PC Financial customers transferring to new CIBC bank brand
Grocery store chain gets out of daily banking, but maintains MasterCard products
The Canadian Press
CIBC is launching a direct banking brand that will also absorb accounts currently with Loblaw-owned President's Choice Financial.
The bank said its new Simplii Financial brand would provide no-fee daily banking through online, mobile and telephone channels in much the same way PC Financial already offers its roughly two million clients.
CIBC has provided the back-end banking services for PC Financial for nearly 20 years.
PC Financial MasterCard products, which Loblaw has admistered rather than CIBC, aren't affected by the deal.
CIBC is promising a smooth transition for existing PC Financial clients with no changes to account numbers, mortgage terms or automatic payments and deposits. CIBC will shift all PF Financial clients over to the Simplii brand on Nov. 1.
CIBC did not disclose financial terms of the agreement with Loblaw, but said its fourth-quarter results would recognize $100 million in pre-tax fees and charges related to the deal.
CIBC's Simplii will present a challenge to Scotiabank's Tangerine direct banking brand, which it bought for $3.1 billion in 2012 when it was known as ING Direct.
Mike Boluch, executive vice-president of direct banking at CIBC, said the bank planned to invest more in Simplii's offerings over time.
"Our focus in the near-term is to make this a seamless transition over for our clients. Over time, we're going to invest in the offer. We at CIBC have a long history of being known for innovation."
The new division will provide more options for the full range of client needs, from no-fee online banking to more advice-oriented customer service, Boluch said in an interview before the official announcement.
"We see a wide spectrum of client needs, and we see this as being an important part of that spectrum," Boluch said. "We're pretty confident there's a place for both business models."