Selling mortgage products to National Bank of Canada
TORONTO and MONTREAL, Oct. 14 /CNW/ - Canadian Tire announced today that Canadian Tire Bank ("the Bank") will be expanding the availability of its successful retail and broker deposit products (high interest savings accounts, tax-free savings accounts and GICs) as part of a focused retail banking strategy that will also see the Bank sell its mortgage portfolio to the National Bank of Canada. The sale is expected to close in the fourth quarter 2009 and the transition of customer accounts will be completed by early 2010.
Launched in 2006, the Bank's retail banking products currently include high-interest savings accounts, GICs, tax-free savings accounts, mortgages and the Canadian Tire One-and-Only account. At the end of the second quarter 2009, the retail banking business had more than $2.1 billion in deposits and approximately $167 million in mortgages. Canadian Tire's core credit card business has performed well in a difficult economic climate and the Company is confident about its prospects for new growth as the economy returns to health. Additional growth will be derived from an expanded suite of credit card products and related services.
"Our retail banking strategy has been successful and is meeting all of our internal financial targets," said Stephen Wetmore, President and CEO, Canadian Tire Corporation. "Market analysis is demonstrating that we will drive growth in financial services through a greater focus on expanded deposit products, new and innovative credit card products and related services. In order to maintain this focus, we will no longer offer mortgage products and are pleased to be working with National Bank, an organization that shares our passion for customer service, to ensure a smooth transition for our customers."
The mortgage portfolio will be sold at essentially the book value of the portfolio. In the fourth quarter Canadian Tire will record a pre-tax charge related to exiting the Bank's mortgage operations that is estimated to be $6 million.
"National Bank of Canada is delighted to acquire such a high quality portfolio of mortgage accounts," declared Réjean Lévesque, Executive Vice President, Personal and Commercial Banking, National Bank Financial Group. "We are looking forward to providing these new clients access to the best advice and the solutions most-suited to meet their financial needs and expectations. This latest acquisition is a good example of our strategy to expand in select markets in Canada," said Mr. Lévesque.
The mission of the Personal and Commercial segment is to offer the Bank's wide range of financial products and services to clients via its branches, service outlets and remote banking, as well as through a network of partners coast-to-coast.
Canadian Tire Corporation, Limited, operates more than 1,200 general merchandise and apparel retail stores and gas stations in an inter-related network of businesses engaged in retail, financial services and petroleum. Canadian Tire Retail, Canada's most shopped general merchandise retailer, with 475 stores operated by dealers across Canada offers a unique mix of products and services through three specialty categories in which the organization is the market leader - Automotive, Sports and Leisure, and Home Products. www.canadiantire.ca offers Canadians the opportunity to research more than 25,000 products online. PartSource is an automotive parts specialty chain with 86 stores designed to meet the needs of purchasers of automotive parts - professional automotive installers and serious do-it-yourselfers. Canadian Tire Petroleum is one of the country's largest and most productive independent retailers of gasoline, operating 273 gas bars, 266 convenience stores and kiosks, and 74 car washes. Mark's Work Wearhouse is one of the country's leading apparel retailers operating 372 stores in Canada. Under the Clothes that Work(TM) marketing strategy, Mark's sells apparel and footwear in work, work-related, casual and active-wear categories, as well as health-care and business-to-business apparel. www.marks.com offers Canadians the opportunity to shop for Mark's products online. Canadian Tire Financial Services has issued over 5 million Canadian Tire MasterCard credit cards and also markets related financial products and services for retail and petroleum customers. Canadians can also access Financial Services online at www.ctfs.com. More than 57,000 Canadians work across Canadian Tire's organization from coast-to-coast in the enterprise's retail, financial services, and petroleum businesses.
National Bank of Canada, which is celebrating its 150th anniversary in 2009, is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has close to $135 billion in assets and, together with its subsidiaries, employs 17,772 people. The Bank's securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank's website at www.nbc.ca.
SOURCE Canadian Tire Corporation, Limited
For further information: For further information: Media, Lisa Gibson, Canadian Tire, (416) 544-7655, firstname.lastname@example.org; Investors, Karen Meagher, Canadian Tire, (416) 480-8058, email@example.com; Denis Dubé, National Bank Financial Group, (514) 394-8644, Denis.firstname.lastname@example.org