TORONTO — CIBC is launching a new direct banking brand that will absorb some two million customer accounts currently with Loblaw-owned President’s Choice Financial.
Toronto-based CIBC (TSX:CM) has provided the back-end banking services for PC Financial for nearly 20 years but the companies said Wednesday they are going their separate ways.
The bank says its new Simplii Financial brand will provide no-fee daily banking through online, mobile and telephone channels in much the same way that that PC Financial has offered its roughly two million clients.
Loblaw’s President’s Choice Financial will continue to offer Mastercard credit card products and the PC Plus loyalty-points program.
The CEO of President’s Choice Financial says its customers are most interested in being able to make payments simply and the ability to get free groceries through points.
CIBC is promising a smooth transition for existing PC Financial clients with no changes to account numbers, mortgage terms or automatic payments and deposits.
As part of the bank’s agreement with Loblaw (TSX:L), CIBC will wind down PC Financial consumer banking and shift all clients over to the Simplii brand on Nov. 1.
CIBC did not disclose financial terms of the agreement with Loblaw, but said its fourth-quarter results would recognize $100 million in pre-tax fees and charges related to the deal.
CIBC’s Simplii will present a challenge to Scotiabank’s Tangerine direct banking brand, which it bought for $3.1…