. Credit Ave., also of Mississauga, Ontario. Looking at this Google Street View image, it's not an ostentatious building by any stretch. It's a single-storey, non-descript brown brick building that was most recently a Neptune/Cascades Flexible Packaging plant, so that definitely shows that they're not fussy about their offices and really want to keep their administrative costs to a minimum. 
Cheers,
Doug
8:00 pm
October 21, 2013
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Aw, shucks! I always thought Walmart Bank shoulda been renamed Uncle Sam's Treasury (after its founder, among other things...).
An opportunity lost! C'est la vie!
I've never understood the popularity of WalMart. I can almost always get a better price somewhere else, one way or another. And the parking lot seems to be a magnet for aggressive or incompetent drivers who continue to display their skills with their shopping carts. I don't go there; I figure I've saved tons on body shop work alone by staying away! It's all about the hype. Maybe the bank will be the same.
in any case, I doubt I'll be a customer, be it Uno or Duo.
It's a good location for them. Close to the airport, toll highway, Starbucks, Microsoft, and a HIlton hotel. And probably relatively cheap too. Fits their image.
9:22 pm
December 4, 2016
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The Walmart Master Card was pretty simple and easy to use. The only major draw back was the rewards were not competitive.
If they keep the relationship with Walmart they could expand the CC portfolio with a Walmart World Elite. That would be neat.
Goes against the value based theme of Walmart. It could bring a huge boost in applications.
No insurances. They could offer 2% cash back possibly. Still holding on to Tangerine card as they might do something similar. It is going to happen some day!
9:29 pm
December 12, 2009
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User230 said
The Walmart Master Card was pretty simple and easy to use. The only major draw back was the rewards were not competitive.If they keep the relationship with Walmart they could expand the CC portfolio with a Walmart World Elite. That would be neat.
Goes against the value based theme of Walmart. It could bring a huge boost in applications.
No insurances. They could offer 2% cash back possibly. Still holding on to Tangerine card as they might do something similar. It is going to happen some day!
Yeah, I've never had a Wal-Mart Rewards MasterCard, but I liked that you could (a) pay your bill at the cashier at Wal-Mart, (b) that they had a pre-authorized debit plan you could set up to pay either the minimum monthly payment or full statement balance on your statement date, and (c) that you could redeem your Wal-Mart Rewards with as little as $10.00 (instead of $20.00 at Loblaw-owned stores). Their rewards are somewhat uncompetitive, but for a no annual fee card, it's not bad when you consider that Scotiabank's SCENE Visa has effectively devalued the rewards by making you redeem 1250 points for an adult movie ticket instead of 1000 points so that it's effectively not a full 1% cash back credit card anymore. Tangerine Money Back Credit Card is only 0.5% on all other purchases, so it's not that compelling. Wal-Mart's is not too bad. And, you can buy more variety of things at Wal-Mart than Loblaw-owned stores.
I believe Duo Bank has every intent on maintaining the Wal-Mart relationship, but in looking at their website, I'm not so sure they will launch savings accounts and term deposits. I'd say their major priority will be on trying to acquire additional co-branded retailer credit cards. Perhaps they might try and do a partnership with Amazon.ca to launch a new Amazon.ca MasterCard or an Amazon.ca Visa? They might potentially try and acquire the Costco MasterCard and/or Hudson's Bay MasterCard card portfolios away from Capital One (Canada Branch)...or, they might try and make a bid for Capital One (Canada Branch), if Capital One Financial Corp. in the U.S. were looking to sell it, of course. There's not a lot of other retailers left in Canada - they could try and snag some private-label credit card business from Desjardins (the new leader in that business).
As far as insurance goes, I definitely think that'll be their other priority - launching other types of insurances, like mobile device protection insurance and trip cancellation insurance. So, you'll likely get your wish there.
Looking at their "partners," I see they use Millennium 1, which is a back office outsourced contact centre provider that also handles calls for PC Financial's MasterCard customers. Combine that with G+D that issues their credit cards, you can see they run a very lean, core operation out of their new, non-descript former packaging plant head office building. That's another reason why I'm inclined to think they won't launch savings accounts and GICs, but who knows?
Cheers,
Doug
12:36 am
February 20, 2018
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Duo bank offering gics thru rbc brokerage
7:35 am
December 12, 2009
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Bud said
Duo bank offering gics thru rbc brokerage
Yes, despite incorporating in 2009 or so as Walmart Canada Bank, they had not been a CDIC member as they had not been offering deposits. That changed in late August/early September this year when Duo Bank of Canada began offering 1-5 year GICs in the broker channel.
They don't seem to post their GIC rates on CANNEX, nor do we know which brokerages they're available through, but per RBC Dominion Securities' GIC rate sheet:
Figure 1: Screenshot from October 15, 2019, of RBC Dominion Securities GIC rate sheet showing Duo Bank of Canada's 1-5 year GIC rates
Cheers,
Doug
5:27 am
September 30, 2017
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Duo Bank of Canada rebranded to Fairstone Bank of Canada. Noticed the name change on TDDI GIC rate sheet.
10:41 am
January 12, 2019
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hwyc said
Duo Bank of Canada rebranded to Fairstone Bank of Canada. Noticed the name change on TDDI GIC rate sheet.
Recent article ⬇
.
Dean
" Live Long, Healthy ... And Prosper! "
8:18 pm
December 12, 2009
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hwyc said
Duo Bank of Canada rebranded to Fairstone Bank of Canada. Noticed the name change on TDDI GIC rate sheet.
Yep, thanks for posting this in a reply to this thread. Good update! Meant to post this myself when checking the OSFI "Who We Regulate" page last weekend. Legal name changes of federally-regulated financial institutions are, interestingly, one of the administrative changes OSFI can approve administratively without having to be gazetted and/or requiring Order-in-Council approval by the federal cabinet.
Fairstone Bank of Canada (nee Duo Bank of Canada and Wal-Mart Canada Bank) wholly owns Fairstone Financial, Inc., (nee CitiFinancial Canada, Inc.), which it purchased last year. It's opted to take the name of its subsidiary as part of a unified branding strategy.
Cheers,
Doug
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