Toronto-based Scotiabank has reached an agreement to acquire 20% shareholding in Canadian Tire’s banking business, in a deal valued at nearly C$500m ($459m), as part of its strategy to gain major portion of the country’s attractive credit-card market.

Canadian Tire, which provides banking, insurance and company-branded credit-cards through its financial-services division, said that the deal has been designed to grow retail and financial service businesses.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Additionally, the transaction will also deliver significant benefits to customers and facilitate closer collaboration to enhance customer affinity for both brands.

Under the terms of the agreement, Scotiabank will provide the retailer’s financial-services business with credit-card receivable financing of up to C$2.25bn.

The lender will also become the sole partner for new banking products for Canadian Tire customers, by building a joint marketing platform for the two companies.

The agreement also gives an option for Canadian Tire to divest up to 29% additional stake of its financial services business to Scotiabank within the next 10 years at the then fair market value.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Canadian Tire CEO Stephen Wetmore said, "The real strength of our partnership with Scotiabank lies in the opportunity it creates to benefit our retail customers and grow our business."

"By working together and innovating, we will better serve our customers, earn new business, and strengthen our community initiatives."

Canadian Tire’s financial services division is one of the largest credit card issuer in Canada with C$4.4bn receivables, 1.8 million active customer accounts, and C$12bn in annual spend volume.