Scotiabank to Buy $1.3 Billion of JPMorgan Canada Card LoansDoug Alexander
Bank of Nova Scotia agreed to buy C$1.7 billion ($1.3 billion) in Canadian credit-card receivables from JPMorgan Chase & Co., including those tied to Sears Canada Inc.
The deal for the MasterCard Inc. and private-label card portfolio includes about 2 million customers, Toronto-based Scotiabank said Thursday in a statement that didn’t disclose terms.
Chief Executive Officer Brian Porter made expanding Scotiabank’s credit-card business a priority last year, and struck a deal with Canadian Tire Corp. to buy a 20 percent stake in the retailer’s financial-services business. Scotiabank, the country’s third-largest credit-card issuer, has used partnerships with theater-chain owner Cineplex Inc. and the National Hockey League to attract customers.
The JPMorgan deal “is in line with our strategy to grow Scotiabank’s payments business, including credit cards, while providing our shareholders with attractive risk-adjusted returns,” James O’Sullivan, group head of Canadian banking, said in the statement.
The transaction includes the acquisition of JPMorgan’s credit-card operations in Canada, including a call center in Ottawa.
The transaction isn’t financially material to either bank and Scotiabank’s regulatory capital ratio will be affected by less than 10 basis points, according to the statement. Scotiabank said the acquisition will add to earnings in the first year.
An agreement between New York-based JPMorgan and Sears Canada ends Nov. 15, according to the statement.