The Caisse de dépôt et placement du Québec is providing subordinated private debt for Ontario-based Meridian Credit Union. (The Logic)
Talking point: The Caisse’s investment comes one week after the Ontario Teachers’ Pension Plan backed Duo Bank-purchased Fairstone Financial, a consumer finance firm with 237 branches across Canada and $3 billion in assets. Meridian has 92 retail branches, increased its assets by 17 per cent to almost $24 billion, and is looking to continue that rapid expansion. The Caisse’s investment comes one month after Charles Emond, a 20-year Scotiabank veteran, was named CEO of the pension fund. Canada’s Big Six banks are increasingly investing in technology as they face pressure from both large tech firms, small tech startups and credit unions like Meridian, which launched its own digital bank in April 2019—all eating into their market share. But the growth of credit unions isn’t inherently an issue for large banks: it was actually CIBC that introduced the Caisse and Meridian and helped make the deal happen. That doesn’t mean big banks aren’t facing pressure, though. Today, for example, CIBC announced a five per cent workforce cut.