TD Bank views foreign students as a growth source despite Canada’s cap on study permits to ease rental-housing demand.
Canada’s federal government has announced a 35% decrease in international student permits from 2023 to 360,000 this year, with the limit set to remain for two years.
Canadian lenders, including Toronto-Dominion and Canadian Imperial Bank of Commerce, are facing challenges in personal-banking account growth due to changes in government policies.
Toronto-Dominion added the most new customers since 2017, while rival Canadian Imperial Bank of Commerce attracted 650,000 new clients last year. The bank is investing in attracting new customers, including international students, and has formed partnerships to help woo foreign students, including a referral agreement with India’s HDFC Bank and a new pact with online study-abroad platform ApplyBoard.
Canadian study permit applicants must have at least $20,635 in a guaranteed investment certificate account, similar to a U.S. certificate of deposit. ApplyBoard, a Kitchener-based startup, will use secure technology to help students meet these requirements and funnel potential clients into Toronto-Dominion accounts before arrival in Canada. The bank expects strong growth in serving foreign students.
Toronto-Dominion’s competitors are targeting newcomers and students, with Royal Bank of Canada partnering with India’s ICICI Bank Ltd. in 2022 and CIBC having deals with Student Price Card Ltd. and Pearson International Airport. Jeff Smith, senior vice president of client segmentation at CIBC, believes this is a growth channel, as newcomers and students make up over a third of the bank’s new customers last year.