Time to spinoff the BDC?

1 response

  1. top says:

    Great topic and well researched! If you’re going to float BDC… you may as well merge with EDC (CAD 20 billion in total assets, 2006 net income of CAD 1.22 billion and 2006 dividend of CAD 350 million to its shareholder), synergize the business, float the combined entity, acquire or merge with one of the smaller Canadian chartered banks (to bring down your cost of capital), and make a legitimate globally competitive private sector financial institution. With ABMs in emerging markets that charge 5 bucks a pop!

    But… how much of that would be owned by Canadians? How many high risk finance and insurance sectors (venture capital, small business export insurance, etc…) would the “bank” remain in after a few quarters of P&L that was hampering the “bank” from maintaining comparable ROE and ROA as the other Banks? I think there is still a place for the development banks and ECAs (export credit agency) in fulfilling a public policy mandate… the question is… could that need be better served by the private sector? (private meaning a non-government owned private or public company/enterprise). Sounds like a good term project for some MBA students!

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