UPDATE 3-TD Bank, CIBC reach deal on Aeroplan Visa card

Mon Sep 16, 2013 4:11pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* TD to pay C$162.5 mln to acquire CIBC portfolio

* To add 10 Can cts/shr on adjusted basis to TD 2014 profit

* To cut CIBC annual profit by 45 Can cts/shr ongoing basis

* Aimia shares reach highest since April 2008

By Cameron French

Sept 16 (Reuters) - Toronto-Dominion Bank agreed on Monday to buy about half of Canadian Imperial Bank of Commerce's Aeroplan Visa credit card portfolio in a deal that will see both banks issue the popular and lucrative rewards card.

The agreement, which drove shares of Aeroplan loyalty program operator Aimia to a five-year high, averts a potential legal battle between the two banks and also eliminates uncertainty over the future of the card that could have seen customers flee to other banks.

"It's safe to say that TD is the winner from this (of the two banks)," said Gavin Graham, chief strategy officer at Integris Pension Management Corp.

TD, Canada's second-largest bank, will pay C$162.5 million ($157.59 million) to CIBC to acquire about 550,000 cardholder accounts, representing about C$3 billion in card balances and C$20 billion in annual retail spending, TD said. It will also become the card's primary issuer.   Continued...