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M3 Group and nesto deal

Latest in mortgage news: nesto gains access to broker channel in exclusive deal with M3 Group

Digital mortgage lender nesto this week announced an agreement with M3 Group that will allow it to start distributing mortgages through the broker channel.

The “exclusive brokerage services relationship” will give nesto access to M3 Group’s network of over 8,500 brokers across various brands, including Multi-Prêts, Mortgage Alliance, Mortgage Intelligence, Invis Mortgage Solutions, and Verico.

Specific timing hasn’t been confirmed, but nesto said it would start providing mortgages to M3 Group brokers starting this year.

“To further deliver our mission at scale, we want to distribute nesto mortgages via the channels that are most attractive to Canadians,” Malik Yacoubi, Co-founder and CEO of nesto, said in a statement.

He added that the partnership with M3 is a “perfect match” given the companies’ shared values of “exceptional customer experience through fast and efficient service, digital transformation, and a strong ambition for growth.”

Since its launch in 2018, Montreal-based nesto has grown to over 300 employees and has become a notable presence in the digital mortgage space.

Most recently, nesto announced an agreement to take over the servicing and administration of Canada Life’s mortgage portfolio starting in January. Canada Life announced its exit from the residential mortgage market in 2022.

Housing starts fell 7% in 2023: CMHC

Fewer new homes started construction in 2023 compared to 2022, according to figures from the Canada Mortgage and Housing Corporation (CMHC).

For the full year, construction began on a total of 223,513 units, a 7% drop from the 240,590 units started in 2022. Leading the decline were starts for single-detached homes, which saw a 25% year-over-year decline.

Depsite the slowdown, CMHC said the pace was still better than expected given the current economic backdrop over the course of the year.

“Following record and near-record highs in 2021 and 2022, housing starts dipped in 2023, but still significantly outperformed expectations for the year,” said Bob Dugan, CMHC’s chief economist.

“The decline was driven mainly by a sharp drop-off in single-detached starts and tighter economic conditions affecting multi-unit starts in the year’s final quarter,” he added. “…we expect to see continued downward pressure in the coming months.”

Inflation and cost of living seen as 2024’s biggest financial challenges

Despite inflation growth having slowed from its 2022 high of 8.10%, Canadians still see it as one of their biggest financial hurdles for this year, according to a survey commissioned by TD.

The survey found that the majority of established Canadians (58%) as well as 38% of new Canadians expect inflation and the cost of living to pose the largest financial challenges of the year.

The survey also found that 36% of Canadians feel less positive about the financial outlook in 2024 compared to 2023, with just 19% feeling more positive about this year.

New Canadians, on the other hand, were decidedly more optimistic about their financial future this year compared to last (67%), with only 15% feeling less optimistic.

“With another uncertain economic year projected, it isn’t surprising that many Canadians aren’t feeling optimistic about their finances as we head into 2024,” said Emily Ross, VP, Everyday Advice Journey at TD said.

RBC expects to close HSBC deal by March

RBC CEO Dave McKay said he expects RBC’s acquisition of HSBC Canada to officially close by March.

The $13.5-billion deal cleared its final hurdle in December after receiving approval from Chrystia Freeland, Deputy Prime Minister and Minister of Finance.

“We’re very happy to see this phase and get the approval on HSBC, because it’s good for Canada, it’s good for HSBC employees, it’s good for clients and we get to move this transaction forward at speed now,” McKay said.

He added that he expects to realize $740 million worth of cost savings, or roughly 55% of HSBC Canada’s overall cost base.

McKay also addressed some of the concessions RBC made in order to get the federal government’s approval of the deal, including the opening of a Global Banking Hub in Vancouver resulting in 440 net-new positions.

“The vast majority of that we had already contemplated [and] is important in the transition of this organization to RBC,” he said. He added that the creation of the Global Banking Hub in Vancouver is “really important to us because we’re looking at consolidating work from the U.S. into Canada to save on costs, particularly from California, where it’s very expensive to hire bank employees.”