Canadian Credit Card Issuer Buys Diners Club from Citibank

Officials at Citibank announced the sale of the Diners Club brand and associated accounts to a division of a fast-growing, Canadian credit card issuer. BMO Financial Group, a unit of the Bank of Montreal, will use the acquisition to double its corporate credit card portfolio while gaining a significant foothold in the American business credit market.

Because Diners Club cardholders typically use their accounts to manage business expenses, the portfolio carries a far higher ratio of transactions to receivables than most other credit card brands. According to company press releases, BMO gains a debt portfolio of about $1 billion in the transaction. However, Citibank disclosed that Diners Card users made nearly $8 billion in transactions over the past year.

Diners Club was one of the very first charge cards targeted at business travel and entertainment customers. The classic brand helped pioneer the use of credit card rewards, including affinity and loyalty programs with hotels and airlines. BMO officials remarked that Citibank will continue to maintain customer accounts during the acquisition, with BMO taking over account maintenance and reward program management over the next year.