article-aa

Vachon warned Canadian startups in the cybersecurity or artificial intelligence spaces to be wary of receiving money from Chinese venture funds, because of the potential threat to domestic national security. “It will create barriers; it will create questions. It will make it hard for you to sell to markets like the U.S.,” he said in an interview with The Logic’s founder and editor-in-chief David Skok at tech conference SaaS North. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: There is big money in China’s venture capital market, but growing national security concerns have led to nearly 30 percent fewer VC deals involving Chinese firms in the U.S. between 2018 and 2019, according to data from Preqin. Canada, too, is vulnerable, having not been in China’s good books since its arrest of Huawei CFO Meng Wanzhou at the behest of the U.S. in 2018. A 2019 report to Parliament from the national intelligence and security committee warned that China posed a significant national security threat to Canada particularly by “mobilizing” the business community and students to influence politics. Vachon noted that not all startups need to stay away from Chinese money: “If you’re selling toys, and you want to sell them anywhere in the planet, get money from China—that’s no problem.”

article-aa

Nest Wealth said it will remain independent, but the investment will help National Bank expand its digital offerings, including a new online savings account. (The Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is National Bank’s second fintech investment in two days. On Monday, the bank led a $16.2-million round in Montreal-based Flinks, which plans to use the money to launch a new wealth management product. Nest is similarly planning to use this investment to expand National Bank’s offerings for portfolio managers. The bank operates the largest platform for independent investment dealers and portfolio managers. Nest won’t just be using the new funding to assist National, though—it’s also planning to expand into the U.S.

article-aa

Luge Capital, Panache Ventures and Intact Ventures also invested in Flinks, which is looking to open a U.S. office with the funds and double its 65-person staff in the next few months. (Betakit)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Flinks is also planning to use the funds for a new wealth management product. That’s a crowded, but lucrative, area of focus for a number of Canadian fintechs. In January, The Logic reported that Toronto fintech d1g1t was expanding to the U.S. after passing $50 billion in assets under management in part by partnering with large financial institutions. Flinks is taking a similar approach, and has relationships with several members of the Big Five banks in addition to projects it’s working on with National Bank. Flinks’s raise is the latest example of how fintechs continue to attract investors despite the pandemic. In London, for example, 39 per cent of all tech investment in 2020 so far went to fintechs.

article-aa

A survey of responses from 8,337 retail banking customers over August and September by J.D. Power found America’s favourite bank is Canada’s second-largest lender. (Bloomberg)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: For over a decade, TD has touted itself as “America’s most convenient bank.” It services over nine million customers through 1,250 locations in the United States, offering its U.S. customers digital banking “while excelling at branch service and online banking satisfaction,” J.D. Power said in a statement. Those qualities saw it beat out American competitors like JPMorgan, Capital One, Wells Fargo and Bank of America for the first time since the survey was launched in 2017. TD didn’t make it in the top 10 banks in the study’s previous years. Last month, it was designated a globally systemically important bank.

article-aa

Scotiabank raised dividends by three cents to 90 cents per share and saw two per cent overall profit growth, driven by a $262-million rise in international banking profit from 2018. BMO reported one per cent profit growth, did not adjust its dividend rate and put aside $306 million for credit losses, up from $186 million in 2018. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Scotiabank has the biggest overseas presence of the big six banks, and has recently focused on international expansion in four Latin American countries—Mexico, Chile, Colombia and Peru—including a $2.9-billion majority stake purchase of Banco Bilbao Vizcaya Argentaria in Chile, and a $130-million controlling stake acquisition in the Banco Cencosud in Peru. This focus seems to have paid off—international banking earnings are up 90 per cent from a year ago. Meanwhile, the bank is selling operations in nine Caribbean countries, and is engaged in a standoff with the prime minister of Antigua and Barbuda over the sale in the country. Meanwhile, BMO has focused on the U.S. for international growth: earnings in this division saw 1.1 per cent growth—that’s the slowest since the fourth quarter of 2017, and is largely driven by increased loan loss provisions. BMO CEO Darryl White also cited escalating trade tensions as a factor in the tepid results.

article-aa

Louis Vachon, the bank’s CEO, said it can’t find enough projects in Canada to meet its lending targets in renewable energy. Instead, the bank is financing projects in U.S. and Europe, Vachon said at the bank’s annual meeting. It has no plans to reduce lending to the oil and gas sector. (Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The National Bank has had mixed results in financing green initiatives, which could help explain its conversatism on the file. It expects to lose money on a $10 million loan owed by Téo Taxi, a Montreal-based electric vehicle company that went bankrupt in 2018, after the company fumbled the development and roll-out of its core technology (the bank’s chances of getting their loan back could change if Pierre Karl Péladeau if successful in reviving Téo). “We have to lend based on the technology that is there,” Vachon told shareholders at the meeting. However, the bank may feel more pressure to make bold decisions on green financing  in the coming months and years, as investors and governments increasingly urge lenders banks to disclose, and grow, their sustainable financing.

article-aa

David Rozon, associate vice-president of technology banking for Ontario, is going to Scotiabank. Brent Layton, a managing director whose remit includes technology and sustainability banking, will join CIBC. (Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: National Bank’s technology division has lost a number of top employees in recent months as rivals are showing a greater interest in the tech sector. National Bank is still a key player when it comes to tech financing: the company co-led an equity raise by Shopify in 2019 and was a lead underwriter for Lightspeed’s IPO earlier this year. Competition in the space is heating up with BMO and CIBC in particular looking to sign more deals with tech companies. In August 2018, CIBC poached Eric Laflamme from National Bank to lead the Quebec region of its innovation banking division. The banks’ increasing interest in startup financing is bringing them head to head with Silicon Valley Bank, which got a license to operate in Canada in March. Earlier this month, CIBC got a US$55-million credit facility for Lightspeed, taking over a US$15-million credit facility that Silicon Valley Bank had been providing.

article-aa

Canada’s sixth-largest bank had $552 million in profit this year compared to $550 million in 2017. Earnings at its financial markets arm declined 17 per cent.  Meanwhile, Laurentian Bank will cut 10 per cent of its staff after profits dropped 33 per cent to $40.3 million in its first quarter. (Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: While the earnings of the big banks have been boosted by their presence in international markets—BMO and Scotiabank both reported growth overseas yesterday—the smaller financial institutions have been hurt by uncertain financial and capital markets.

article-aa

The Loblaw subsidiary launched a no-monthly-fee bank account linked to its loyalty program. It marks PC Financial’s first move back to everyday banking since it and CIBC severed ties in 2017. (The Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The new account links to Loblaw’s PC Optimum loyalty program. The retailer merged two existing programs—Shoppers Optimum and PC Plus—in 2018, and it’s since grown it to some 18 million consumers. The new bank accounts will allow customers to earn loyalty points on every dollar they spend, online bill payments over $50, setting up direct deposit and other moves. PC Financial president Barry Columb said consumer research has shown customers want “rewards.” Building loyalty helps Loblaw retain customers and boost profits. It can also mine the data to deliver targeted ads, among other things.

article-aa

SoftBank Group is selling British chipmaker Arm to Nvidia for US$40 billion in cash and stock. The Japanese conglomerate will still remain somewhat tied to Arm, through its ownership stake in Nvidia, which is expected to be under 10 per cent after the deal closes. SoftBank’s stock was up nine per cent on the news. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The deal is estimated to be the largest transaction the semiconductor industry has ever seen, merging two electronics businesses that have captured vastly different product segments in the semiconductor space. But it’s not a done deal just yet—Arm is one of the U.K.’s most successful tech companies and the deal may be subject to a number of regulatory hurdles. SoftBank founder Masayoshi Son has admitted to having regrets “tactically” in his investments (namely, the WeWork debacle), but with the sale of Arm, he appears to be freeing up cash for other pursuits. Bloomberg reported that SoftBank is reviving talks about going private, though deliberations are at still at an “early stage.” Part of the reason might be to face less public scrutiny after recent media reports suggested SoftBank was using equity derivatives to bet on tech stocks, leading to a sharp investor pullout that cost the multinational about US$9 billion.