CIBC and Citibank.

CIBC has recently announced that it’s purchased Citibank’s portfolio of credit cards here in Canada.  The purchase, expected to go thru as of October 31^st, is in line with an effort for CIBC to grow its Canadian core operations. 

As a holder of both Citibank and CIBC cards, I can’t help but wonder how I will be affected as a client of both banks.  I get that this effort is bringing the mass market consumer to CIBC – their current offering of mostly Infinite cards brings a higher end clientele – but as a financial professional, I fail to see the merit in the acquisition. 

RBC is the only other Canadian bank that has both Mastercard and Visa.  However, with the Citibank acquisition, it will make CIBC the largest bank to offer both and have the largest market share.  But have they thought about the implications? 

Let’s look at it realistically: The Citibank cards offer perks.  That’s one of their core value propositions.  I have the Citi Platinum Enrich, which offers 1% cash back, and I get a nice cheque in December for a little bit back on purchases I would’ve just made anyway.  Their Petro card gives points on gas, and their Citi Enrich gives cash back as well.  Their Sobeys card gives Club Sobeys points.  Perhaps here they may change it to Aeroplan points {as I currently do with any Sobeys points I get}, which would align that reward with their Aero cards.  How is CIBC going to be able to keep offering the same level of service, rewards, and extra benefits as Citibank when the two card selections are amalgamated to one bank? 

Perhaps the Citi Enrich Platinum will be converted to the CIBC Dividend Visa Infinite {ok, did a little research for that one!}.  This would be fine with me, as it gives 2% cash back.  However, it’s still not a Mastercard.  I like diversification in my limited credit card portfolio and another visa just won’t do it.

They may end up losing more customers who liked the diversity and the fact that Mastercard is accepted worldwide as well. 

What do you think?