Pacific & Western's entry into consumer credit market profitably diversifies Bank's asset base and revenue streams
LONDON, ON, July 23, 2012 /CNW/ - Pacific & Western Bank of Canada is proud to announce the first anniversary of the signing of the agreement in July 2011 to provide financing, credit services and a wide range of consumer support functions for the Home Credit Card, Home Hardware Stores Limited's private label credit card.
Since January 2, 2012, Pacific & Western Bank has acted as the issuing bank for the Home Credit Card, providing a broad spectrum of support services including application processing, card production, transaction processing, statement preparation, and call centre support for retailers and customers. These services were previously provided by a leading U.S. bank.
The Bank's first venture into consumer finance, the Home Hardware credit card has been a highly successful addition to Pacific & Western's product line, which previously focused on commercial lending. The initiative has diversified the Bank's asset base and, in addition, generated a significant new revenue stream. As Home Hardware is Canada's largest independent home improvement retailer, the card is available for use at nearly 1,100 stores across the country. The consumer card portfolio enjoys above average credit quality. The majority of cardholders are homeowners.
"We are delighted to have partnered with Home Hardware, one of Canada's best known coast-to-coast brands, on the Home Credit Card," said David Taylor, President & CEO of Pacific & Western Bank. "To celebrate our inaugural consumer credit initiative, we are pleased to 'give back' a donation directly to the new Durham Region 'Abilities Centre'* with each new Home Credit Card account opened, as we announced at the facility's recent official opening and before a host of dignitaries, including the Hon. Jim Flaherty, Canada's Minister of Finance. We are very excited about the significant growth potential that this partnership brings. Providing this financial service to Home Hardware's vast Canadian customer base is something to which we are fully committed."
The Pacific & Western Bank and Home Hardware partnership is a unique business story, bringing together two proud Canadian companies, as a true "Made in Canada" success. Private label credit cards are becoming increasingly popular and, until now, they have been offered exclusively by Canada's "Big Five" banks, with major international financial institutions also playing a prominent role in the Canadian market.
To support the venture, Pacific & Western Bank invested in infrastructure that can underpin other potential consumer credit initiatives, including non-competing private-label cards and/or bankcard credit cards such as MasterCard or Visa. While the recent recession had a negative impact on the retail economy, and some major card service providers have exited the market, a recent U.S. research publication predicts growth in the sector at a compound rate of 4.5% between 2010 and 2015.**
For retailers such as Home Hardware, private label cards allow them to provide consumers with in-store financing solutions that help them realize their home improvement goals.
"Home Credit Card is a fantastic tool for our customers, It has a direct impact on sales as it is often a key determining factor when a client makes the decision to buy from us rather than going to our competition," said Pierre Lane, Home Hardware Building Centre Dealer of Rawdon, QC. "The service from Pacific & Western Bank has been very good, and our customers have been very pleased with their experiences. We really enjoy working with our new Canadian partner."
"Home Credit Card has been operational with Pacific & Western Bank since the beginning of 2012, and we are very pleased with results to date," said Paul Straus, President and CEO, Home Hardware Stores Ltd. "Pacific & Western Bank has proven to be a valued and dedicated partner, with a strong focus on customer service - ours and our retail cardholders - that has exceeded our expectations."
* The Oshawa-located Abilities Centre serves families and individuals in a geographical area from Toronto to Belleville. www.abilitiescentre.org
** MarketResearch.com, "Private Label Credit Cards in the U.S., 7th Edition."
Pacific & Western Bank of Canada is wholly owned by Pacific & Western Credit Corp., whose shares trade on the TSX under the symbol PWC.
About Home Hardware Stores Limited
100% Canadian owned and operated, Home Hardware Stores Limited has a presence in every Canadian province and territory and is the country's largest independent, Dealer-owned hardware, lumber, building materials and furniture cooperative. Founded on January 1, 1964 by 122 independent hardware Dealers, the cooperative now includes more than 1,080 stores, under the Home Hardware, Home Building Centre, Home Hardware Building Centre and Home Furniture banners, with annual collective retail sales of more than $5 billion. Home Hardware's independent Dealer-Owners, recognized by the North American Retail Hardware Association as Canada's best-trained Dealer group, have access to 100,000 quality brand name and private label products, a world-class distribution system and draw upon the power of Home Hardware's network to provide their local communities with top quality products and services at competitive prices.
Image with caption: "From Left to Right: Christine Elliott, MPP, Whitby-Oshawa; David Taylor, President & CEO, Pacific & Western Bank of Canada; Hon. Jim Flaherty, Federal Minister of Finance; Paul Straus, President & CEO, Home Hardware Stores Limited (CNW Group/Pacific & Western Credit Corp.)". Image available at: http://photos.newswire.ca/images/download/20120723_C9972_PHOTO_EN_16384.jpg
SOURCE: Pacific & Western Credit Corp.
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