Skip to main content
streetwise newsletter

Here are the top reads,

Hydro One: As Ontario’s political leaders hammer Hydro One Ltd. over its executive pay, election campaign threats are weighing on the business, prompting the company’s chief executive officer to spell out the consequences of this newfound interference. Hydro One has dominated headlines ahead of Ontario’s provincial election on June 7 after Progressive Conservative Leader Doug Ford threatened to fire the utility’s CEO Mayo Schmidt and replace the board of directors because of executive pay levels. Mr. Schmidt was given a $1.7-million raise last year, bringing his total compensation to $6.2-million. Meanwhile, the NDP has pledged to repurchase Hydro One following its 2015 privatization. In an interview Wednesday, Mr. Schmidt warned that such political meddling could set Hydro One back at a critical juncture in the North American power industry. Story (Tim Kiladze, for subscribers)

Home Capital: Alternative mortgage lender Home Capital Group Inc. has secured a smaller, less expensive credit line from two Canadian banks to backstop any unexpected funding needs. Starting in July, the two-year, $500-million credit facility will replace an existing $2-billion line of credit from Berkshire Hathaway Inc. – the firm run by billionaire investor Warren Buffett, which is Home Capital’s largest shareholder. Story (James Bradshaw)

Earnings: Lending firm Callidus Capital Corp. continues to lose money and take over troubled businesses that have defaulted on loans, posting a $7-million loss in the first quarter and acquiring control of a paving company. The loss, announced late Tuesday, was double the firm’s $3.5-million loss in the same quarter a year ago. The Toronto-based firm, run by financier Newton Glassman, booked loan losses of $15-million, down $4.4-million from last year’s first quarter, and took over a Minnesota company called Midwest Asphalt Corp. Story (Andrew Willis and Jeffrey Jones, for subscribers)

FINANCIAL SERVICES WRAP

Mortgage rates: HSBC Canada cut its five-year variable mortgage rate to 2.39 per cent as banks compete for customers amid a slump in home sales. The move undercuts rivals Bank of Montreal and Toronto-Dominion Bank. Story (Bloomberg)

Australian banks: A Royal Commission into Australia’s A$100 billion financial services sector that has proven a reputational nightmare for banks and money managers. Australia was one of the few large economies to avoid recession after the 2008 global financial crisis and its banks were spared the kind of regulatory intervention that followed in countries such as the United States and Britain. Story (Reuters)

DEAL WRAP

Bank merger: Saudi British Bank (SABB) 1060.SE and Alawwal Bank 1040.SE have agreed a merger to create Saudi Arabia’s third-biggest lender, in a $5 billion deal that marks the first major banking tie-up in the kingdom in two decades. Story (Reuters)

Toy mergers: The U.S. toy industry looks set for a flurry of mergers and acquisitions between smaller toy makers in the aftermath of the Toys ‘R’ Us bankruptcy, as they seek more scope and negotiating power with big box retailers Target and Walmart. Story (Reuters)

WHAT WE’RE READING ELSEWHERE

Goldman cryptocurrency: Circle, a Goldman Sachs-backed fintech, announced a new cryptocurrency pegged to the U.S. dollar and a US$110 million investment round led by profitable crypto-mining company Bitmain, bringing Circle’s value near US$3 billion. Story (CNBC)

Credit cards: Rising loan losses and higher rewards expenses weigh on credit-card issuers. Story (WSJ, subscription required)

Regulation: Green bonds are all the rage, so should the rating agencies that judge issuers’ environmental credentials be subject to more regulation? Story (FT, subscription required)

IN CASE YOU MISSED IT

Disruption: Most businesses fail to respond to the challenge of disruptive technology. But disruptive technologies, including mobile devices, cloud computing, artificial intelligence, blockchain and social networking, are transforming financial services. So it is perhaps not surprising that, far from embracing creative destruction, the protected oligopoly of Canadian banks and their counterparts in many other parts of the world have chosen to lobby in favour of the status quo. Story (Patricia Meredith and James L. Darroch)

Regulation: The chair of Ontario’s securities watchdog is raising red flags about growth in the alternative mortgage lending space. Speaking at a Toronto Centre event about financial stability on Monday, Maureen Jensen said recent efforts to remove risk from the banking system have caused activity to move into other, less heavily regulated areas such as syndicated mortgage lending as well as mortgage investment corporations (MICs), which are unregulated. Story (Alexandra Posadzki and James Bradshaw, for subscribers)

The Streetwise newsletter is Tuesday to Saturday. If you’re reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Streetwise and all Globe newsletters on our signup page.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:15pm EDT.

SymbolName% changeLast
GS-N
Goldman Sachs Group
+0.59%417.69
BMO-T
Bank of Montreal
+1.13%132.25
BMO-N
Bank of Montreal
+1.35%97.68

Interact with The Globe