Canadian Imperial Bank of Commerce will become the issuer of credit cards at Costco’s stores in Canada as the membership-only retail chain ends a previous deal with Capital One Financial.
CIBC said Thursday that it has reached a long-term agreement with Costco Wholesale that is expected to start early next year. The Toronto-based bank did not disclose the length of the contract or its financial terms. CIBC will also acquire from Capital One a portfolio of more than $ 3 billion in existing card balances.
CIBC says its new partnership with Costco reflects its desire to grow its Canadian consumer banking business.
For CIBC, which offers travel-related credit cards with Air Canada, the deal offers a way to attract consumers who are more interested in earning rewards for their spending on groceries and other household essentials. The bank said that the deal reflects a strategic focus on growing its Canadian consumer franchise.