Canadian Tire Bank will expand the availability of its successful retail and broker deposit products as part of a focused retail banking strategy that will also see the bank sell its mortgage portfolio to National Bank of Canada, Canadian Tire Corp. said Wednesday.

The sale is expected to close in the fourth quarter 2009 and the transition of customer accounts will be completed by early 2010, Canadian Tire says.

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.

“Our retail banking strategy has been successful and is meeting all of our internal financial targets,” explains Stephen Wetmore, president and CEO, Canadian Tire Corp. “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,” Wetmore says.

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,” says Réjean Lévesque, executive vice president, personal and commercial banking, National Bank Financial Group.

“This latest acquisition is a good example of our strategy to expand in select markets in Canada,” Lévesque says.

IE