KIMBERLEY NOBLE December 7 1998


KIMBERLEY NOBLE December 7 1998


Peter Rossall has lost count of how many lattes he has made this afternoon. Turns out, Rossall, a training specialist with ING Direct, a banking newcomer to Canada, had dropped by his bank’s storefront café in suburban Toronto for a few minutes at the end of his lunch break—two hours ago. “I came for a latte,” he laughs. “Instead I’ve been making them for customers. I think I’ve sold more than I’ve given away. But hey, I’ve opened a couple thousand dollars worth of bank accounts at the same time.”

Even casual observers of the bank merger debate will have heard all about giant ING Groep NV of Holland, and how— along with credit card issuer MBNA Corp., and California banking powerhouse Wells Fargo & Co.—it is using international clout and high-tech computer wizardry to swoop in and scoop up the most profitable customers from beneath the noses of the big Canadian banks. If we are to be vulnerable to these foreign competitors, these banks say, we need to grow bigger and stronger so we can compete.

The problem with that argument, say keen observers of the banking scene, is that when it comes to retail banking, Canada’s chartered banks are already the big, strong ones. For decades, through allies in Ottawa, they have successfully kept all but a handful of competitors at bay. The biggest of these, Vancouver-based Hongkong Bank of Canada, has been in Canada for 20 years and ranks as the seventh-largest bank in the country (just after National Bank of Canada). Large foreign-owned investment banking firms have operated here, unfettered, for decades; all others get swamped in red tape. Those that are currently making inroads appear to be doing so more through hard slogging and customer service than by riding the coattails of deep-pocketed owners in far-off lands.

Up close and personal, this new breed of foreign banker makes latte and pitches in to man the phone lines when the call centres get jammed. Take Rossall, or his boss, ING Direct president Arkadi Kuhlmann, both of whom grew up in Toronto. ING—a “virtual” operation with no conventional branches that pays above-average interest rates on savings and offers lines of credit for a flat 7.8 per cent—opened the café in the first place not because foreign owners do so, but because Canadian customers were driving long distances to visit its headquarters on the northern edge of Toronto. They wanted to see their bank. Kuhlmann, a former Royal Bank executive, started bringing visitors up to ING Direct’s executive offices for coffee. He decided that if customers wanted to come, they should be given someplace pleasant to sit, where they could buy ING products as well. The café has worked out so well that the bank recently opened another in downtown Vancouver.


The largest foreign banks in Canada, by assets

Assets Branches


Hongkong Bank of Canada


(United States)


(Germany) (Netherlands)


(France) (United States)

Deutsche Bank Canada

ABN AMRO Bank Canada

Société Générale Canada

Bank of America Canada


Citibank Canada







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Both MBNA and ING Direct employ approximately 200 Canadians in pleasant, well-paying jobs with room for career advancement. Contrary to the way they are portrayed by their Canadian competitors, both seem less preoccupied with computer wizardry than with providing the quality service customers want—a concept that seems all but forgotten in the bank merger debate.


While money-losing ING Direct is something of an experiment for its Dutch parent, U.S.-owned MBNA Canada is a different matter altogether. MBNA is what is known as a “monoline” banker: it has only one product, credit cards. Every MBNA division worldwide operates along strict lines set out by its founder, Charles Cawley, a credit card manager at Maryland National Bank who, with partners, bought the Gold MasterCard division from his employers in the early 1980s and has built it into the biggest company of its kind in the world. MBNA’s Canadian operation, located outside Ottawa, feels very American: the