Bank of Nova Scotia, which bought ING Groep NV’s Canadian online bank last year, is renaming the business Tangerine in a move that sheds the last vestiges of its former owner.
“Tangerine really captures the essence of what we wanted to do,” Peter Aceto, chief executive officer of Scotiabank’s ING Direct unit, said today in a telephone interview from Toronto. “We wanted to maintain what we’ve built for the last 16 years and why customers chose us in the first place, which is around being innovative and simplifying things.”
The rebranding, which includes the word Tangerine in orange punctuated by an arrowhead, will be rolled out in four to five months, Aceto said. Scotiabank, the country’s third-largest lender by assets, spent C$3.1 billion ($3 billion) in November 2012 to buy the Amsterdam-based company’s Canadian operations, gaining an online banking platform with C$30 billion of deposits and 1.8 million customers.
ING Groep opened ING Direct in Canada in 1997, the first of many branchless banking ventures in countries including the U.S. and Australia. The company gained prominence with its orange lion logo and television commercials featuring Dutch actor Frederik de Groot, who urged Canadians to “Save your money” in a series of ads.
“People are there because they want the highest interest rate on the street,” said Barry Schwartz, who helps manage about C$540 million including Scotiabank shares for Baskin Financial Services Inc. in Toronto. “As long as they keep that I don’t think people care if it’s ING or Joe Blow’s Bank Company.”
ING Direct pays 1.35 percent on its investment savings account with no minimum balance, according to its website, while Scotiabank’s Money Master Savings account pays 0.2 percent for balances of more than C$5,000 and 0.1 percent for accounts with less than that amount.
ING Groep, the biggest Dutch financial-services firm, was required to sell some foreign units and other businesses as the lender sought to repay government aid received during the financial crisis. In February 2012, ING sold its U.S. online bank to McLean, Virginia-based Capital One Financial Corp., which renamed the business Capital One 360.
Scotiabank’s ING Direct, which offers mortgages and mutual funds in addition to high-interest savings accounts, falls within the lender’s Canadian banking division. Canadian banking is Scotiabank’s most profitable unit, with a 36 percent return on equity this year, according to financial statements.
ING Direct has attracted 80,000 additional customers in Canada since January, Aceto said. Scotiabank forecasted in September 2012 that the business would have 3 million clients in five years.
“This has been a year of some transition and we expect a significant increase in the trajectory from a customer perspective in the years ahead,” Aceto said. “We have a longer-term plan that still aligns with the numbers we talked about.”
The lender is also planning to add a Tangerine credit card by the first half of 2015, Robin Hibberd, Scotiabank’s executive vice president of retail products and services for Canadian banking, said in today’s interview.
“There’s no doubt it’s going to be part of our future product offering,” Hibberd said. “We’re going to do something that’s certainly simple and easy and transparent and great value.”