Duo Bank of Canada (Duo Bank) has secured approval from Office of the Superintendent of Financial Institutions (OSFI) for its acquisition of lender Fairstone Financial Holdings and its completely owned subsidiary Fairstone Financial.

Following the acquisition, the combined entity will have $5bn in assets and serve over 1.5 million customers.

Under the agreement, Fairstone Financial’s president and CEO Scott Wood will become the president and CEO of the combined entity.

Montreal, Quebec-based Fairstone Financial is a credit solutions provider for near-prime borrowers and has assets worth over $3bn.

Fairstone Financial stated that the combined entity will have coast to coast footprint combined with an online presence.

It plans to offer a wide range of credit offerings along with related insurance and rewards solutions.

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Duo Bank/Fairstone group chair of the board Stephen Smith said: “Both businesses, Duo Bank and Fairstone, are highly complementary and well-aligned in terms of strategic growth objectives with a mission to provide everyday Canadians with access to financial solutions that fit their needs.

“It is our belief that this acquisition adds diversity to the Canadian financial services landscape and further strengthens the growth and market opportunities for both companies.”

Duo Bank had first signed a deal to buy Fairstone Financial in February 2020 for an undisclosed sum. It includes all operating subsidiaries of Fairstone Financial.

Wood added: “Combining Fairstone’s 100-year market presence and its market-leading near-prime consumer lending capabilities with a Schedule I Bank with a significant credit card business will allow us to provide everyday Canadians with even better access to financial solutions that fit their needs.”