MACLEAN'S REPORTS

BUSINESS

What a rising young Canadian loan company taught the Bank of France

Peter C. Newman February 8 1964
MACLEAN'S REPORTS

BUSINESS

What a rising young Canadian loan company taught the Bank of France

Peter C. Newman February 8 1964

BUSINESS

What a rising young Canadian loan company taught the Bank of France

FOURTEEN YEARS AGO a young University of British Columbia commerce graduate named Peter Paul Saunders borrowed $500 from each of three friends and established a finance company. He grandly called it the Imperial Investment C orporation. Today, the company -— it changed its name in 1961 to Laurentide Financial Corporation — has assets of more than $250 million, operates out of two hundred offices and ranks as the third largest finance company in Canada and among the top fifteen in North America.

The significance of this spectacular growth is that Saunders, who's come close to saturating the Canadian market with his brand of financing services, is now concentrating on other countries, and successfully exporting Canadian business methods. Laurentide first stepped gingerly outside Canada in 1960 when, along with local interests, it founded a loan company in Nassau. The following year, Saunders moved into the U. S. He bought out the Mercantile Acceptance Corporation of San Francisco for $9 million. It then had seventy-two branches in California and outstanding loans of $35 million. In two years Saunders had expanded his American offshoot (now called Laurentide Finance Corporation of California) to 105 branches and tripled its loan business. He’s also moved into Oregon and Nevada.

Laurentide has also begun to move into the Common Market. “We studied the situation in all the EEC countries and decided to begin in France," says Saunders. “It had lots of unfilled domestic consumption, a growing mid-

die class with rising earning power and the lowest per capita use of credit in western Europe." The Bank of France, which had to ratify his entry, became so intrigued with the scope of Saunders’ business that it asked some of his experts to lecture its own officials on the expanding uses of credit. Saunders moved into Paris by acquiring a sixty-seven percent interest in the five-branch Société Française de Financement de Ventes à Crédit which he plans to expand across France. Recently he also bought a British loan operation (Turner Investments Ltd.), and he has set up a holding company in Zurich.

Although Laurentide doesn’t really do anything that other finance companies don't do. Saunders says his company does it better because it’s more flexible in its loan policies. It was the first loan company, for instance, to lend money to petroleum companies in western Canada on oil still in the ground. In its consumer loan business it initiated a plan for picking up the payments of customers who lost their jobs temporarily. The company’s emphasis is increasingly on industrial leasing and business loans. Laurentide’s own stock went on the market in 1954 and Power Corporation of Canada, a Montreal holding company, bought enough shares to gain effective control.

Saunders, who originally came from Hungary, spent the first three years after his graduation from UBC as an accountant for the CPR. Now, seated in his luxurious headquarters in Vancouver, he likes to compare the two industries. “What made the railways great,” he says, “was their ability to bridge the geographical gap and bring markets and producers together. The financing industry is bridging the economic gap by helping to bring together the producers of goods and their consumers."

PETER C. NEWMAN