10:51 AM EDT, 08/01/2024 (MT Newswires) -- Banco Santander SA won a key approval in its years long effort to expand in Canada, where the Spanish lender already has a foothold in auto finance, Bloomberg is reporting Thursday.

Canada's Minister of Finance has issued letters patent incorporating Santander Consumer Bank as a federally regulated financial institution, according to a notice published in the government's official newspaper in June.

Bloomberg said it's a "significant step forward" since Santander five years ago started the process of securing a bank license in Canada, a heavily regulated market that's proven difficult for foreign lenders to penetrate. It noted the Spanish firm had a presence in Canada since it agreed to buy car-financing company Carfinco Financial Group about a decade ago. Being able to accept deposits could help finance its credit portfolio, the report added.

Bloomberg noted Spain's biggest bank still faces a second major hurdle, securing an order to commence and carry on business from the Office of the Superintendent of Financial Institutions. That decision is likely not imminent, because the bank regulator has up to one year from the time the letters patent were issued to make that order, it also noted

OSFI's review process will include an on-site visit, according to a guide to bank approvals on the regulator's website. And before issuing the order, it must be satisfied that the bank has adequate capital as well as "the necessary systems, management structure, control processes and regulatory compliance management systems in place."

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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