The Globe and Mail reports in its Tuesday edition that the outlook for some of Canada's
independent investment
banks is bleak. The Globe's Tim Kiladze writes in the Streetwise column that the Big Six banks
are building ever stronger relationships
with clients that once
gave the independents a lot
more work than they currently
do. Corporate
loans are not that attractive to the
banks, rather they serve as a foot in the door.
Once the agreements are signed,
investment bankers at the Big
Six lenders work to parlay
the relationships into something
much more profitable, like underwriting
a share offering. Since January, Canada
has seen some of its largest energy
bought deals since the financial
crisis, and yet the
independents' share of their proceeds
remains small.
Critics of the Big Six banks should
petition the Competition Bureau
to intervene.
Back in the boom times,
independents were happy when
banks focused on lending to established
companies because
that allowed them to service junior
resource clients that the Big
Six had never even heard of. Rather
than hope for governmental intervention, The Globe says independents
are better off rethinking
their business strategies.
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