CIBC launches Simplii brand
Scraps its long-standing partnership with President’s Choice Financial
TORONTO — The Canadian Imperial Bank of Commerce and grocery chain Loblaw Cos. are ending their 19-year President’s Choice Financial partnership as the country’s fifth-largest lender starts its own digital bank.
Simplii Financial will offer nofee banking, mortgages and loans online and by phone, said Mike Boluch, CIBC’s executive vicepresident of direct banking, innovation and payments.
President’s Choice Financial was one of Canada’s first digital banks, offering services online and at grocery-store kiosks since 1998, and now has about 2 million customers.
Clients with President’s Choice Financial products provided by CIBC will be moved to Simplii Financial effective Nov. 1, the bank said. There’ll be no changes to PC Financial Mastercard products since they’re offered by Loblaw’s bank unit.
“It’s something we’ve been contemplating for some time,” Boluch said in a phone interview. “We mutually decided it was time for us to move forward in a different direction.”
Loblaw’s President’s Choice Bank said in a separate statement that it’s committed to a “smooth and seamless transition” with CIBC for the banking products migrating to the new branding, and will focus on payment and loyalty programs through its Mastercard products and PC Plus rewards plan.
“When we ask our customers what they value most, they tell us they appreciate the ability to make payments simply and put free groceries on the kitchen table,” said Barry Columb, chief executive officer of President’s Choice Financial. “That remains our focus.”
CIBC’s Boluch said Simplii Financial will offer straightforward, no-fee banking with “great interest rates” for customers who prefer making transactions by telephone or online, while also including free access to CIBC automated teller machines.
“There’s certainly a business model out there that clients appreciate and want, and this allows us to serve those who really value nofee daily banking and great rates,” Boluch said. “That’s why we chose to go this route.”
Simplii Financial will compete with Bank of Nova Scotia’s online lender, Tangerine Bank, which it bought from ING Groep in 2012, as well as smaller firms including Canadian Western Bank’s Motive Financial, Desjardins Group’s Zag Bank and Equitable Group’s EQ Bank, which started in January 2016.
“Direct banking is a growing channel for clients, and Simplii we expect will be a strong competitor in this space,” Boluch said.
CIBC expects to recognize $100 million of fees and charges before tax in the quarter ending Oct. 31 related to the transaction, the Toronto-based bank said Wednesday in a statement.