Phones are ringing steadily in the offices of Canada’s big banks as capital-starved European lenders seek buyers for assets. The Glove and Mail reports that facing a hole that has been pegged at about €100-billion ($140-billion) to insulate themselves from coming losses on sovereign debt, European banks have put on sale everything from loan portfolios to full businesses, say people familiar with the situation. They need to raise a lot of money to absorb the financial hit, and they need to do it soon.
Canada’s banks are in good shape and are among the few buyers of assets in the financial world, so they are among the first calls. For companies like Royal Bank of Canada and Canadian Imperial Bank of Commerce, which want to get bigger in the asset management business, there are plenty of tasty morsels on offer.
Yet so far, the six biggest Canadian banks are saying no, with a few exceptions, such as National Bank of Canada’s purchase of an investment management business from HSBC Holdings PLC for $206-million. As a result of doubts about the economic picture, continued scrutiny from banking watchdogs and poor timing – Canadian institutions are about to do their year-end strategy reviews – the banks aren’t buying…
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