TORONTO and MONTREAL, Oct. 14 /CNW/ -- Canadian Tire announced today that Canadian Tire Bank ("the Bank") will be expanding the availability of its successful retail and broker deposit products (high interest savings accounts, tax-free savings accounts and GICs) as part of a focused retail banking strategy that will also see the Bank sell its mortgage portfolio to the National Bank of Canada. The sale is expected to close in the fourth quarter 2009 and the transition of customer accounts will be completed by early 2010.

Launched in 2006, the Bank's retail banking products currently include high-interest savings accounts, GICs, tax-free savings accounts, mortgages and the Canadian Tire One-and-Only account. At the end of the second quarter 2009, the retail banking business had more than $2.1 billion in deposits and approximately $167 million in mortgages. Canadian Tire's core credit card business has performed well in a difficult economic climate and the Company is confident about its prospects for new growth as the economy returns to health. Additional growth will be derived from an expanded suite of credit card products and related services.

"Our retail banking strategy has been successful and is meeting all of our internal financial targets," said Stephen Wetmore, President and CEO, Canadian Tire Corporation. "Market analysis is demonstrating that we will drive growth in financial services through a greater focus on expanded deposit products, new and innovative credit card products and related services. In order to maintain this focus, we will no longer offer mortgage products and are pleased to be working with National Bank, an organization that shares our passion for customer service, to ensure a smooth transition for our customers."

The mortgage portfolio will be sold at essentially the book value of the portfolio. In the fourth quarter Canadian Tire will record a pre-tax charge related to exiting the Bank's mortgage operations that is estimated to be $6 million.

"National Bank of Canada is delighted to acquire such a high quality portfolio of mortgage accounts," declared Réjean Lévesque, Executive Vice President, Personal and Commercial Banking, National Bank Financial Group. "We are looking forward to providing these new clients access to the best advice and the solutions most-suited to meet their financial needs and expectations. This latest acquisition is a good example of our strategy to expand in select markets in Canada," said Mr.