Meridian, the largest credit union in Ontario, says it will create a new national bank to serve customers outside Ontario.

Meridian Bank is not expected to begin operations for another two years, offering online and mobile banking services.

Initially, Meridian Bank will not have any bricks-and-mortar branches. But Meridian CEO Bill Maurin told CBC News that a few branches will be built in the years after it launches online. "It will be very selective," he said, adding that Meridian Bank eventually plans to expand beyond retail banking.

While Canadians are comfortable doing retail banking online, he said commercial banking is "a face-to-face business" that requires a street presence.

Meridian says its new bank will be a wholly owned subsidiary and its shares will not be publicly traded.

As a credit union, Meridian has aggressively tried to take market share from the big banks and from online banks like Tangerine and PC Financial. It made a splash earlier this year by offering one-year fixed mortgages at 1.69 per cent, below what virtually every other lender was charging.

'Bold and feisty'

"We pride ourselves on being bold and feisty and we will bring that philosophy to Meridian Bank," Maurin said.

Meridian could have chosen to convert from a provincially regulated credit union to a federal credit union with power to operate across the country.

But like most credit unions, it has chosen not to do that. So far, only one provincially regulated credit union — New Brunswick-based Caisse populaire acadienne ltée — has chosen to convert to a federal credit union.

Maurin said Meridian looked into the possibility of becoming a federal credit union, but decided to expand across the country as a bank as that's a financial entity Canadians are most used to. "The understanding of credit unions is not where we'd want it to be," he said.

Meridian has steadily grown through mergers and acquisitions to the point where it is now the largest credit union in Ontario, with 81 branches and 270,000 members in southern and central Ontario. It has $14 billion in assets under management.