In a sign of how competitive the market for high value home mortgage products – mortgages, second mortgages, home equity loans and lines of credit etc. – has become, TD Bank has announced that it will open some 300+ of its 1,100 branches on Sunday, in order to capture a bigger slice of the retail banking market.
The Financial Post reports that “all banks have increasingly focused on their domestic lending operations, the source of the lion’s share of profit as other traditional drivers such as investment banking and international businesses started to sputter.” TD Canada Trust’s executive vice president of branch banking, Kerry Peacock, told the Post that TD’s “experience is that when we are open in ways that are more convenient for our customers it does translate into additional business for us.”
An expansion of TD’s ‘bricks and mortars’ operations (as opposed to online banking) initially seems counter-intuitive. Yet, as the Financial Post notes, while “Canadians do most routine banking electronically, whether by bank machine or Internet, [they] still visit branches for more complex transactions such as negotiating mortgages or lines of credit.”
“Once you’re in the branch, they can talk to you about other products like mortgage insurance, home equity loans and that sort of thing,” John Aiken of Barclays Financial, told the Post. “And if you want to buy mutual funds, they can send you over to a financial planner in one of those cubicles and you can have a discussion about that.”
While the other major banks are expected to follow suit as they compete with each other for their market share of retail banking and mortgage lending, they are unlikely to grab market share from Canada’s online mortgage brokers, who have long offered services and quotes seven days a week. Nor are they likely to compete with the lower rates for most mortgage products that may be arranged from non-bank lenders by online mortgage brokers who operate without the fixed costs of the major banks’ retail banking operations.
