CIBC strikes deal to take over Costco credit card business in Canada


In the deal announced on Thursday, CIBC also takes over the existing Canadian Costco credit card portfolio, with more than $3 billion in outstanding balances. The move comes as the Big Six banks search for additional sources of revenue to bolster low income from credit cards balances as the COVID-19 pandemic weighs on consumer borrowing. Retail giant Costco operates 813 warehouses globally and 105 across Canada. The program is expected to start next year. “Canadian personal and commercial banking is certainly a game of inches given how mature the market is, and so the ability to pick up $3 billion in high-quality credit card balances all in one swoop does not happen every day,” Scotiabank analyst Meny Grauman said in a note to clients. “The real prize here for CIBC will be the cross-selling opportunities to millions of affluent card holders, only a small portion of which are current CIBC customers.”

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