Scotiabank may have started a trend.
In the second transaction of its kind in a week, the bank has teamed up with Bank of Xi’an, a Chinese financial institution, to help ease the financial transition of Canada-bound immigrants.
The partnership comes days after the bank’s decision to join with India’s Kotak Mahindra Bank for the same reason.
Scotiabank’s deal with a domestic Chinese bank, a Canadian bank first, is of particular significance considering our banks do very little advisory work in the country.
This deal may open doors for similar transactions by other large banks that enjoy strong international images given their superior performance during the global financial crisis.
Under the agreement with the Bank of Xi’an, Chinese immigrants, international students and foreign workers will be able to open an account with Scotiabank through participating Bank of Xi’an locations. Once in Canada, they can visit their local Scotiabank branch to activate their accounts and apply for a credit card.
Immigration plays a key role in the growth of the wealthy in Canada. An increasing number of affluent immigrants are choosing to make Canada home for both their families and their wealth. And banks are competing fiercely for this portion of the market.
Scotiabank, which claims to have the largest presence in mainland China among all Canadian banks, is not alone. Royal Bank of Canada has representative offices in China and India, and CIBC, TD and BMO all have various business interests in China.
The flow of business has not been unidirectional. To capitalize on the presence of large diasporic populations in Canada, many foreign banks have set up operations here to provide seamless service to their new and existing customers both in Canada and their home countries.
The Agricultural Bank of China, China’s fourth largest bank, made its Canadian debut earlier this year. Two other Chinese banks are already here: the Bank of China and the Industrial and Commercial Bank of China.
Among other foreign banks to follow their customers to Canada is ICICI Bank, which in 2003 became the second Indian bank to operate in Canada. The State Bank of India has been “rendering yeoman service” since 1982.
But it’s not all peaches and cream for immigrants with financial interests in both Canada and their home countries. Some Iranian-Canadians, for instance, were recently snubbed by TD Bank Group when it shut their accounts as a result of Canada’s economic sanctions against Iran.
Things are not likely to get any smoother for these customers with Canada’s decision to shut its embassy in Iran and expel all Iranian diplomats in Ottawa.