BANK MERGERS CANCELLED
By Adnews Staff
It looks like the ad agencies of four of Canada's banks won't have to worry about any agency shake ups as a result of the bank mergers. Finance Minister Paul Martin told the banks this week that they cannot merge until the federal government overhauls its financial services regulations, which could take until late 1999. Martin said he will consider the mergers at that time. Until Martin's ruling, the Canadian Imperial Bank of Commerce was set to merge with the Toronto Dominion Bank and the Bank of Montreal was joining up with the Royal Bank of Canada. Advertising for the CIBC is handled by Padulo Integrated of Toronto. TBWA Chiat/Day of Toronto is TD's agency, while Vickers & Benson Advertising of Toronto has the Bank of Montreal account The Royal Bank handles its ad campaigns through MacLaren McCann of Toronto.
As a result of Martin's ruling, the CIBC and Toronto Dominion have decided to drop their merger plans. "We are disappointed the government has reached this decision," CIBC chairman and CEO Al Flood says in a release. "We believed this merger was vitally important to enable the Canadian financial services industry to remain competitive in an increasingly complex world of globalization, consolidation and competition." CIBC feels there were no substantial issues raised by the Competition Bureau, which reviewed the mergers, that couldn't have been dealt with.
Many of the bureau's concerns were related to the retail branch network in Canada, TD chairman and CEO Charles Baillie says in a release. TD believes these concerns could have been addressed without materially impinging on the commercial viability of the merger.
According to the Bank of Montreal and the Royal Bank, the two received a letter from the Competition Bureau outlining its views on the competitive impact of their proposed merger. They said the bureau had concerns in a number of product and geographic markets in relation to branch banking services to individuals and businesses, credit cards and securities.