Bank`s unusal mortgage partner: real estate agents
National Bank’s unusual mortgage partner: real estate agents
Competition is heating up in the mortgage business as a result of tightened government policy, and one of Canada’s major banks is turning to an unusual source to generate business: real estate agents.
Louis Vachon, the chief executive of National Bank of Canada, told
analysts Thursday that relationships with real estate agents are
boosting his market share outside the bank’s home province of Quebec,
and he is keen to develop them further.
“I’m trying to still do more business with real estate agents because it’s less costly. So I’d rather get my origination from the cheapest source for mortgages,” Mr. Vachon told analysts on a conference call to discuss the bank’s latest financial results. “That’s why we’ve been expanding the number of people doing business with real estate agents outside Quebec…. It’s still, I would say, my best objective. The cheapest source of acquisition is always the best for me.”
He did not provide details on compensation arrangements, if any, between the bank and real estate agents.
But Mr. Vachon told analysts that using real estate agents and mortgage brokers to bring in lending business does not cost the bank the cross-selling opportunities that drive many traditional mortgage loan transactions.“We have put in place… a specific program with our people to make sure that if they come from a broker [or agent] that we welcome the customer and try to convert him [into a] full-fledged” banking customer for “his operational account and insurance and all types of products,” Mr. Vachon said
May 26, 2011
Posted in: FP Street,