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Bloomberg
Canadian Imperial Bank of Commerce (CIBC) is taking over Capital One Financial Corp’s Costco Wholesale Corp credit card business in Canada, helping diversify its portfolio away from travel rewards.
CIBC will buy Capital One’s existing portfolio of Costco-branded Mastercards, which has more than $2.4 billion in outstanding balances, and become the exclusive issuer. The change is expected to begin in early 2022, CIBC said.
CIBC CEO Victor Dodig said the bank plans to invest in non-travel cards to capture more consumer spending as the pandemic wanes. The move also is meant
to draw customers to firm’s Canadian retail-banking franchise, which has been on the rebound as its mortgage business improves.
The lender’s Canadian personal and business banking unit had average credit card balances of C$10.6 billion in the three months through July. That was up 0.6% from the
previous quarter.
“This relationship enables us to diversify our credit-card portfolio in everyday rewards, grow our market share in payments and provides a meaningful opportunity to deepen relationships by meeting the financial needs of Costco members,†Laura Dottori-Attanasio, head of personal and business banking, said in the statement.