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Enhances TD's position as a leading North American credit card provider
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Offers more travel rewards choices for customers
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Will add significant growth to the premium travel segment of TD's credit
card portfolio
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Discussions are underway regarding current portfolio of Aeroplan credit
card accounts
TORONTO, Aug. 12, 2013 /CNW/ - TD Bank Group (TD) (TSX and NYSE: TD) and
Aimia Inc. (Aimia) (TSX: AIM) today announced that TD will become the
primary credit card issuer for Aeroplan, a loyalty program owned by
Aimia, starting on January 1, 2014.
New choices for customers
"We are thrilled to have this opportunity to work with Aeroplan to offer
even more choice to our customers, and to grow the premium travel
segment of our credit card portfolio," said Michael Rhodes, Executive
Vice President, North American Credit Cards and Merchant Services, TD
Bank Group. "The co-branded Aeroplan credit cards will complement TD's
already strong line-up of cards, and allow our customers to select from
an even wider range of options for earning great travel rewards."
Beginning in January 2014, TD will offer a full suite of co-branded
Aeroplan Visa credit cards, giving customers several ways to earn miles
for flights and enjoy other features and benefits of the Aeroplan
program, including benefits within Aeroplan's new Distinction
recognition program that launches in January. Customers will be able to
choose from enhanced premium, premium and mid-market co-branded
Aeroplan credit cards, each providing different benefits and earn
rates. It is expected that the new co-branded credit card line-up will
also include a credit card for U.S. residents and a credit card for
Canadian small business owners.
"The new suite of co-branded credit cards will bring together Aeroplan's
premier loyalty program with TD's award-winning customer service and
convenience to build on our position as a leading North American credit
card provider," added Rhodes. "We look forward to providing more
information about these cards in early 2014."
Ongoing Discussions
There are ongoing active discussions among TD, Aimia and CIBC about a
broad framework that would see CIBC retain cards held by their
franchise banking customers which are about half the portfolio and TD
acquire the remainder. The parties will work vigorously to try to reach
agreement, complete due diligence and finalize definitive documentation
by August 26, 2013. There can be no assurances that an agreement will
be reached.
TD previously advised that the Aeroplan arrangement would not have a
material impact on 2014 earnings and would make a solid contribution to
2015 earnings. TD does not expect a significant change in that outlook
as a result of the proposed deal but will provide additional disclosure
if an arrangement is reached.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Group (TD). TD is the sixth largest bank in North America by
branches and serves approximately 22 million customers in four key
businesses operating in a number of locations in key financial centres
around the globe: Canadian Personal and Commercial Banking, including
TD Canada Trust and TD Auto Finance Canada; Wealth and Insurance,
including TD Wealth, TD Direct Investing, an investment in TD
Ameritrade, and TD Insurance; U.S. Personal and Commercial Banking,
including TD Bank, America's Most Convenient Bank, and TD Auto Finance
U.S.; and Wholesale Banking, including TD Securities. TD also ranks
among the world's leading online financial services firms, with
approximately 8 million active online and mobile customers. TD had
CDN$826 billion in assets on April 30, 2013.The Toronto-Dominion Bank
trades under the symbol "TD" on the Toronto and New York Stock
Exchanges.
Caution Regarding Forward-Looking Statements
From time to time, TD makes written and/or oral forward-looking
statements, including in this press release, in other filings with
Canadian regulators or the U.S. Securities and Exchange Commission, and
in other communications. In addition, representatives of TD may make
forward-looking statements orally to analysts, investors, the media and
others. All such statements are made pursuant to the "safe harbour"
provisions of, and are intended to be forward-looking statements under,
applicable Canadian and U.S. securities legislation, including the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, statements regarding TD's
objectives and priorities for 2013 and beyond and strategies to achieve
them, and TD's anticipated financial performance. Forward-looking
statements are typically identified by words such as "will", "should",
"believe", "expect", "anticipate", "intend", "estimate", "plan", "may",
and "could".
By their very nature, these statements require TD to make assumptions
and are subject to inherent risks and uncertainties, general and
specific. Especially in light of the uncertainty related to the
financial, economic, political and regulatory environments, such risks
and uncertainties - many of which are beyond TD's control and the
effects of which can be difficult to predict - may cause actual results
to differ materially from the expectations expressed in the
forward-looking statements. Risk factors that could cause such
differences include: credit, market (including equity, commodity,
foreign exchange, and interest rate), liquidity, operational (including
technology), reputational, insurance, strategic, regulatory, legal,
environmental, and other risks, all of which are discussed in the
Management's Discussion and Analysis ("MD&A") in TD's 2012 Annual
Report and in the Second Quarter 2013 Report to Shareholders.
With regard to TD's agreement with Aimia pursuant to which TD will
become Aeroplan's primary credit card issuer, and the proposed
agreement with CIBC with respect to the purchase of part of the
existing card portfolio, there can be no assurance that TD will realize
the anticipated benefits or results due to a variety of factors,
including: CIBC and TD may not achieve a definitive agreement with
respect to the purchase of the existing card portfolio; the terms of a
definitive purchase agreement between TD and CIBC may be different than
what is currently contemplated and described; higher than anticipated
costs to launch the cards; higher than expected payment under mile
purchase commitment; lower than anticipated (i) interchange rates,
account origination, card usage or card spend, (ii) appeal or market
acceptance of Aeroplan's program, and/or (iii) yields (finance
charges/fees); industry competition; differences in the credit
performance and risk characteristics of the Aeroplan program relative
to TD's expectations; and changes in network rules, regulatory or legal
environment (including any litigation).
We caution that the preceding list is not exhaustive of all possible
risk factors and other factors could also adversely affect TD's
results. For additional information, please see the "Risk Factors and
Management" section of the 2012 MD&A. TD's material general economic
assumptions are set out in TD's 2012 Annual Report under the heading
"Economic Summary and Outlook" and for each of the business segments
under the heading "Business Outlook and Focus for 2013" and in TD's
Second Quarter 2013 Report to Shareholders under the headings "Business
Outlook."
All such factors should be considered carefully, as well as other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements, when making decisions with respect to TD
and we caution readers not to place undue reliance on TD's
forward-looking statements.
Any forward-looking statements contained in this press release represent
the views of management only as of the date hereof and are presented
for the purpose of assisting TD's shareholders and analysts in
understanding TD's objectives and priorities and anticipated financial
performance as at and for the periods ended on the dates presented, and
may not be appropriate for other purposes. TD does not undertake to
update any forward-looking statements, whether written or oral, that
may be made from time to time by or on its behalf, except as required
under applicable securities legislation.
SOURCE TD Bank Group
