Bontreal: With the worldwide growth in coproduction and coventure, and advantageous pricing structures, banks in Canada are in an excellent position to expand their domestic business as they push to win over new clients offshore.

Royal Bank is actively pursuing foreign business and has already gained a foothold in Europe, financing more than $100 million in production, mostly treaty coproductions, in more than 10 countries, says media and entertainment head Robert Morrice.

‘The development is that every time we go to one of these (foreign) markets the local producers and local government encourage us to start financing indigenous production. That happened again in Banff,’ says Morrice.

At the same time, Banque Nationale de Paris is expanding its film and tv financing business here in Canada with the view its international Paris-based network gives it an edge in the domestic market.

Montreal-based Diane Dube, assistant vp at BNP (Canada), says the bank now has four full-time account managers servicing the film and tv sector.

A former Royal Bank executive, Dube says bnp will be highly selective as it manages growth in high-risk production financing. She says the bank has small, midsize and public companies as clients.

‘We’re looking at project financing, that’s our main goal,’ says Dube. ‘Of course we’d like to build up relationships with producers and get most of their production.’

Dube says bnp has an edge in that it is one of the largest banks in the world (it’s ranked in the top 20) with operations in 83 countries.

Royal Bank Financial Group has operations in some 35 countries.

‘A lot of the Canadian banks tend to shy away [from the coproduction business] because it is sort of far away. We think we have a competitive edge there but we don’t compete with the large Canadian banks because we are not a large Canadian bank. We are just a small player in the market,’ Dube says.

Royal’s Morrice says only a few international banks have the reach, industry understanding and the capital base to successfully service global production financing requirements.

Royal currently has active media groups in London, New York and Hong Kong, but much of that activity to date has been ‘wholesale business’ with large media operations.

‘Our real key now is to try and bring media expertise to the [foreign] content-producing market which traditionally has less need for capital. We’re hoping to do projecting financing. In terms of sourcing business we’re already on a first-name basis with most of the players in this market,’ says Morrice.

On international contract issues, Dube says bnp, Paris hired former PolyGram financing specialist Bernard Rits several years back. Rits, who is now world head of entertainment for bnp in Paris, will be visiting Canada in late August and again in September, mainly meeting clients in Toronto and Montreal, she says.

Morrice is a member of the select EuroAim Financiers Club, an annual rendezvous where he meets with as many as 100 European-based producers.

(Two other Canadians attended last year’s session in Luxembourg, Telefilm Canada executive director Francois Macerola and sodec president Pierre Lampron. EuroAim is a pan-European media ii program designed to assist indigenous European producers in their efforts to gain a foothold in the marketplace).

In their efforts to expand, the banks are also following the industry’s lead. According to Telefilm, coproductions are set to hit record levels in ’97 with more than 30 certified productions by mid-year.

Production financing in Canada is largely dominated by Royal, which has about 70% of the business and is projecting $500 million in entertainment-related business in ’97, a major increase from the $350 million signed last year, says Morrice.

However, other banks including the TD Bank, the Bank of Nova Scotia and The Republic National Bank of New York (Canada) have entered the film financing fray looking for a share of the action.

Republic plans to position itself as a boutique offering producers an alternative to larger institutions, says Toronto-based vp Daniel McMullen.

In an earlier Playback story, McMullen said the bank is looking at doing up to $30 million of loans a year in the sector.

Commenting on the current market domination scenario, McMullen said outside of a few long-standing players such as Royal and Security Pacific, banks had historically shied away from film and tv project financing until Bay St. deemed the sector ‘trendy,’ especially since the advent of publicly traded Canadian production/distribution companies in ’93.

bnp affiliate banks include Bank of the West in California and bnp/Dresdner Bank in Germany and Eastern Europe.

bnp’s goal is to become ‘extremely efficient’ and Dube says the game plan is to hire qualified professionals to meet that objective.

In other bank-related news, Cinar Films has announced an agreement for a revolving line of credit and a five-year term loan facility aggregating $110 million with Royal and the Banking Branch and Trust Bank of North Carolina.