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BMO buys Diners Club from Citigroup

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Toronto — Globe and Mail Update Published on Tuesday, Nov. 24, 2009 6:45AM EST Last updated on Tuesday, Nov. 24, 2009 7:49AM EST

Bank of Montreal (BMO-T53.55-0.32-0.59%) is buying the Diners Club North American franchise from Citigroup (C-N4.280.081.90%) , an acquisition that will double the size of the Canadian bank's corporate credit card business.

A purchase price for the deal was not disclosed, suggesting that the cost is not material to BMO, but the bank said the agreement represents net credit card receivables of nearly $1-billion (U.S.).

“This acquisition will immediately enhance our competitive position by placing us among the top commercial card issuers in North America,” Frank Techar, the head of BMO's personal and commercial banking business, said in a press release.

The deal gives BMO exclusive rights to issue Diners cards in the U.S. and Canada. Citigroup said the sale, which should close by the end of March, is not expected to have a material impact on its profit or capital ratios.

BMO said the Diners Club card business fits well with its existing commercial card business, adding that commercial cards are one of the fastest growing segments in the credit card business. That should continue if business travel rebounds as expected in the next two years.

Tuesday, BMO was the first bank out of the gate with its fourth-quarter profit. It earned $647-million, up $87-million or 16 per cent from a year ago.

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I hope they don't screw with the benefits this card provides.

A little bit of history for the Canadian version of the diners card. It was originally the Air Canada en route card,which was very exclusive at the time, then diners en route when AC sold it, and then what it is now.

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I agree. I have one which is co-branded with Mastercard. I hope the benefits aren't diminished. It would actually be nice if they improved them i.e. transfer to BA at 1 to 1 as opposed to 1250 for 1000 miles, the same as Avion Visa to BA.

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Guess I'll now have two BMO Mastercards. Good news for Noah Vail in that it brings BMO back into the free Priority Pass program (albeit not the unlimited use version). Makes for an interesting expansion by BMO into the US credit card market beyond the Harris Bank umbrella.

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Surprising that they didn't buy the whole thing......as Diners is still alive and well out in Asia!

That's exactly why. The NAmerican franchise was going cheap by CitiBank and thus worth it for BMO to pick up. The international operation would be too costly to acquire, and in fact may not have been up for sale.

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Surprising that they didn't buy the whole thing......as Diners is still alive and well out in Asia!

That's exactly why. The NAmerican franchise was going cheap by CitiBank and thus worth it for BMO to pick up. The international operation would be too costly to acquire, and in fact may not have been up for sale.

Actually answered my own question by reading about it and the Citigroup asset sale.......they chose to sell off piece meal a la NT.

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After reading about this here I called last week and cancelled my Diners card, BMO will never get another penny from me. I will keep using my CIBC card as long as I am SE, and look forward to hearing what the new Spg offering will be.

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