President’s Choice is getting out of the daily banking business and more than two million current PC Financial customers are moving to CIBC, which will rebrand the bank as Simplii.
The two companies announced the end of their almost 20-year collaboration on Wednesday, as Loblaw says it will retain its loyalty point program and MasterCard-branded credit card program, while all daily chequing, savings, lending and other banking services will move to CIBC, which has been running the back end of the bank’s operations behind the scenes since it launched.
The bank promises a seamless transition with no changes to account numbers or pre-existing automatic payment and savings plans while it absorbs more than 2 million PC customers between now and November.
“We are excited about the future and our ability to create new products to serve Canadians,” PC Financial spokesperson Lana Gogas said in a statement. “Today marks the start of an exciting new chapter for PC Financial, including continued strength in payments and loyalty through our PC Financial Mastercard products.”
What’s left of Loblaw’s banking division — the corporate title of which is President’s Choice Bank — is a registered Schedule I Bank under the Bank Act, which means it is legally allowed to conduct banking services such as taking deposits and offering loans. But as of November 1, it will no longer be doing so.
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Although new products are in development, PC says it plans to focus on its popular loyalty program to “to further improve our customer experience.”
CIBC says the hundreds of PC Financial kiosks and automated banking machines in Loblaw-owned stores across the country will be closed down between Nov. 1 and March 31. Financial terms of the deal were not disclosed, but the bank said it would take a $100-million charge in its next quarterly earnings related to the deal.
Currently, bank machines inside Loblaw stores are branded as PC but provided by CIBC. Those machines will be removed and replaced with new bank machines owned by PC, and CIBC customers will pay a fee to use them — the same way they would pay a fee to use an ATM to owned by anyone other than CIBC.
Story Credit: CBC
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