Back to top

Analyst Blog

Zacks Equity Research

TD Bank Confirms Deal with Aimia

TD BAC CM

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The Toronto-Dominion Bank (TD - Snapshot Report), Canada’s second largest bank, declared its entry into a 10-year definitive agreement with Aimia Inc. , wherein TD Bank would become the key issuer of credit cards for Aeroplan, a loyalty program owned by the latter. The deal will take effect on January 1, 2014.

As per the agreement, TD Bank would offer a full suite of co-branded Aeroplan Visa credit cards to its customers that would give them various options to earn air miles. Moreover, the customers would be able to enjoy other features and advantages of the Aeroplan program that includes the benefits from Aeroplan’s new Distinction recognition program – to be launched in January 2014. Under this program, customers would be able to select any of the enhanced premium and mid-market co-branded Aeroplan credit cards. Further, each plan would provide distinct benefits and earn rates.

Additionally, it is anticipated that the new co-branded credit cards would include credit cards for U.S. residents as well as credit cards for small business owners in Canada.

Earlier in June, TD Bank had announced that it would replace Canadian Imperial Bank of Commerce “CIBC” (CM - Snapshot Report) as the issuer of the Aerogold card. However, CIBC and Aimia failed to reach an agreement to extend their 22-year partnership.

CIBC proposes to sell 50% of its Aerogold portfolio to TD Bank and intends to retain those Aerogold credit card accounts held by its customers who have a broader banking relationship with the bank. Moreover, CIBC intends to issue Aerogold cards to these customers for a minimum period of 10 years.

CIBC intends to legally challenge TD Bank’s deal with Aimia if it fails to reach an agreement with TD Bank by August 26. As per CIBC, TD Bank’s deal with Aimia is invalid since it does not conform to Aimia’s obligations toward CIBC, under the current credit card agreement, expiring on December 31, 2013. The agreement between CIBC and Aimia invalidates the first refusal right of the former and its ability to match.

TD Bank has been constantly expanding its credit card business. Earlier, in 2011, it purchased the MBNA Canadian credit card business from Bank of America Corporation (BAC - Analyst Report).

The TD Bank-Aimia deal is expected to be accretive to the top line of the former. Moreover, TD Bank anticipates the agreement to have a material impact on its 2015 earnings.  

TD Bank currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%