Click here to join our mailing list to receive the latest news and updates as they happen. Unsubscribe any time.

Xceed Bank

Xceed Xceed Mortgage plans to become one of Canada’s newest banks.  The company believes that doing so will lower its mortgage funding costs and help it get back into non-prime lending. 

(Xceed used to be a big subprime lender before the ABCP crisis hit in August 2007.)

Chairman/CEO, Ivan Wahl, said this in a statement today: 

  • “Xceed determined that it is advantageous for us to become a Schedule 1 bank as it will provide us with access to retail deposits as an additional source for obtaining funds that we can use for our mortgage originations activities."
  • "Retail deposits are a stable, cost-effective means to warehouse insured residential mortgages prior to our pooling them for sale to the Canada Mortgage Bond program. Retail deposits also are a reliable and permanent way to fund conventional residential mortgages to be held on Xceed’s balance sheet until maturity.”
  • “Continuation as a bank also will assist Xceed in gaining approval from the Canada Housing and Mortgage Corporation to pool and sell mortgages directly to the Canada Mortgage Bond program without the need for us to rely on an intermediary and pay the costs associated with that.”
  • "As a bank, Xceed will be able to resume selling financial products to the niche market that is not well-served by traditional lenders and we will be able to compete on a level playing field with existing small banks and trust companies."

On September 10, 2009, Xceed shareholders will be asked to approve the company’s conversion to a bank.

Xceed’s stock reacted favourably to the news, closing today at a 52-week high of $1.75 per share.

A few other lenders in the industry are also considering converting to banks…for similar reasons.

______________________________________________________

Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of insured residential mortgages that it originates in Canada. The company has approximately $2.0 billion of mortgages and other assets under administration. Xceed’s shares are traded on the Toronto Stock Exchange (TSX: XMC).