What the CIBC-PC Financial break-up means for you

Loblaw Co. is quitting the banking business in a deal that will see two million PC Financial mortgage and banking accounts automatically move to a new low-fee banking brand operated by CIBC, called Simplii Financial.

The deal is effective November 1 and ends a 19-year partnership between Loblaw and CIBC that ran PC Financial. Loblaw will maintain its PC Points program and continue to offer a MasterCard credit card aligned with PC Points. Here is what this news means for you.

What happens to my PC Points?

PC Financial MasterCard products remain unchanged. President’s Choice Financial said it will continue to focus on payments and loyalty through its MasterCard and PC Plus Products.

If you move to Simplii, you will no longer automatically accumulate PC Points by using your banking services after October 31. But anyone can still sign up for a PC Points account or use the app to gather points. Additional points can be collected with the PC Financial MasterCard. The points are redeemable for free groceries.

What about banking services?

Banking services at in-store pavilions and ATMs operated by CIBC will be phased out of Loblaws and partner grocery stores between Nov. 1, 2017 and March 31, 2018. The PC Financial brand of consumer banking services will disappear.

What happens if you are a current PC Financial client?

Whether you have a savings or chequing account, an RRSP, a loan, or are a mortgage holder, you will be transferred to CIBC’s new digital bank. Account numbers stay the same. CIBC will send you a new debit card which won’t be affiliated with PC Points. Simplii customers will have the same no-fee daily banking and interest rates as under PC Financial. Likewise, terms and conditions of mortgages will remain unchanged.

Why is this happening?

The bank is looking to build Simplii Financial to take more control over its low-fee brand strategy. Simplii’s key target will be clients who prefer low-fee accounts and user-friendly online services.

While the branding and points program of PC Financial were tied to Loblaw, CIBC has always run the actual back-end banking operations. CIBC expects to incur fees and charges of about $100 million pre-tax in the current quarter ending October 31 because of the switch.

For Loblaw, the priority has always been the PC Points program, and by holding onto the credit card deal with MasterCard it will retain that high-margin lending business.

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