Dundee Bank of Canada
The Dundee Bank
has experienced a change of ownership and direction in just a short year since its inception. The Dundee Bank of Canada was first created in Toronto in 2006, as a Schedule I, Canadian chartered bank, to market it's banking products to financial advisors only, with no direct client contact. Dundee Bank was then part of the Dundee Financial Group, which is a division of Dundee Wealth Management Inc.
The business strategy of Dundee Bank involved selling mortgages, other loan products and high rate investments savings accounts through financial advisors. It heavily marketed its high rate accounts that were sold in an A series, offering a daily interest rate of 3.85% to the client, with 0.25% fee to the commissioned advisor. The F-Series paid 4.1$ to fee based advisors. Dundee Bank's ultimate goal was to capture the client funds from direct deposit in the "Big Six" Canadian banks. The larger banks sell their own bank products and are in a better position to win the underlying client's funds.
Change of Ownership
The worldwide disruption in financial markets in 2007 to the present, led to a credit liquidity crisis, and diminished consumer confidence in the financial stability of Dundee Bank's banking products. Soon thereafter, Scotiabank purchased Dundee Bank of Canada from DundeeWealth Inc for $260 million. Scotiabank
also purchased an 18% interest in DundeeWealth Inc., with analysts predicting Scotiabank to obtain majority control of DundeeWealth in the near future.
Soon after Scotiabank
purchased Dundee Bank of Canada, it closed Dundee's mortgage broker division, as Scotia already had two mortgage divisions of its own. Many Dundee employees lost their jobs or were transferred to Scotiabank's existing divisions. Further re-structuring is expected of Dundee Bank of Canada, as Scotiabank continues to assess its role.
Dundee Bank of Canada Today
After Dundee Bank's change of ownership and initial shakeup, it now continues to market short and long term Guaranteed Investment Certificates and the Dundee Investment Savings Account, a revamped version of the former high yield investment accounts. With Scotiabank's financial and institutional backing, Dundee Bank of Canada holds promise for a bright future in marketing its banking products to investors. Additionally, Scotiabank is expected to expand its investor based banking products and wealth services for corporate clients. Dundee is a member of CDIC and CBA.
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