) has emerged as the winning bidder for failed technology financier Silicon Valley Bank’s Canadian branch in an effort by the country’s sixth largest lender to expand its national presence in the competitive market for banking technology startups.
SVB Canada’s loan book will be rolled into the bank’s technology and innovation banking group – which is part of the commercial banking unit – with the bulk of its startup borrowers based in southern Ontario, British Columbia and Alberta, according to Michael Denham, head of commercial and private banking at National Bank. Grabbing more market share outside of Quebec has been a key part of the bank’s growth strategy as its rivals seek to grow by striking major deals in the U.S.
The purchase by National does not include a US$60-million debt facility for e-commerce merchant financier Clearco,., after rival bidders attributed a low value to the challenged company’s debt. Clearco investor Inovia Capital and two other investors bought that piece of the SVB business in July as part of a refinancing effort that the Montreal venture capital firm is spearheading to get Toronto-based Clearco onto surer footing.
Meanwhile, bank profits are being squeezed as high interest rates boost the cost of borrowing, dampening demand for loans. Some ofin the coming years as other businesses slow, including residential lending.
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