Retailer Canadian Tire to sell mortgage portfolio to National Bank

By The Canadian Press

TORONTO - Canadian Tire (TSX: CTC.TO) said Wednesday that it will sell its mortgage portfolio to National Bank of Canada (TSX: NA.TO) and focus its banking business on its high interest savings accounts, tax-free savings accounts and guaranteed investment certificates.

The retailer said the mortgage business will be sold at essentially the book value of the portfolio and it expects to take a $6-million pre-tax charge in its fourth quarter related to exiting the mortgage business.

At the end of the second quarter 2009, Canadian Tire's retail banking business had more than $2.1 billion in deposits and approximately $167 million in mortgages.

"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," Canadian Tire president and chief executive Stephen Wetmore said in a statement.

"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."

Canadian Tire has more than 1,200 stores and gas stations across the country.