Canada could be getting a new bank with limited afternoon hours, on account of siestas.
Driving the news: Break out the sangria: Banco Santander, Spain’s largest bank and the fourth largest in Europe, is one step closer to setting up in Canada. Finance Canada has incorporated Santander as a regulated Canadian financial institution, per Bloomberg.
- After this crucial step, the bank is now awaiting approval from Canada’s top banking regulator to carry out business activities — a decision that could take a year to arrive.
- Santander has had a presence in Canada since 2015 when it bought auto-financing company Carfinco for $298 million. In 2021, it was rebranded Santander Consumer.
Why it matters: A foreign lender entering Canada is a rare occurrence that could diversify the banking sector. While Santander is unlikely to seriously challenge the sheer dominance of the Big Six banks, it could introduce some fresh competition to specific banking areas.
- For example, Santander can continue to build out its presence in auto financing. Or, it could focus on digital banking, which is its current strategy in the U.S. and Mexico.
Zoom out: The Big Six’s control of 95% of total bank assets brings immense stability to Canada’s banking sector, but also contributes to higher prices and slower innovation.—QH