The combined banking entity will focus on near-prime consumers
A new near-prime-focused consumer banking entity with over 1.5 million customers and $5 billion in assets on a consolidated basis has been formed by Duo Bank of Canada’s acquisition of Fairstone Financial, a transaction that has been formally approved by the Office of the Superintendent of Financial Institutions.
The deal was supported by Centerbridge Partners L.P., the Ontario Teachers’ Pension Plan Board, and financial services entrepreneur Stephen Smith, Duo Bank said. The acquisition included Fairstone Financial Holdings and its wholly owned operating subsidiary, Fairstone Financial, collectively known as “Fairstone.”
The combine group offers an extensive online presence, a diverse portfolio of credit, and related insurance and rewards products.
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Fairstone president and CEO Scott Wood will serve as president and CEO of the combined entity, while Duo Bank CEO Trudy Fahie has decided to retire from the institution and will remain as vice chair of the combined entity’s board of directors. The rest of the new organization’s top-level team will be comprised of executives from both organizations.
“Combining Fairstone’s 100-year market presence and its market-leading near-prime consumer lending capabilities with a Schedule I Bank with a significant credit card business will allow us to provide everyday Canadians with even better access to financial solutions that fit their needs,” Wood said. “As we bring the strengths and values of both organizations together, we plan to design and execute a value creation plan focusing on the significant growth opportunities ahead.”
“Both businesses, Duo Bank and Fairstone, are highly complementary and well-aligned in terms of strategic growth objectives with a mission to provide everyday Canadians with access to financial solutions that fit their needs,” said Stephen Smith, chair of the board of the Duo Bank/Fairstone Group. “It is our belief that this acquisition adds diversity to the Canadian financial services landscape and further strengthens the growth and market opportunities for both companies.”
