By Ketki Saxena
Investing.com -- The National Bank of Canada (TSX:NA) has unveiled its plans to acquire the commercial loan portfolio from Silicon Valley Bank's Canadian division, in line with National Bank's plan to enhance its presence within the country's thriving tech sector.
The acquired portfolio is valued at roughly $1 billion, comprising loan commitments, out of which approximately $325 million are outstanding as per NBC's official statement.
In terms of this agreement, NBC will gain control over a diverse portfolio spanning Technology, Life Science and Global Fund Banking sectors. The integration process post-acquisition will be overseen by Tuyen Vo, who has been leading the Bank's Technology and Innovation Banking Group since 2019.
"This acquisition represents a major leap forward in our ongoing efforts to increase our footprint within Canada's dynamic tech industry," said Michael Denham, executive vice-president of commercial and private banking at National Bank. "Our Technology and Innovation Banking Group has seen high growth rates over recent years - this acquisition should serve to further consolidate our position."
Bloomberg Intelligence analyst Paul Gulberg said in a note, that the deal was “likely an opportunistic purchase,” and that National “ample capital for the loans,” and equity ratios well above minimum levels mandated by regulators.
The deal is anticipated to reach completion in the coming weeks pending necessary approvals. It is important to note that the transaction isn't projected to have any substantial impact on bank’s financial results.