TORONTO, Dec. 27, 2013 /CNW/ - CIBC (TSX: CM) (NYSE: CM) announced today it has completed the transactions
with Aimia and TD Bank Group that were announced on September 16, 2013.
CIBC has sold approximately 50 per cent of its existing Aerogold VISA
portfolio, consisting primarily of credit card-only customers, to TD
Bank Group. Consistent with CIBC's strategy to invest in and deepen
client relationships, CIBC has retained the Aerogold VISA credit card
accounts held by clients with broader banking relationships at CIBC. In
connection with today's sale, CIBC and Aimia have entered into a
10-year agreement under which CIBC will continue to be an issuer of
Aeroplan related travel credit cards and CIBC Aerogold clients will
benefit from Aeroplan's enhanced rewards program.
As consideration for the sale, CIBC has received approximately $3.5
billion, representing the amount of the credit card receivables from
the sold portfolio (being approximately $3.3 billion) plus $200
million, of which $50 million was paid by TD Bank Group and the balance
was paid by Aimia. In addition, CIBC will receive payments from TD
Bank Group of approximately $37.5 million per year in each of the next
three years.
The closing of the transaction does not trigger any immediate changes
for existing cardholders.
Current CIBC Aerogold Visa cardholders will receive a letter from CIBC
informing them whether their credit card account will remain with CIBC
or will be transitioning to TD. Under the interim servicing agreement
between TD and CIBC, cardholders transitioning to TD will continue to
earn Aeroplan Miles on purchases and will continue to be serviced by
CIBC until new TD cards are issued. All Aeroplan Miles reside in a
member's Aeroplan account and are not impacted by any change to their
credit card.
CIBC will offer a new suite of Aeroplan co-branded credit cards,
providing members with great earning opportunities through the Aeroplan
program, plus the same Air Canada benefits on select card products.
These are in addition to the benefits that will be available under
Aeroplan's Distinction member recognition program that offers exclusive
flight rewards, bonus mile offers, preferential treatment and
privileges.
CIBC Aerogold Cardholders can access more information at www.cibc.com/aeroplan or call 1-855-366-8501.
A NOTE ABOUT FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the
meaning of securities laws in Canada and the United States. These
statements include, but are not limited to, statements about closing
conditions, requirement for regulatory approval, our operations, cards
business, financial condition, annual earnings impact, risk management,
ongoing objectives, strategies and outlook. Forward-looking statements
are subject to inherent risks and uncertainties that may be general or
specific. A variety of factors, many of which are beyond our control,
could cause actual results to differ materially from the expectations
expressed in any of our forward-looking statements including, higher
than anticipated costs to launch an enhanced proprietary travel card;
lower than anticipated interchange rates and card usage; industry
competition; changes in network rules; credit and market risks; changes
in market rates and prices; and our ability to anticipate and manage
the risks associated with these factors. We do not undertake to update
any forward-looking statement except as required by law.
About CIBC
CIBC is a leading North American financial institution with more than 11
million personal banking and business clients. CIBC offers a full range
of products and services through its comprehensive electronic banking
network, branches and offices across Canada, and has offices in the
United States and around the world. You can find other news releases
and information about CIBC in our Media Centre on our corporate website
at www.cibc.com.
SOURCE CIBC
