Fintech Upstart Koho Financial Applies to Be Bank in Canada

By Paul Vieira

A Vancouver, British Columbia-based fintech upstart, which recently attracted investment from U.S. private-equity firms, has applied to become a deposit-taking bank in Canada.

The Canada Gazette, which is the official publication of the Canadian government, said in its weekly note said Koho Financial intends to file an application with the country's banking regulator, the Office of the Superintendent of Financial Institutions, and the Minister of Finance, Chystia Freeland, to become what's known as a Schedule 1 bank. It intends to operate under the Koho Bank banner in English, and Banque Koho in French-speaking Canada.

A Schedule 1 bank takes deposits from savers, and offers loans and services to Canadian residents.

In a statement, Koho Financial said Peter Aceto, former chief executive of Tangerine Bank, a unit of Bank of Nova Scotia, was joining the company to help secure the banking license from Canadian authorities.

Koho Financial CEO Daniel Eberhard said the pursuit of a banking license is part of the company's mission to "democratize access to the best financial products… This is a crucial next step in that journey."

Drive Capital and Eldridge Industries, two U.S. private-equity firms, were among participants that last month invested 86 million Canadian dollars, or $63.8 million, in Koho Financial through a transaction that values the business at about C$800 million.

Write to Paul Vieira at [e-mail]

(END) Dow Jones Newswires

01-26-24 1824ET