Here are the top reads on deals and financial services over the last week. Have a great weekend,
Trans Mountain reaction: For Prime Minister Justin Trudeau and his government, the best-case scenario for the Trans Mountain pipeline always ran along these lines: Defeat the B.C. government’s legal challenges, use a charm offensive to win social licence for the project, get shovels in the ground and move quickly to find a corporate buyer for the whole works. The worst-case scenario for the federal Liberals was what happened on Thursday. After a Federal Court of Appeal decision effectively shut down expansion of the 1,150-kilometre pipeline, the government finds itself in the awkward position of paying Kinder Morgan Canada Ltd. $4.5-billion for a piece of infrastructure that’s worth a fraction of that price. You can almost hear the sighs of relief from the chief executives of utilities and pension plans across the country, who were all offered a chance to buy into Trans Mountain over the past few years, and who all said no to Kinder Morgan. Opinion (Andrew Willis, for subscribers)
Bank earnings wrap: Toronto-Dominion Bank reported a 12-per-cent bump in third-quarter profit to cap off another smooth earnings season for Canada’s big banks, as higher international profits and wider lending margins more than offset any drag from a slower mortgage market. Story (James Bradshaw, for subscribers)
FinTech: Britain’s Wonga Group Ltd. was once hailed as a technological marvel, set to revolutionize online finance and payday lending across Britain and around the world. But the company also became a symbol for the worst aspects of payday loans, and on Thursday it collapsed into bankruptcy protection, brought down by a flurry of angry customers and aggressive regulators. Story (Paul Waldie, for subscribers)
Capital markets: Buoyant stock markets, rising interest rates and robust economic growth are helping Canada’s major investment banks turn the corner, after four straight quarters in which they posted year-over-year declines in profit. Story (Alexandra Posadszki, for subscribers)
Bank earnings: National Bank of Canada say its third-quarter profit gained 10 per cent compared with a year ago, helped by growth across its business. The lender says it earned $569-million for the quarter ended July 31, up from a profit of $518-million in the same quarter last year. Story (James Bradshaw)
Financial products: A small but encouraging rate war is being fought over five-year GICs. EQ Bank is offering 3.52 per cent on a guaranteed investment certificate with a five-year term, just surpassing the 3.5 per cent offered by Oaken Financial. Several other small independent banks are offering rates in the 3.1-per-cent to 3.3-per-cent range, while the big online bank Tangerine offers 3 per cent. Expect more battling over the months ahead on rates for both GICs and savings accounts. Opinion (Rob Carrick)
Aston Martin IPO: Aston Martin’s sports cars are generally considered the preserve of the super-rich given that they start at about $200,000 and are best known for zooming James Bond around. But investors will soon get a chance to own a piece of the glamour after the iconic British auto company announced plans on Wednesday to go public on the London Stock Exchange. Story (Paul Waldie, for subscribers)
Pot sector: Some global beverage makers are taking a close look at Canada’s legal marijuana industry as they weigh the possibility of getting into the business. Officials from Anheuser-Busch InBev SA/NV, Pernod Ricard SA, Heineken Holding NV, Coca-Cola Co. and Diageo PLC are among companies that have been making the rounds with legal cannabis producers, meeting executives and touring their facilities, according to sources familiar with the matter. Story (Christina Pellegrini and Marina Strauss)
The spectacular rise and tragic fall of George Gosbee: When his best friend needed help, George Gosbee didn’t hesitate. He had convinced Marshall Abbott to join him on a skiing expedition to the South Pole, and now Abbott was on the brink of collapse. He was dehydrated and his heart was racing. It was all he could do to stay upright at 3,000 metres above sea level, let alone haul a sled packed with supplies. ROB Magazine (Kelly Cryderman and Jeffrey Jones, for subscribers)
Scotiabank earnings and commentary: Scotiabank’s CEO believes this week’s breakthrough in trade talks between the United States and Mexico is positive for the bank as it relieves some of the lingering uncertainty about the fate of the North American Free Trade Agreement. “We look forward to the next piece of NAFTA being solved, hopefully in a number of weeks, with Canada’s inclusion,” chief executive Brian Porter said Tuesday on a conference call with reporters after the bank’s third-quarter results were released. Story (James Bradshaw, for subscribers)
BMO earnings: Bank of Montreal outshone rival Bank of Nova Scotia on Tuesday, posting third-quarter earnings that came in ahead of market expectations, helped by growth in the United States. Shares in Scotiabank, down 5 per cent since the start of the year, were 1.8-per-cent lower at 1 p.m. EDT. Shares in BMO, up 5 per cent so far this year, were down 0.25 per cent, with the broader market for Canadian banks 0.5-per-cent lower. Story
Venture Capital: Canadian venture-capital financing is off to a strong start in 2018, buoyed by strength at all stages of the funding cycle, as VC veterans point to continued signs of maturation in the domestic market. Over the first half of the year, Canada saw five “megadeals” in excess of $50-million, the most since at least 2013. Story (Josh O’Kane, for subscribers)
Wealth management: Can you imagine a world in which mutual-fund managers pay investors an annual fee – rather than the other way around? That may not be as far-fetched as it sounds. Opinion (Lisa Kramer, for subscribers)
Cryptocurrency trading: Glancing around Coinsquare’s new loft-style Toronto office, one would never guess that the cryptocurrency market has been in a lull for much of the past six months. But with investor appetite for cryptocurrencies waning and cryptocurrency trading revenues expected to erode, the startup’s success will depend on its ability to branch out into new business lines and to navigate the rapidly evolving regulatory landscape facing the nascent sector. Story (Alexandra Posadzki, for subscribers)
Wealth management: Peter Anderson has a problem most of us would envy: The CEO of CI Financial Corp. has too much cash. Mr. Anderson runs a mutual fund company that kicks off roughly $650-million a year, far more money than CI needs to build its business. While having too much cash would seem to rank right up there with being too healthy or too good-looking when it comes to life’s challenges, CI’s boss faces a challenge that’s going to define his tenure at the helm and the performance of CI shares. Story (Andrew Willis, for subscribers)
From the industry: It’s time to rethink practice and regulation: Opinion (Ian Russell, president and CEO, Investment Industry Association of Canada, and Michael Williams, chief risk officer and CCO, Richardson GMP Limited)
Oil deal: A Chinese-backed investor group that has plowed hundreds of millions of dollars into insolvent oil and gas producers is making its first foray into Canada’s oil sands. East River Oil and Gas Ltd. is snapping up bankrupt Connacher Oil and Gas Ltd. in a proposed transaction worth $113.5-million, bringing the junior oil-sands producer closer to the end of a court-supervised restructuring process that has dragged on for more than two years. Story (Jeff Lewis, for subscribers)
MORE FINANCIAL SERVICES AND DEALS NEWS FROM FRIDAY
Oil sector: Canadian Natural Resources Ltd. has signed a deal to buy the Joslyn oilsands project for $225 million from Total SA and its partners. Paris-based Total, which is Joslyn’s operator, currently owns 38.25 per cent of the project, which is directly south of Canadian Natural’s Horizon oilsands operation. Story
Beverages sector: The £3.9-billion (US$5.1-billion) sale of the Costa Inc. coffee chain to the Coca-Cola Company began brewing when Whitbread Group PLC’s boss Alison Brittain crossed paths with the chief executive of the soft-drinks giant at a conference. Story
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