Money world

Oil prices plunged Wednesday on a stronger dollar and amid investor concern that the Chinese government will continue to tighten its credit policy.

What prices are doing: Oil fell $1.87, or nearly 2%, to settle at $77.62 a barrel, after dipping as low as $76.96 a barrel earlier in the session.

On Tuesday, oil rose for the first time in six days, recovering from its lowest level so far this year.

What’s driving prices: Reports that China has asked major banks to cease lending until the end of the month in order to tighten the country’s credit market spooked investors. The news comes a week after the Chinese government raised bank reserve requirements for the first time since 2008.

"This shows us that China is serious about slowing down its explosive demand growth," said Phil Flynn, a senior market analyst at PFG Best. "If the Chinese government continues to take steps to slow the economy, it’s going to be bearish for prices in the short term fast cash now."

Meanwhile, the dollar rose as investors lost their appetite for risk, worrying about China’s attempts to slow its economic growth.

"That market seems to be on fire today," he said. "The dollar’s incredible strength is definitely going to put pressure on the market."

What analysts are saying: "It’s going to be harder and harder to maintain these prices," said Flynn. "There’s no doubt the economy is getting better, what is in doubt is whether that translates into $78 to $80 prices for oil."

Flynn said he wouldn’t be surprised to see a major sell-off in the next couple of months and he predicts that oil may drop as low as $40 a barrel. 

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The euro is poised to decline to a three-month low of $1.4446, Gaitame.com Research Institute Ltd. said, citing trading patterns.

The 16-nation currency, which climbed to a one-year high of $1.5144 last month, has entered a near-term downtrend as the spot price has fallen below its 60-day moving average, said Tsuyoshi Okada, managing director at the research unit of Japan’s largest foreign-exchange margin dealer in Tokyo.

“The charts are now showing signs of change for the euro, and herald an end of its rising trend,” Okada said. “Should the decline of the euro gain traction, the immediate target will be mid-$1.46 and the next target will be the $1.4446 level.”

The euro traded at $1.4732 as of 9:34 a.m. in Tokyo from $1.4732 yesterday in New York. The currency has declined 2 no fax cash advance.7 percent since reaching a 15-month high on Nov. 25.

The single currency last traded below $1.4446 on Sept. 8. “This level has served as a key resistance level for the euro’s rising trend that began early this year and lasted until August,” Okada said. A resistance level is where sell orders may be clustered.

The euro’s 60-day moving average was $1.4844 yesterday, according to data compiled by Bloomberg. The currency remained above the average from Aug. 19 until Dec. 4.

In technical analysis, investors and analysts study chart of trading patterns and prices to forecast price changes in a security, commodity, currency or index.

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Americans are inking a lot of deals to buy homes.

In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts.

Although these are not closed sales, and some deals can fall through, signed contracts are a good indicator of where the housing market is headed.

Between September and October NAR’s Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That’s the biggest year-over-year gain in the history of the index.

The PHSI is also at its highest level since March 2006, and the rise confounded expert expectations. A panel of industry analysts put together by Briefing.com had forecast a 1% drop in new contracts.

NAR’s chief economist, Lawrence Yun, gives much of the credit for increased sales to the homebuyer’s tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000.

"The tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," Yun said in a prepared statement.

The credit had been due to lapse on Dec. 1, so many October buyers may have acted to get in under the wire.

However, the credit has been extended through the middle of 2010 and expanded to include many move-up buyers. The housing industry hopes that will keep sales perking until the economy picks up and markets return to a more normal condition.

In a related story, the Census Bureau reported that private residential construction spending surged 3.9% during October.

Yun cautioned, however, that housing market indicators, such as pending sales, may weaken over the next few months.

"The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months," he said.

"Given the lag time, we could see a temporary decline in closed existing home sales from December until early spring when we get another surge," he added. "But the weak job market remains a major concern and could slow the recovery process."

The good news is that number of homes on the market has declined, removing some of the bloat that has depressed prices. There is now a seven month supply of homes on the market at the current rate of sale. which is down from 10.2 months a year ago. Yun predicted that housing conditions could return to near normal and home prices firm up by mid-2010.

"That would mean broad wealth stabilization for the vast number of middle-class families," he said. 

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On the gift card rack in Shoppers Drug Mart, there are cards for iTunes, movie theatres, Toys `R’ Us and Chapters Indigo. There are even cards for Molly Maid house cleaning services and cards that can be redeemed online at virtual worlds like Habbo Hotel.

Canada’s gift card market, worth roughly $6 billion, has exploded since retailers began issuing plastic cards instead of paper certificates. Now, with gift cards topping the charts as the No. 1 holiday gift, credit card companies are hoping to take a bigger slice of that market.

American Express Co. has struck a partnership with Shoppers to sell its new gift card, which it bills as a "game changer" for the Canadian market.

As the first general-purpose gift card that is completely fee-free for the recipient, Amex says its debut is expected to pressure issuers of rival Visa and MasterCard gift cards to also eliminate back-end fees.

"This is going to force other companies in the gift card space to follow our lead," said Howard Grosfield, vice-president at American Express Canada.

Credit-card gift cards are exempt from Ontario’s 2006 gift card legislation, which banned expiry dates, limited fees and beefed up consumer disclosures on most retail gift cards.

Unlike other general-purpose gift cards, Amex has no after-purchase fees that erode the card’s value over time.

While the purchaser pays an upfront charge, there are no fees to check the balance, no service charges, no costs for card replacement and no expiry date, Grosfield said.

The purchaser’s initial loading price ranges between $4.95 and $6.95, depending on the card’s value of $50, $100 or $200. Grosfield says that pays for Amex to produce the plastic and provide free replacements for lost or stolen cards.

"It is really the back-end fees that really seem to be the big bone of contention in the marketplace, and that’s what’s been completely eliminated on this product," he added.

Rival Visa and MasterCard gift cards have initial loading prices and other service charges that generally apply after six months, along with replacement fees for lost or stolen cards.

Amex says Canadians are now demanding "more transparency" on fees of all kinds, including credit-card gift cards.

While Finance Minister Jim Flaherty introduced new credit-card regulations and a proposed voluntary code of conduct for credit and debit, credit-card gift cards were not mentioned in either document.

Nonetheless, Amex’s focus on fees is extremely timely for Canadians. A recent study by Deloitte and Touche predicted that gift cards and certificates would be the No. 1 Christmas gift for 2009.

"We think it can be a huge market if it is treated in the right way," Grosfield said.

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Malaysia cut income tax for a second straight year, aiming to spur consumer spending and private investment and help the economy recover from a recession.

The top personal tax rate will be reduced to 26 percent in 2010 from 27 percent, Prime Minister Najib Razak said in his budget speech in Kuala Lumpur today. Southeast Asia’s third- largest economy is expected to expand 2 percent to 3 percent in 2010 after shrinking 3 percent this year, the government said.

“Private sector activity is anticipated to pick up following signs of recovery, enabling the government to consolidate its fiscal position for greater policy flexibility in times of crisis,” the Ministry of Finance said in its 2009/2010 economic report today. “Emphasis will be on creating a conducive environment for businesses and entrepreneurship to thrive in a more liberalized environment.”

Najib has rolled back decades-old protectionist policies to spur investment since taking over as prime minister in April, opening up services industry to foreign investors and easing rules on ethnic-Malay ownership in companies. Najib told parliament today that he wants to transform Malaysia into a “high-income economy.”

“So far, we have been pampered with a series of promising reform-related announcements since Najib took the helm,” said Azrul Azwar Ahmad Tajudin, chief economist at Bank Islam Malaysia Bhd. in Kuala Lumpur. “However, all these investor- friendly announcements will mean nothing if their execution is weak or if they fail to translate into effective action plans.”

Foreign Investment

Malaysia will review rules that may be barriers to investment, and plans to attract foreign investors to take up stakes in local companies, the finance ministry said.

“Under the second wave of privatization, selected government agencies will be privatized,” it said. The government will also provide incentives for investors in five growth corridors and promote the Islamic finance, tourism and information and communications technology industries, it said.

The budget will help open up the Malaysian economy further and address a policy adopted in 1971 that gives advantages to the ethnic-Malay majority in business, housing and government contracts, Second Finance Minister Ahmad Husni Hanadzlah told reporters in Putrajaya yesterday.

“We have to do things differently now,” Najib said in the economic report. “There has to be a paradigm shift and a change in mindset” as Malaysia is “committed” to enhance its competitiveness through market-driven policies, he said.

New Model

Malaysia can’t rely on its old model of developing indigenous, ethnic-Malay entrepreneurs, Ahmad Husni said. Local businesses will need to face market forces, he added.

The government will enable private consumption and investment to stimulate the economy in 2010 as public spending cools, Ahmad Husni said.

The budget shortfall is expected to narrow to 5.6 percent of gross domestic product next year from a 22-year high of 7.4 percent in 2009, according to today’s finance ministry report. Spending in 2010 is expected to be 189.5 billion ringgit ($56 billion), 11.3 percent smaller than this year’s outlay.

The government will review its fuel and other subsidies to ensure they benefit “target” groups and remain “lean,” the ministry said. Competitive bidding for government procurement will help reduce costs, it said.

Lower Subsidies

Subsidies paid by the government to keep prices of fuel and other essential goods and services low will fall 14.7 percent to 20.9 billion ringgit in 2010, helped by an “absence” of payments for food security, fuel cash rebates, sugar, flour and bread, the ministry said. Fuel subsidies are forecast to rise 10.7 percent to 10 billion ringgit amid higher oil prices.

The government will spend less on supplies and services as well as grants to state agencies next year, even as outlays for pensions, salaries and debt servicing increase, it said.

“The federal government will align expenditures to available resources to ensure fiscal sustainability and macroeconomic stability,” the ministry said. “The thrust of fiscal policy in 2010 is to strengthen and sustain the recovery process by further boosting domestic demand.”

A proposed new private pension scheme will boost funds available for the country’s capital markets and provide an additional savings option, it said.

Malaysia, which has unveiled 67 billion ringgit of stimulus initiatives under two packages in the past year, has spent 8.2 billion ringgit from the total as at the end of September, the finance ministry said. The impact from the stimulus will be felt more in the second half of 2009 and spill over into next year, it said.

Light Rail

Major construction projects expected by the government to boost growth next year include a light rail project in and around the capital Kuala Lumpur, a water transfer project and a new low-cost carrier terminal at the country’s main airport.

Total taxes are forecast to shrink 2.8 percent as a 28.3 percent plunge in oil income as well as lower investment, licensing and sales tax revenue counter rising collection from excise duties, company and individual taxes, the ministry said. Income taxes will be bolstered by a recovering economy, the government said.

Inflation will “rise modestly” in 2010 as global commodity prices gain, the ministry said. Malaysia’s monetary policy will “remain supportive of growth,” it said.

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Implementing tougher new credit card disclosure rules more quickly could help consumers but could also lead to unintended consequences and bank compliance problems, Federal Reserve Chairman Ben Bernanke said on Wednesday.

Bernanke, in a letter to U.S. Rep. Spencer Bachus, said proposed legislation to accelerate the effective date for the Credit Card Accountability Responsibility and Disclosure Act of 2009 to December 1 would force the Fed to implement provisions of the act without adequate public comment.

Moving the date up “could benefit consumers by providing important protections earlier than scheduled (including protections against applying increased rates to existing credit card balances),” Bernanke wrote in response to questions from Bachus. Bachus, of Alabama, is the ranking Republican on the House of Representatives Financial Services Committee.

“However, it would also require the Board to implement the remainder of the act without providing the public with advance notice and the opportunity to comment, which could lead to unintended consequences,” Bernanke wrote no fax payday loan.

Bernanke also said that some financial institutions, particularly smaller institutions, may have difficulty adjusting their systems and business models to implement the rules more quickly.

“Board staff understands that many small institutions (such as community banks and credit unions) rely heavily on third-party vendors to adjust their systems and that these vendors are currently overwhelmed by the demand from all the institutions they service,” he wrote.

The Fed chairman said card issuers “must be afforded sufficient time for implementation to allow for an orderly transition and to avoid unintended consequences, compliance difficulties and potential liabilities.”

(Reporting by David Lawder; Editing by Padraic Cassidy)

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American International Group has agreed to sell it’s Taiwan life insurance unit for $2.15 billion, a key step in its effort to raise cash after a U.S. government bailout last year saved the company from collapse.

Primus Financial, a new firm founded by Citigroup’s former investment banking head in Asia and a Chinese partner, has agreed to purchase Nan Shan Life, AIG said on Tuesday, ending a roughly five-month auction that saw several corporate and private equity bidders pursue the division.

With the Nan Shan agreement sealed, AIG is now focused on raising cash from two other major assets in Asia. Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.

Both companies have also attracted acquisition interest, though nothing yet has materialized.

The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the company after it nearly collapsed late last year.

Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings will pay $2.15 billion for AIG’s 97.5 percent stake in Nan Shan, AIG said on Tuesday.

Some analysts and bankers involved in the deal said putting a valuation on the AIG’s Taiwan life insurance unit was difficult instant payday loan no telecheck.

“The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30 percent discount,” said Pandora Lee, analyst with UBS.

“But for an insurance company, book value is not the only consideration, there are other factors like the people, the products etc,” Lee said. “So its difficult to say at this point if they’ve got a good deal or not.”

Primus and China Strategic will seek loans from Taiwanese banks to finance the deal.

Primus co-chief executive Wing-fai Ng said in an interview with Reuters previously that Primus plans to use Nan Shan as a base to expand to Hong Kong, Malaysia and Japan.

Nan Shan, which has assets of $46.4 billion, has 36,000 sales agents in Taiwan and a market share of 10 percent with its 10 million customers.

The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.

(Additional reporting by Rachel Lee and Chyen Yee Lee in TAIPEI and Parvathy Ullatil in HONG KONG; Editing by Valerie Lee)

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The Toronto stock market closed higher for a fifth session today amid positive industrial data from Canada and the U.S.

The Toronto energy and gold sectors led the way to a gain of 59.77 points to 11,555.6 on the main S&P/TSX composite index, its highest close since the end of September, 2008.

The solid showing followed a report showing that U.S. industrial companies boosted production more than expected in August.

The Federal Reserve says output at U.S. factories, mines and utilities rose 0.8 per cent in August. Economists surveyed by Thomson Reuters expected a 0.6 per cent increase.

"No doubt about it, the U.S. economy is recovering faster than expected, though questions remain about the sustained strength of the expansion," said BMO Capital Markets senior economist Sal Guatieri.

And Statistics Canada reported that manufacturing sales rose 5.5 per cent in July to $41.4 billion, adding to the 2.2 per cent increase reported in June, thanks to improved performances in the motor vehicle and primary metals industries.

Excluding the motor vehicle assembly and motor vehicle parts industries, manufacturing sales increased 2.1 per cent.

"July's strong manufacturing report provides additional force to the case for renewed growth in the third quarter," said TD Bank (TSX: TD) economist Grant Bishop.

"However, with indicators of future shipments easing, we do not anticipate that manufacturing will see rapid gains in the months ahead."

The gold sector was up 0.77 per cent on Wednesday as inflation worries and a weaker U.S. dollar helped push the December bullion contract on the New York Mercantile Exchange up $13.90 to US$1,020.20 an ounce. It earlier reached an intraday high of US$1,023.30, its highest level since March 2008.

On the TSX, Barrick Gold Corp. (TSX: ABX) climbed 39 cents to C$41.09.

The energy sector rose 0.88 per cent as the October crude contract on the New York Mercantile Exchange gained $1.58 to US$72.51 a barrel after the U.S. Energy Information Administration reported a decrease of 4.7 million barrels of oil in the U.S. last week, a bigger decline than the three million barrel drop expected by analysts. Suncor Inc. (TSX: SU) gained 79 cents to C$39.44.

Opti Canada Inc. (TSX: OPC) stock soared 57 cents or 33.93 per cent to $2.25 on heavy trading of 21 million shares on the Toronto Stock Exchange. Opti's sole business is a minority stake in Nexen Inc.'s (TSX: NXY) Long Lake oil sands project.

The reason for the spike wasn't immediately clear, although the company had made a bullish presentation on Tuesday morning at a major oil and gas conference in Calgary. Opti is also frequently the subject of takeover rumours that tend to make its shares volatile.

The Canadian dollar moved up 0 absolutely free credit report.57 of a cent to 93.91 cents US, after rising more than a cent Tuesday amid yet another warning from the Bank of Canada that the strong loonie could derail an economic recovery.

The TSX has racked up a strong series of gains on hopes for a strong recovery and a positive third-quarter earnings season, leaving the market up 52 per cent since the lows of early March and up 28 per cent year to date.

However, analysts think the markets face some stiff headwinds in the near term that could erode those gains, pointing out that the runup has been almost straight up "and the fact that this rally has advanced further than previous rallies coming out of a bear market in the past 50 years," said Phillip Petursson, director of institutional equities at MFC Global Investment Management.

He added that the third and fourth quarters of 2009 could surprise to the upside but if consumers continue to pay down debt and cut spending, "that's going to keep growth somewhat subdued into 2010."

The TSX Venture Exchange climbed 15.19 points to 1,284.54.

New York markets were up sharply as the Dow Jones industrial average rose 108.3 points to 9,791.71.

The Nasdaq composite index moved up 30.51 points to 2,133.15 while the S&P 500 index gained 16.13 points to 1,068.76.

Investors were little swayed Wednesday by the latest report on U.S. consumer prices. The Commerce Department said its consumer price index, a measure of inflation at the retail level, rose 0.4 per cent in August, just above the 0.3 per cent rise economists polled by Thomson Reuters expected.

Excluding volatile energy and food prices, the index rose 0.1 per cent, in line with expectations.

Elsewhere on the TSX, the base metals sector rose 0.34 per cent as the December copper contract jumped 9.15 cents to US$2.9365 a pound. Teck Resources (TSX: TCK.B) gained 75 cents to $30.

In corporate news, the Globe and Mail reported that Magna International Inc.'s (TSX: MG.A) has been told by BMW, the auto parts giant's second-largest customer, that the close relationship between the two companies could be in jeopardy. It said that the German automaker fears Magna will go from parts supplier to competitor if the Canadian company fulfills its goal of leaping into the ranks of mass producers through an ownership stake in Adam Opel GmbH. Magna shares lost $1.92 to $45.09.

Harry Winston Diamond Corp. (TSX: HW) says a winter shutdown at the Diavik mine in Canada's North won't be necessary after all. The shutdown had been scheduled in response to the global economic recession that began about a year ago. Its shares rose 36 cents to $9.52.

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More Canadians received Employment Insurance benefits in June compared with the month before, but the number of new claims fell sharply – a sign that the worst of the recession may have passed.

In June, 816,630 people collected EI, benefits, up 5.1 per cent from May and up 73.1 per cent year over year, Statistics Canada said yesterday. The biggest increases came in Alberta, British Columbia and Newfoundland and Labrador.

Initial and renewal claims received in June fell by 7.9 per cent, the largest drop since the job market and the economy turned sour last October. Claims fell in all provinces and territories, with the exception of Ontario, which saw a slight increase of 0.9 per cent.

“We are still in `the worst of times.’ Every month, tens of thousands more Canadians are laid off than can find new jobs,” United Steelworkers economist Erin Weir wrote in a report yesterday.

“The better news is that new benefit claims declined sharply, albeit from an all-time record high. While hardly `the best of times,’ this revelation provides hope that Canada’s labour market is getting worse more slowly.”

In another potentially positive sign, the number of EI beneficiaries rose more slowly in the second quarter of this year compared with the first three months, 18.8 per cent versus 25.2 per cent.

Between June 2008 and June 2009, the number receiving regular EI benefits increased in all 28 census metropolitan areas. Alberta and Ontario were particularly hard hit.

In Calgary, the number of people receiving EI benefits rose nearly fivefold in June to 19,020 from 3,960 in June, 2008. In Edmonton, the number of recipients increased more than four times to 16,250 from 3,950 the year before.

“Of course, these staggering percentages reflect not only the huge loss of jobs in Alberta, but also the province’s previously low unemployment rate,” Weir said.

In Ontario, the number of EI claimants rose by 3 per cent in June, much slower than the 14.3 per cent increase during the previous month, StatsCan said.

The biggest increase in the province was in Windsor, where the number of EI recipients more than tripled in June to 14,240 from 4,480 a year ago. Claims more than doubled in Toronto, up to 95,820 from 45,080.

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Anne-Marie says she fell into a "vicious" debt trap after losing her job in late 2007.

The 41-year-old single mother, who doesn’t want her last name published, was working at a financial services firm when the global credit crunch hit. She quickly became collateral damage.

She found a new job, but at just half her previous salary. Making ends meet suddenly became difficult.

Saddled with some old business debt, she began relying on a personal line of credit and her Visa card to cover daily expenses. Although she kept up with her payments, Anne-Marie spiralled deeper into debt.

It was the Toronto civic workers’ strike that pushed her over the edge. Scrambling to find alternatives for her daughter’s city-run day camp, she was left with a maxed-out credit card and the prospect of having no money in her account for 10 days.

Randy Carswell is another hard-working parent.

Married with five children, the 51-year-old autoworker from Oshawa has been laid off from General Motors several times since January 2008. "All you do is constantly worry about your family and your kids and keeping the roof over your head," he said.

His Employment Insurance benefits ran out early this year, just as he faced another brutal seven-week layoff. Without any support, Carswell was at risk of falling behind on his mortgage and other bills.

Although their stories are different, there is a common thread. Anne-Marie and Randy received urgent help from their banks – and they are far from alone.

Canada’s biggest banks are busy offering financial lifelines to distressed consumers during this recession, and some are doing so on an unprecedented scale. Tens of thousands of customers are being allowed to skip mortgage payments without penalty, consolidate their debts and switch to lower-interest loans.

Banks say it’s about giving their customers a helping hand during a tough economic time. But it is also an astute business strategy designed to keep loan losses in check, secure client loyalty and generate priceless word-of-mouth advertising to attract new customers when the good times return.

Provisions for credit losses, money banks set aside to cover soured loans, are rising and not expected to peak until 2010. Those reserves come at the expense of profits.

Moreover, economists expect the unemployment rate to rise in the next few months even if the recession ends. The national jobless rate hit 8.6 per cent in June but is expected to reach 10 per cent.

Increasing numbers of Canadians are falling behind on their bills, prompting bankruptcies to soar. That’s worrisome for banks because outstanding loans are wiped out if a person files for bankruptcy. . It makes sense for lenders to get customers back on their feet.

Credit restructurings make a certain amount of financial sense but the banks’ public relations strategies will inevitably raise eyebrows with key stakeholders, said Thomas Velk, a banking and economics expert at McGill University.

"You don’t want a potentially valuable customer, as a debtor, to go under and therefore cause you to lose your entire loan," Velk said. But offers of help to borrowers in the worst financial shape will cause bank stockholders, bondholders and other depositors to wonder about their own pay off, he said.

"It reminds me of the cynicism of Rahm Emanuel, the adviser to (U.S. President) Obama, who said you never want a good crisis to go to waste," Velk added.

TD Bank, for one, has helped nearly 20,000 clients facing severe financial hardship from February to July under a program dubbed "Project Umbrella." That internal codename is meant to signify the bank’s willingness to shield customers from a rainy day.

"That number (20,000) might seem large, but I don’t think that number is anywhere near the real story," said Tim Hockey, head of Canadian banking and president and CEO of TD Canada Trust.

At one point, TD was receiving about 1,000 inquiries a week from distressed customers. That number has tapered off a bit but the bank is bracing for higher demand same day cash advance. "We think there are more than a thousand customers a week that could use our help if they just felt comfortable doing it," Hockey said.

While it is impossible to help every client, TD estimates its success rate is about 75 per cent. With that in mind, it took the unusual step of launching a cross-Canada campaign to encourage even more to seek help.

Much of that initiative centres on an interactive website called "TD Helps." Customers are giving it mixed reviews. Some online comments are full of praise, while others suggest the site is simply a "PR ploy."

The massive outreach effort is a first in the bank’s 154-year history. Hockey freely admits the move is "counter-cultural for the average bank." Getting it rolling required a massive effort to retrain staff, and executives weren’t convinced at first that going public was the right approach.Project Umbrella is expected to have "no material impact" on TD’s earnings or loan loss provisioning. The bank has 11 million Canadian clients and about 65 per cent of its branches are in Ontario.

Anne-Marie is one of those local clients. In her case, TD arranged for a consolidation loan worth about $19,700 to cover her line of credit, Visa card and overdraft debts. She’ll be debt free in seven years.

She said asking for help was "embarrassing" at first, but she credits TD’s staff for putting her at ease. "The respect they gave me, it felt like I was millionaire coming in to buy a portfolio position," she said.

BMO, too, has launched a special recession support initiative. It started in April as a regional test program in hard-hit communities like Windsor, Hamilton and Oshawa and became a national program in June.

To help get Randy Carswell through his rough patch, BMO provided temporary overdrafts on his account. He was allowed to skip some mortgage payments and was able to refinance his mortgage at a lower interest rate. He’s been back to work since mid-February.

While he had no qualms about seeking help, Carswell concedes it isn’t always easy to swallow one’s pride. "It hurts because you’re a person that’s trying to survive and take of your family, but your ego and your pride gets ripped apart when you don’t have a job," he said.

Canadian Imperial Bank of Commerce is also reaching out to autoworkers in communities like Oshawa, Whitby, Ajax and Bowmanville. "We’ve done some proactive work in communities that have been faced with loss of a major employer," said Larry Tomei, senior vice-president for retail markets. That includes public seminars on loan consolidation, debt repayment and investing severance packages.

Sonia Baxendale, president of CIBC Retail Markets, said the bank is taking a long-term view of its client relationships. "But we also know that when clients have difficult situations, and you help them through those difficult situations, not only do they remain loyal to you, they tell others about it."

The Bank of Nova Scotia is reaching out to distressed clients through its branch staff, while offering a slew of online tips and tools. Clients are seeking help with their investments, mortgages and credit-card debt, said Sue Graham Parker, senior vice-president of public, corporate and government affairs.

Royal Bank of Canada plans to call each of its 10 million customers across Canada this year, said David McKay, head of Canadian banking. In addition, RBC has launched an online advice centre.

It is also offering specialized advice, such as formulating post-layoff financial plans, to customers in such places as St. Catharines, London, Kitchener, Toronto and Oshawa.

"Customers are intimidated," McKay explained.

"They don’t know how to talk to the bank. They are embarrassed. They don’t know where to start – which is why we reach out."

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