Canadian lender Equitable Bank has signed agreements to acquire domestic digital rival Concentra Bank for C$470m ($370.26m).

The deal is aimed at accelerating the growth and diversification of Equitable Bank and will add an asset base of around C$11.3bn ($8.9bn) along with scale in core product lines.

Equitable will acquire Credit Union Central of Saskatchewan’s (SaskCentral) 84% common share equity interest in Concentra. It has also signed support agreements to buy a majority of the remaining 16% stake from additional Concentra shareholders.

Equitable president and CEO Andrew Moor said: “Acquiring Concentra strengthens Equitable’s position as Canada’s Challenger Bank by adding scale, talent, customer and partner relationships that will allow us to better serve our purpose of driving change in Canadian banking that enriches people’s lives.

“This is one of the most important and consequential transaction in our 50 plus history, and it accelerates our growth plan by several years.

“The addition of Concentra elevates Equitable’s place among the country’s top-tier financial institutions, expands our core markets of Personal and Commercial banking including alternative, reverse single-family mortgage loans, commercial lending and equipment leasing, and furthers our standing relationship with credit unions with whom we share a strong philosophical bond.”

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Headquartered in Saskatoon, Concentra is a digital bank, which operates under the trade name Wyth Financial.

It caters to retail and businesses with a range of services including savings and mortgages. It also provides fintechs with banking as a service.

Additionally, Concentra is one of the largest providers of wholesale banking and trust solutions to Canadian credit unions.

Concentra president and CEO Don Coulter said: “We are delighted to join Equitable in its challenger bank quest. This powerful combination of capabilities and services is right for our employees, customers and community partners and creates an opportunity for our team to excel as part of an award-winning Canadian bank that shares our commitment to innovation.”

The board of directors of Equitable, Concentra, and SaskCentral have approved the acquisition.

The deal now awaits regulatory approval and is expected to close in the second half of 2022.

Equitable Bank will fund the purchase through C$200m ($157.53m) of new equity to be secured through a bought deal offering of subscription receipts.

The remainder will be funded through a credit facility from a group led by TD Securities and RBC Capital Markets.