People walk by an ING Direct cafe in Toronto following the announcement that ING Bank of Canada will be acquired by Scotiabank on Aug. 29, 2012.MWS/The Canadian Press
Bank of Nova Scotia appears to be hanging onto the deposits it got when it bought ING Direct, driving home that the bank would not risk messing up ING's customer relationships because the funding is so crucial.
Recall that when rival Royal Bank of Canada bought Ally Financial's Canadian operations, it soon ended the sweet deals that Ally was offering to bring in deposits. RBC wanted Ally for the other side of the balance sheet and the loans it was making.
That decision by RBC raised concerns that Scotia would do the same with ING. At the time, Streetwise argued that was unlikely, because Scotia was in need of stable deposit funding and ING's business provided a huge boost that Scotia would not dare mess with.
Indeed, since then, Scotia has hewed to its pledge to run ING more or less as it always had been run. And Scotia's disclosure Wednesday suggests that is working, as customers are not defecting and deposits steadily increasing.
Average deposits grew $2-billion from April 30 to July 31, Scotiabank said.
Scotiabank received about $37-billion of deposits in the ING Direct purchase.
(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)
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