CIBC Has C$6 Billion of Aerogold Card Loans as TD Talks Continue

Canadian Imperial Bank of Commerce has about C$6 billion ($5.7 billion) of outstanding receivables for its CIBC branded Aerogold Visa credit cards, part of which may be sold to Toronto-Dominion Bank. (TD)

The Aerogold card portfolio generated approximately 95 cents of earnings per share for the 12 months ended July 31, Toronto-based Canadian Imperial said today in a statement. CIBC wants to keep half of the portfolio, primarily cardholders that are also bank customers, as it negotiates a deal with Toronto-Dominion and loyalty program operator Aimia Inc. (AIM), the bank said.

“CIBC continues to be in discussions on a potential agreement with TD and Aimia that will allow both CIBC and TD to offer clients access to the Aeroplan travel rewards program,” Chief Executive Officer Gerald McCaughey, 57, said in a conference call with analysts.

Canadian Imperial has been in talks to sell part of the credit-card portfolio since Aug. 12, when Toronto-Dominion was chosen as the primary card partner of Montreal-based Aimia. The lenders had set Aug. 26 as a deadline for reaching an agreement.

CIBC was the country’s largest credit-card issuer last year with C$15.5 billion of outstanding balances, followed by Toronto-Dominion with about C$15.4 billion, according to an April issue of the Nilson Report, a credit-card industry newsletter.

The lender’s two-decade partnership with Aimia made the CIBC Aerogold Visa its most popular card. The bank buys Aeroplan miles from Aimia to give to cardholders on purchases, including flights with Air Canada (AC/B), the country’s biggest carrier.

Canadian Imperial retains its rights to pursue legal options if it’s unable to reach a deal with Toronto-Dominion and Aimia, the company said today. Canada’s fifth-biggest lender said it will offer an enhanced travel card “over the coming months.”

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; David Scanlan at dscanlan@bloomberg.net

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