Canadian Imperial Bank of Commerce (CIBC) has signed a definitive agreement to acquire CAD$2.1bn credit card portfolio of Citigroup's Canadian MasterCard business.
The acquisition of Citi’s MasterCard portfolio includes accounts associated with co-branded Petro Canada credit cards that offer the ‘Petro Points’ rewards program.
CIBC has said that the transaction is expected to be accretive to its earnings during the first year following its closing. In addition, prior to closing, non-performing accounts will be removed from the acquired portfolio and from Broadway Credit Card Trust, which has securitized certain Citibank MasterCard receivables.
The transaction is subject to regulatory approval, and is expected to be closed by October 31, 2010.
Vikram Pandit, CEO of Citi, said: “This transaction demonstrates the continued progress we are making in our efforts to divest non-core assets. With this sale behind us, we will continue to focus on growing our global banking, global transaction services and Citi private bank organizations, leveraging Citi’s unique global reach to the benefit of our clients.”
Gerry McCaughey, president and CEO of CIBC, said: “This acquisition is directly aligned with our strategy to grow our core Canadian operations. This is the right risk-aligned way to grow our credit card business in Canada and further strengthen our leading position. With our scale, platform and operating synergies, combined with our expertise in credit cards, we are confident this transaction furthers our strategic growth objectives.”