Ford Motor to apply for Canada banking license

Ford Motor Co plans to apply for a license to establish and operate a bank in Canada that would offer guaranteed investment certificates to institutional investors through brokers, the company said on Monday.

The company would continue to provide dealer and customer financing in Canada, but getting a bank charter would give it an additional funding avenue through Canada Deposit Insurance Corp-insured deposits, Margaret Mellott, a spokeswoman for Ford Credit, said in an interview.

"As a strategy globally, Ford Credit diversifies its funding sources, and this fits into that strategy of diversifying sources of funding to continue to support Ford dealers and customers," she said.

"Over time, there may be a very small, very limited capability for customers to buy GICs over the Internet, but primarily we would expect brokers to sell GICs to (institutional) investors."

Mellott said it was too early in the process to say how big the operation would be.

A notice posted on an official government of Canada website late last week said the bank would be called Ford Credit Bank, and that it would be headquartered in Oakville, Ontario.

Ford was the only large U.S. automaker to avoid bankruptcy last year. The Dearborn, Michigan-headquartered company has forecast a "solid profit" in 2010 and has said it hopes to soon return to an investment grade credit rating.

The leveraging of its assets, and the government-supported reorganizations of General Motors Co GM.UL and Chrysler Group LLC, left Ford with far more debt than its U.S. rivals, but it posted a small profit in 2009 and a $2.1 billion profit in the first quarter of this year.

Ford gained market share in Canada throughout the massive downturn in the auto sector and has continued to do so during the recovery. It was the No. 1 seller of vehicles in Canada last month.