Quote:
Originally Posted by Sample00
purchase of a commerical building. in most cases chartered banks or credit unions require a 35% downpayment when purchasing said commercial building.
ATB will do financing for 20-25% down and typically at a rate that is 1-1.5% lower than charters or credit union. it creates a greater exposure for the ATB should the building mortgage go into default. commercial properties typically dont move the same way in valuations than residential properties. there tends to be a great fluctuation than residentials.
great for the consumer, no doubt, but not exactly on the same level playing field as the other financial institutions.
ATB will typically pay more for term deposits, whether regular or RRSP's. again not on the same playing field.
As a consumer its great, but as a taxpayer I have issues with this.
they are a provincially governed financial institution and I dont believe that the government should be involved in business, no matter if its financial institutions or any other business.
Governments are meant to govern, not compete with other businesses.
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Being a person who worked at ATB for 8 years of my life they definatly seemed to be playing on a level playing field with the big banks. I can't really comment on the business side of the loans that you said, however, they follow the same rules as the big banks. However, here are some examples of how they are playing on a level playing field with the big banks:
1. In order to have a conventional mortgage and avoid paying CMHC fees you must put 25% down (they didn't follow this prior to 1997).
2. I attempted to get deposits and loans from customers but was not able to bring their money into the bank because other banks were able to beat the rate I was offering. In fact they do not tend to give higher rates on deposits or discounts on loans unless a person has most of their business with ATB, which is very similar to the other banks.
3. When I was a lender I would have people approach me for loans which I turned down in a lot of cases because they thought they could do it just because of their collateral. However, ATB follows the same philosophy as the big banks in which you need to have collateral, good credit rating, and the cash flow to pay the loans.
4. Finally they are very profit driven and set quite agressive budgets for growth. Prior to 1997 ATB was losing money do to shady deals and plain bad business deals, however, since 1997 they have recorded a profit in every quarter. They are doing what they can to be independently financially viable because they are probably wanting to privatize so they are not restricted to operating in Alberta.
Don't get me wrong I don't believe government should be in business either. However, when it comes down to it the Alberta government has to be willing to let ATB privatize. My suspicion is that when ATB was losing money the government wanted to turn its fortunes around and distance itself from it, hence the crown corp in 1997, however, now that it is making so much money they are reluctant to let go of such a cash cow. That is just my take on the ATB.
As for what Taliban Jack is saying, it just seems stupid to me.