Scotiabank buys Canada credit card portfolio from JPMorgan Chase, includes Sears

J.P. Morgan Chase (AP / Mark Lennihan)

TORONTO -- The Bank of Nova Scotia is buying the Canadian credit-card portfolio of JPMorgan Chase Bank.

Financial terms of the transaction, which includes $1.7 billion in receivables and two million active customer accounts, were not disclosed.

However, officials said the price was not financially material to either bank -- and Scotiabank said the deal would begin adding to profits after a year.

Under the deal, Scotiabank (TSX:BNS) will acquire a MasterCard and a private label credit card portfolio currently associated with Sears Canada Inc. (TSX:SCC).

It also includes JPMorgan's related credit-card operations in Canada, including its bilingual call centre in Ottawa with expertise in customer service, fraud, collections and recovery.

The current agreement between JPMorgan Chase and Sears Canada is scheduled to end Nov. 15 and Scotiabank says it will ensure a smooth transition for all customers.

"This transaction is in line with our strategy to grow Scotiabank's payments business, including credit cards, while providing our shareholders with attractive risk adjusted returns," said James O'Sullivan, group head of Canadian Banking at Scotiabank.

O'Sullivan noted that after closing, Scotiabank will become the first bank in Canada to offer all three leading credit cards: Visa, AMEX and MasterCard.