US Internet pure play bank, NetBank, has announced a partnership between NB Partners, its wholly-owned subsidiary, and Toronto-based Dundee Bancorp to expand its product offerings throughout Canada.
The partnership will give Dundee Bancorp the exclusive right to sell banking products and services using limited NetBank trademarks in Canada through a trust company subsidiary. NB Partners receives an annual licensing fee and minority ownership in the new Dundee Bancorp subsidiary. Financial terms of the agreement have not been disclosed.
D R Grimes, NetBank chief executive officer, says: "By partnering with a foreign financial services provider, like Dundee Bancorp, we can enter another country more easily and benefit from the partner's experience and knowledge of the local marketplace. In turn, we are able to help the partner replicate our operational efficiency and introduce an online banking experience that really has no rival abroad."
Dundee Bancorp must first await regulatory approval of its application to incorporate its new subsidiary as a trust company, but the firm hopes to launch its NetBank affiliate operation later in the year.
NetBank will provide ongoing marketing and technology advisory support, primarily in the start-up phase and first year. Dundee Bancorp plans to use NCR to host its banking operation and provide back-office processing and support. Additionally, Dundee Bancorp plans to market its NetBank-affiliated banking products and services to new and existing clients of Dundee Wealth Management.
NetBank formed NB Partners this year to pursue strategic partnerships with foreign financial services companies. This subsidiary licenses limited rights to NetBank trademarks and intellectual property to a single provider within a country and pays royalties to NetBank on each partnership.