Nick Noorani Website

TORONTO (CP) – Some of Canada’s biggest banks are aggressively
competing this fall to court the country’s booming immigrant
population, a largely untapped market of new clients worth an
estimated $3 billion a year.
With those big bucks up for grabs, many banks are racing win over
these deep-pocketed clients – particularly those from Asian
countries – before they even set foot in Canada.
For its part, Bank of Montreal (TSX:BMO) plans to hold free seminars
in Hong Kong and mainland China in the coming months to brief
prospective immigrants about Canadian banking, taxation, education,
real estate and culture.

Rita Trichur Canadian Press
Monday, October 02, 2006
Prior to their departure, new Chinese clients are able to establish
personal deposit accounts in Canada while also arranging
MasterCards, banking cards and residential mortgages.
“We want to be proactive,” said Peggy Sum, BMO’s senior vice-
president, Asian market. “All those things are important for
settlement.”
She added: “Our credit policies cater to the needs of the
immigrants. That is, we understand that they have no credit history
over here, and perhaps they don’t have immediate employment, but we
will help them buy a house or a condominium using other criteria to
adjudicate the loans.”
Bank of Montreal extends that same “immigrant friendly” credit
policy to other Asian customers by using referrals through five
correspondent banks in South Korea. “In India, we are about to sign
up with two Indian banks,” Sum said.
Canada accepts about 250,000 new immigrants each year with China and
India being the top two source countries.
While there is no set limit to the amount of money a new immigrant
can bring into the country, sums in excess of $10,000 must be
disclosed at the border.
Immigrants, however, are generally encouraged to bring enough to
support themselves for at least six months.
That’s creating a lucrative opportunity for Canadian banks given the
high savings rate in some Asian countries. In China, that number is
high as 40 per cent compared to a negative savings rate in Canada.
“It is cultural,” Sum said. “It is in their genes that they need to
save money.”
These savvy clients, she adds, are keen to save for their children’s
education and often invest heavily in RRSPs, RESPs and mutual funds,
while also subscribing to online discount brokerages.
“Competition is always heating up,” Sum said. “Everybody is going
after that market.”
And it’s no wonder given the overall market potential, said Dave
Ramsumair, director of local area marketing programs and
multicultural markets with Scotiabank (TSX:BNS), which is planning
to launch its own immigrant banking website by the end of October.
Conservative estimates peg the total immigrant market to be worth up
to $3 billion a year. Skilled workers represent about $1.5 billion
of that total, while those arriving under the family class and as
investors represent $1 billion and $400 million, respectively.
“This is good for Canada,” Ramsumair said, noting this debunks the
myth that immigrants are a drain on the system.
“Clearly, people do come with money. They don’t just come empty-
handed. On average they bring a significant amount of money that
gets invested here.
“They need to buy cars, they need to invest in small appliances for
their homes, and multiply the effects of all of that, it’s an
amazing growth for the economy.”
Scotiabank, with representation in about 50 countries around the
world, plans to leverage its international presence and
correspondent banking arrangements to widen the scope of its
immigrant banking services down the road.
“In many ways, it’s a new frontier in banking,” said Ramsumair.
But to really understand the full market potential, Sum suggests
taking a longer-term view. She points to research that suggests
immigrants’ earning power grows rapidly and exceeds the national
average by 25 per cent in their fifth year in Canada and by 37 per
cent in their tenth year.
Mark Whitmell, national manager, cultural and community markets with
RBC Financial Group (TSX:RY), said if Canada was able to eliminate
age, gender and cultural barriers, it could add about 1.6 million
people to the workforce and increase personal incomes by $174
billion.
“In terms of future growth, we expect that newcomers to Canada will
actually exceed the number of individuals born in Canada,” he added.
“It is quite an obvious opportunity from that perspective. So, if we
want to grow, if we want to acquire new clients, we know that we
have to play a role in helping newcomers be successful.”
In order to reach them, RBC too has set up a multilingual website
and can facilitate non-resident account openings online. The site
averages about 5,000 hits a month.
“The Chinese version is already about 35 per cent of the traffic,”
Whitmell said.
“We’ve launched that so that anybody, anywhere around the globe has
the ability to initiate that relationship with RBC – even before
they arrive in Canada.”