The combined business will have more than 2 million customers and 250 branches
Two Canadian banks have announced that they have signed a definitive agreement to merge.
Fairstone Bank of Canada and Home Trust Company will combine as an entity with more than 2 million customers and a branch network across Canada with more than 250 locations. It will offer a range of financial services including residential and commercial mortgages, personal loans, credit cards, retail financing, auto financing, digital lending and consumer deposits.
A key focus for the enlarged bank will be providing services to those who are underserved by traditional banks, which it says is a growing and attractive segment of the industry given strong immigration and a large number of non-prime consumers.
It believes its omnichannel presence with branches, brokers, and digital offering, as a recipe for success.
Both banks are holdings of Smith Financial Corporation, headed by Canadian financial services entrepreneur Stephen Smith, its founder and CEO.
"This combination is characterized by a strong cultural fit and complementary strengths between Fairstone Bank and Home Trust," said Smith, who is chair of the board of directors of both organizations. "Having observed and engaged with both companies for many years, I am convinced that this combination of expertise in financial products and market-leading experiences will benefit our existing and future borrowers and depositors."
Smith Financial will be the majority shareholder in the combined entity while Fairstone Bank's current shareholders - Centerbridge Partners, L.P., Ontario Teachers' Pension Plan Board and management - will continue as minority shareholders in the combined entity.
Access to financial security
Yousry Bissada, president and CEO of Home Trust, added that the combination will be pivotal for improving access to financial security for all Canadians.
"Home Trust is a leader in the Canadian mortgage industry with a deep affinity to our customers, brokers, employees and other stakeholders,” he said. “The opportunity to expand our product offerings by merging with Fairstone Bank will greatly enhance our ability to help our clients achieve financial success. We are excited about the future and the many opportunities this new company will bring. Our focus will remain the same: delivering exceptional service to our customers and business partners as we combine our businesses."
The transaction is subject to customary closing conditions, including regulatory approvals.
