Toronto-Dominion Bank still sees foreign students as an important source of growth even as Prime Minister Justin Trudeau’s government has ushered in new caps on study permits in a bid to ease rental-housing demand.
Canada’s federal government said in January it will cap the number of international student permits at about 360,000 this year, down 35 per cent from 2023, a limit set to stay in place for two years.
The change could crimp momentum in personal-banking account growth for Canadian lenders, several of which saw a surge in new customers in fiscal 2023. Toronto-Dominion said in its annual report it added the most new customers since 2017, while rival Canadian Imperial Bank of Commerce said it attracted 650,000 new clients last year, with both banks pointing to immigration as a factor.
“Newcomers to Canada, including international students, are a material and critical segment for all of the banks,” Sona Mehta, executive vice president of Toronto-Dominion’s Canadian personal-banking division, said in an interview. While there will be “ebbs and flows” owing to the government policy, the bank will keep investing to win business in the area, she said.
To that end, it’s still striking partnerships to help woo foreign students, including a referral agreement with India’s HDFC Bank, announced last month. And in a new pact announced Wednesday, Toronto-Dominion will work with online study-abroad platform ApplyBoard to help win potential customers from countries including China, India, Pakistan, Vietnam and the Philippines.
To be approved for a Canadian study permit, international students need to show they have at least $20,635 in a guaranteed investment certificate account — similar to a certificate of deposit in the U.S. — which serves as proof of financial support to maintain travel, living and study expenses. The partnership with ApplyBoard, a startup based in Kitchener, Ontario, will use secure technology to help students prove they meet those requirements and help funnel potential clients into Toronto-Dominion accounts before they arrive in Canada.
“We continue to see strong growth for the bank” in the business of serving foreign students, Mehta said.
Toronto-Dominion’s competitors are also targeting the market for newcomers and students, with Royal Bank of Canada striking a cooperation pact with India’s ICICI Bank Ltd. in 2022. And CIBC has deals with the discount program Student Price Card Ltd. and an exclusive banking deal with Toronto’s Pearson International Airport, the country’s biggest international arrivals hub.
“It’s a tremendous growth channel,” Jeff Smith, senior vice president of client segmentation at CIBC, said in an interview last fall. Newcomers and students accounted for more than a third of the bank’s new customers last year, he said, adding that they “represent a real opportunity for us to deliver advice as well as start long-term relationships with new clients that ultimately have a high propensity to turn into affluent clients.”
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