Scotiabank to buy JPMorgan's Sears Canada credit card portfolio

Thu Oct 15, 2015 1:38pm EDT
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(Reuters) - Bank of Nova Scotia (BNS.TO: Quote) said it would buy JPMorgan & Chase Co's (JPM.N: Quote) Canadian credit card portfolio associated with Sears Canada Inc (SCC.TO: Quote), a month ahead of the expiry of the servicing agreement by the U.S. bank.

JPMorgan said in November last year that it served the retailer with a notice of non-renewal to prevent the agreement, which expires Nov. 15, 2015, from auto-renewing.

Scotiabank said on Thursday that it will buy JPMorgan's MasterCard and private label credit card portfolio, which has about C$1.7 billion ($1.32 billion) in receivables and 2 million active customer accounts.

The deal, which will add to Scotiabank's earnings in the first year, will impact the company's common equity tier-one capital ratio by less than 10 basis points, the company said.

JPMorgan had purchased the credit card receivables business in 2005, enabling Sears Canada to pay out a special dividend to investors that year.

The deal is the latest for Scotiabank, which signed agreements last year to buy a majority stake in retailer Cencosud SA's CEN.SN retail credit card business in Chile and Citigroup Inc's (C.N: Quote) retail and commercial banking operations in Peru.

($1 = 1.2862 Canadian dollars)

(Reporting By Sudarshan Varadhan and Amrutha Gayathri in Bengaluru; Editing by Don Sebastian)