Canadian banks are chasing billions of dollars right into aboriginal communities.
The Financial Post is reporting that more Canadian banks are “pushing the envelope” in aboriginal communities in order to earn their business.
Analysts say that this boom of economic growth in Canadian Native communities is largely due to billions of dollars in recent land claim settlements that are trickling down the pipeline, as well as better access to resource revenue, the paper reported.
The Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce and the Bank of Montreal (BMO) are a few of the banks competing for aboriginal business. The Post said Toronto-Dominion has “more than $1.5 billion in First Nations [land] claims under administration and investment management” and that the BMO has over $1billion. The paper also estimated that in the next 12-18 months, when a half a billion dollars from land claims is expected, that new flux of income could mean a boom in the loan business, as business will open and new projects will need secure funding.
“They’re going to become very attractive to the banks,” André Le Dressay, director of the Tulo Centre of Indigenous Economics in Kamloops, B.C., told The Post about the growing number of aboriginal communities that are finding ways to support ongoing revenue.
And Canadian banks also have their eye on an emerging market.
According to the report, small businesses, primarily run by young, urban aboriginal entrepreneurs, are growing six times faster than the non-aboriginal market. Clint Davis, the vice-president of aboriginal banking at TD Bank, told the paper “They’re the growth generation.”
As this momentum continues, bankers like Stephen Fay, head of aboriginal banking at BMO, say that they will make moves to accommodate the aboriginal community by providing specific products and lending options. “Once it starts to move,” Fay told The Post, “you can’t stop it.”
To read the entire article, visit FinancialPost.com.