Scotiabank to Buy JPMorgan's Canadian Credit Card Portfolio
Yesterday, Scotiabank announced it would purchase the Canadian credit card portfolio of JPMorgan Chase. The deal includes the Sears Canada private label credit cards. The financial terms of the deal were not released.
JPMorgan’s MasterCard and Sears credit card portfolio has $1.32 billion (C$1.7 billion) in receivables and two million active customer accounts. Additionally, Scotiabank will acquire the call center and security operations associated with the cards.
“This transaction is in line with our strategy to grow Scotiabank’s payments business, including credit cards, while providing our shareholders with attractive risk adjusted returns,” said James O’Sullivan, group head of Canadian banking at Scotiabank.
“This agreement enables JPMorgan Chase to streamline its operations in Canada while providing our customers with the opportunity to migrate to and be serviced by Scotiabank’s global consumer footprint,” said Martin Parizeau, CEO, Canada Card Services at JPMorgan Chase.
A company representative said the deal will impact the company’s common equity tier one capital ratio by less than 10 basis points.
JPMorgan had purchased the Sears Canada credit card receivables business in 2005, which allowed Sears to pay special dividends to investors. In November of last year, JPMorgan had told Sears Canada it would not be renewing its agreement, which expires November 15, 2015.