Western Financial Group Inc. in High River, Alta., is buying AgriFinancial Canada Corp. and its credit card division from C.A. Bancorp Inc. and Sentry Select Total Strategy Fund.
The $18 million deal should be completed by November, said Bob Marshall, president of Bank West, a subsidiary of Western Financial, whose main focus is insurance and financial services in small communities across Western Canada. Western Financial has about 90 insurance offices in Western Canada.
Agrifinancial and Agri Credit Card has about 40 employees and will be run as a division of Western Financial out of Winnipeg.
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“It is enhancing our portfolio at Bank West and really strengthening our position in the agriculture sector,” Marshall said.
AgriFinancial is a leading lender to agribusinesses in Western Canada with more than 25,000 farmers who carry the company’s specialty credit card.
The credit card started in 1995 to assist local agriculture dealerships in their receivable financing. Farmers were able to place purchases on the card and settle up later. Interest rates vary from 11 to 22 percent on delinquent accounts. It is not affiliated with a larger credit card company such as Visa or MasterCard.
“It is considered a closed loop card,” Marshall said.
In addition to the credit card, Western Financial provides term loans to farmers buying or leasing farm equipment.
Bank West works mostly through brokers while Agrifinancial dealt with 250 farm dealerships in Western Canada. A subsidiary of Western Financial, Bank West started in January 2003 and took in more than $1 million in deposits in its first day of business.
Bank West is able to take deposits and offer other banking services, while C.A. Bancorp did not and could not raise funds the way a bank could. The company originally looked at Agrifinancial as a partner to fund its loans but then decided on an outright purchase because it complemented the overall business.
In 2001, Western Financial Group’s insurance division, WFG Agency Network Inc., formerly Western Insurance Network, became the largest insurance broker network in Western Canada. That same year it also formed the Western Communities Foundation Group, a non-profit organization created to support the communities in which it operates.
In February 2005, Western Financial Group acquired Federated Life Insurance Company of Canada and changed the name to Western Life Assurance Company.
The company also operates Alberta travel agencies under the Thomas Cook-Marlin Travel franchise in High River, Okotoks, Strathmore, Brooks and Drumheller.
