Canadian Western Bank buys HSBC insurance operations

The insurance operations of HSBC Bank Canada, known as Canadian Direct Insurance Inc., are to be purchased by Canadian Western Bank according to a letter of intent signed by the banks. Terms of the deal are a cash payment of $25.4 million, including a 25% premium over book value. Canadian Direct will continue to operate as a stand-alone entity with its current staff and management.Last year, Canadian Direct had net earned premiums of $36 million and ended the year with balance sheet assets of $105 million.Canadian Western Bank says the purchase will add the insurance product to its existing stable of financial services aimed at Western Canadians, and it expects the insurer to contribute significantly to revenues.”Being acquired by Canadian Western Bank is a winning situation for all parties involved,” says Brian Young, president and CEO of Canadian Direct. “Employees are retained, customers continue to have a choice and Canadian Direct will carry on business under our current model, which has been key to our success.”