New agreement will significantly expand CIBC's credit card portfolio, and enable high quality growth through deeper client relationships
TORONTO, Sept. 2, 2021 /CNW/ - CIBC (TSX: CM) (NYSE: CM) announced today that it has signed a long-term agreement to become the exclusive issuer of Costco Mastercards in Canada, expected to start in early calendar year 2022.
CIBC will also acquire the existing Canadian Costco credit card portfolio, which meets the needs of millions of Canadians and has over $3 billion in outstanding balances. Mastercard will remain the exclusive payment network for the Costco cobranded credit card in Canada and acceptance in Costco warehouses in Canada.
Today's announcement reflects CIBC's strategic focus on growing its Canadian consumer franchise. The portfolio acquisition significantly grows and diversifies CIBC's credit card portfolio in the everyday rewards category, complementing the bank's strength in the travel rewards space. This agreement with Costco will provide an opportunity to deepen relationships with new clients from across Costco's large and growing member base.
"We are excited to partner with Costco, one of the best and most recognizable brands in Canada for providing unparalleled value, to enhance the rewards program and deliver even more value to their members," said Laura Dottori-Attanasio, Group Head, Personal and Business Banking, CIBC. "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."
Commitment to Costco members
The new CIBC Costco Mastercard will provide valuable rewards for shopping at all Canadian Costco warehouses and at Costco.ca, and will serve as the Costco membership card. It may also be used at merchants worldwide that accept Mastercard. Existing Capital One Costco Mastercard cardholders can continue to use their current card until receiving their new CIBC Costco Mastercard, expected to start in early calendar year 2022. Additional information regarding the card offering and program transition will be available in the coming months.
"As we look to the future needs of our members, we believe that CIBC is well positioned to help drive even more benefits of a Costco membership to Canadians," said Joe Portera, Executive Vice President/COO Eastern & Canadian Divisions, Chief Diversity Officer, Costco.
"Our members and CIBC clients expect us to deliver payment options that meet their needs. Through enhanced offerings such as leading digital capabilities, robust features and stronger rewards, our members will have even more ways to get the most out of their membership," said Pierre Riel, SVP Country Manager, Costco Canada.
"Mastercard has proudly served as the network of choice for Costco in Canada since 2014 and we're excited to renew our partnership with Costco and launch this new program with CIBC," said Sasha Krstic, president of Mastercard in Canada. "Together, we look forward to delivering the innovative loyalty, digital and next-generation payment solutions and valuable benefits that cardholders have come to expect with Mastercard and our partners."
CIBC expects the purchase of the current Costco co-brand credit card portfolio to close and convert to CIBC in early calendar year 2022, subject to customary closing conditions. CIBC will then begin issuing the new CIBC Costco Mastercard to the converted portfolio and take new applications both online and in Costco Canada warehouses.
"This investment furthers the positive momentum we have established as we execute our strategy, build deep and long-lasting relationships with our clients, and grow our business," added Ms. Dottori-Attanasio. "We're looking forward to welcoming Costco members to CIBC, and we're committed to providing a great client experience and earning more of their business through our expert advice and industry-leading solutions as we help make their ambitions a reality."
CIBC is a leading issuer of credit cards in Canada, with 30 years of co-brand experience including national deployments and providing support to retail locations. With its strong focus on innovation, CIBC offers its credit card clients unique features like the CIBC Virtual Assistant, a personalized Insights resource, and installment plans through CIBC Pace It.
More information on the CIBC Costco agreement can be found here.
CIBC is a leading North American financial institution with 10 million personal banking, business, public sector and institutional clients. Across Personal and Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC offers a full range of advice, solutions and services through its leading digital banking network, and locations across Canada with offices in the United States and around the world. More information on CIBC can be found at www.cibc.com and through ongoing news releases.
Costco Wholesale is a multi-billion dollar global retailer with warehouse club operations in eleven countries and operates 813 warehouses worldwide with 105 warehouses across Canada. Recognized as a retail leader, Costco is dedicated to bringing quality brand name merchandise at the best possible prices while being respected for its outstanding business ethics.
Costco Wholesale employs over 40,000 people in Canada with its Canadian head office located at 415 West Hunt Club Road in Ottawa. For more information on Costco, please visit www.Costco.ca.
About Mastercard (NYSE:MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
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About CIBC CIBC is a leading North American financial institution with 10 million personal banking, business, public sector and institutional clients. Across Personal and Small Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC...