Canadian Western Bank May Buy Equipment Finance FiJune 11 (Bloomberg) -- Canadian Western Bank, the smallest of the country’s eight publicly traded banks, plans to make an acquisition to expand its equipment financing business, Chief Executive Officer Larry Pollock said.
“One of my desires is to increase our penetration into the equipment-lending business,” Pollock said today in an interview in Toronto. “It is a sector that the big banks don’t spend much time looking at. They don’t understand it.”
Canadian Western competes with companies such as General Electric Capital Corp. and John Deere Capital Corp. in equipment lending, Pollock said. The Edmonton, Alberta-based bank is talking to these companies and will announce the acquisition of one their finance programs, Pollock said.
The bank, which has a market value of about C$1.05 billion ($954.9 million) has at least C$180 million that could be used for acquisitions, Pollock said. He said any acquisitions would have to add to earnings and fit the bank’s strategy, which includes lending to companies that service Canada’s oil and gas industry.
“I think that the one piece that’s missing is bulking up in the banking side,” Pollock said.
Pollock also said the bank will soon announce it has signed a “major” client to expand its trust business. He would like to increase the bank’s assets under administration to about C$10 billion within a few years, from C$4.5 billion.
Insurance Rules
Canadian Western, which hasn’t posted a quarterly loss since 1988, does business mostly in Alberta, British Columbia, Saskatchewan and Manitoba. The bank is trying to capture more deposits outside those provinces through its online bank.
The lender may also sell its Canadian Direct Insurance Corp. policies directly on its bank Web site now that Canada’s financial-services regulator is allowing banks to do so, Pollock said.
“That’s exactly what we were waiting for,” he said. “Now we can put Canadian Direct on our Web site.”
Pollock, 62, is in Toronto along with Alberta Investment Management Corp. CEO Leo de Bever and other Edmonton executives to meet investors and clients. The bank is finding more interest from institutional investors outside Canada.
“Our biggest shareholders now are in the U.S.,” Pollock said, listing Fidelity Investments and William Blair & Co. as examples. “The institutional interest from the U.S. has been significant and quite surprising to me.”
Canadian Western rose 61 cents, or 3.8 percent, to C$16.81 in 4:10 p.m. trading on the Toronto Stock Exchange. The stock has risen by more than a third this year.