Come November, more than two million customers will have to wave goodbye to President’s Choice Financial banking. After 19 years, Loblaw Companies Ltd. and CIBC have ended their banking partnership, and existing accounts will be moved to CIBC’s new digital banking brand, Simplii Financial, as of November 1.
Loblaw and CIBC say that it was a mutual choice to end the partnership. “It was a mutual decision that we feel good about, and gives both of us more control and greater flexibility going forward,” according to Mike Boluch, CIBC’s executive vice-president of direct banking. Boluch added that CIBC’s fourth-quarter results will recognize $100 million in pre-tax fees and charges related to this deal. In a statement on Wednesday, Barry Columb, president and chief executive of President’s Choice Financial, said, “We are excited about the future and our ability to create new products to serve Canadians.”
Unlike President’s Choice Financial, which has physical locations in Loblaws grocery stores, Simplii will be almost exclusively digital, with banking conducted online, via smartphones, and through call centres. However, customers will have the same mortgage terms and conditions and daily no-fee banking and interest rates as they did with President’s Choice. Customers will also keep points they have accrued via Loblaw’s PC Plus loyalty program, though after October 31 they will no longer be able to use their debit cards to earn more, and will retain no-fee access to CIBC ATMs. President’s Choice Financial will keep the PC Financial MasterCard credit card service and the PC Plus loyalty program.
Apart from the removal of President’s Choice Financial-branded ATMs and service locations, the transition seems mostly like a name change as of now. It’s not yet clear how re-branding will affect CIBC, or whether or not Simplii will be able to attract new customers. However, should customers be dissatisfied with the new brand’s service, there are not many financial institutions with similar offerings. Apart from Tangerine’s no-fee daily chequing option, no-fee accounts in Canada’s banking industry are few and far between outside of credit unions.
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