Toronto-Dominion Bank on Tuesday said it would acquire Nordstrom
Inc.'s U.S. Visa and private-label consumer credit card portfolio
as part of a long-term deal to become the retailer's exclusive U.S.
credit card issuer.
The Seattle-based retailer's existing portfolio totals about
$2.2 billion in receivables. Terms of the purchase weren't
disclosed.
Toronto-based TD, Canada's second-largest bank by assets and the
10th-largest in the U.S., has also been expanding its market share
in credit cards in its home market in recent years. TD became
Canada's top credit card issuer in 2013 after Aimia Inc. made it
the primary issuer of new cards for the popular Aeroplan
travel-reward loyalty program. As part of that 10-year deal,
Canadian Imperial Bank of Commerce was obligated to sell about half
of its existing Aeroplan portfolio to TD.
The latest move allows Nordstrom to improve its capital
efficiency while retaining a close link with customers, the
companies said, adding it will be entitled to a "substantial
portion" of net revenue from the credit-card accounts. Nordstrom
will continue to do the account-servicing for the portfolio and to
fund and manage its loyalty programs and Nordstrom debit cards.
Nordstrom is currently assessing plans for the use of the
proceeds.
The deal is expected to close in the second half of 2015.
Rita Trichur contributed
Write to Carolyn King at carolyn.m.king@wsj.com
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