Aeroplan
Re: Aeroplan
@ Adrian2: Not at all. Market cap is equal to the total common equity value of an enterprise. In round numbers TD is worth about $80 billion while CIBC is worth about $30 billion. These figures are public, easily obtained, and thus well known.
Going back 30 or more years CIBC was the second largest bank with a market cap approaching RY. In the late 90's TD's market cap increased rapidly due to the Internet craze and particularly TD Waterhouse which had pioneered Internet brokerage in the US. At the time of the proposed mergers in early 1998 CIBC was slightly larger than TD but that was before the CIBC made several mistakes (Enron, mortgage CDS's, etc) that culminated in their CEO getting fired and the adoption of a much less risky strategy. TD, on the other hand, mostly avoided these problems and greatly expanded it's business into the US. The market seems to have judged TD's the more investor friendly approach, at least so far.
Going back 30 or more years CIBC was the second largest bank with a market cap approaching RY. In the late 90's TD's market cap increased rapidly due to the Internet craze and particularly TD Waterhouse which had pioneered Internet brokerage in the US. At the time of the proposed mergers in early 1998 CIBC was slightly larger than TD but that was before the CIBC made several mistakes (Enron, mortgage CDS's, etc) that culminated in their CEO getting fired and the adoption of a much less risky strategy. TD, on the other hand, mostly avoided these problems and greatly expanded it's business into the US. The market seems to have judged TD's the more investor friendly approach, at least so far.
Last edited by SQRT on 15 Aug 2013 08:30, edited 1 time in total.
- bcjmmac
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Re: Aeroplan
Maybe slightly off topic, but has anyone else had issues using their Maple Leaf Club Worldwide card? I was initially refused entry into the Ethiopian Cloud 9 lounge in Addis Ababa, which is a Star Alliance member, but talked my way in (travelling on Ethiopian today). Card is supposed to be good for any Star Alliance lounge - card is one of the benefits I picked for 35K status since I travel to Africa for work.
Re: Aeroplan
I've been in Canada for the past 19 years, so some of the data / standings you speak of is new to me.SQRT wrote:@ Adrian2: Not at all. Market cap is equal to the total common equity value of an enterprise. In round numbers TD is worth about $70 billion while CIBC is worth about $30 billion. These figures are public, easily obtained, and thus well known.
Going back 30 or more years CIBC was the second largest bank with a market cap approaching RY.
Don't forget TD has merged with Canada Trust in the late 90's, while CIBC stood still.
CIBC and TD are the only banks I own - CIBC is my first stock bought, and I still happily hold to the original shares, plus more.SQRT wrote:CIBC is the only bank I don't own.
finiki, the Canadian financial wiki
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]
- Bylo Selhi
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Re: Aeroplan
Both CIBC and TD are themselves the products of series of bank mergers, most importantly, on June 1, 1961, the Canadian Imperial Bank of Commerce was formed through the merger of the Canadian Bank of Commerce and the Imperial Bank of Canada and on February 1, 1955, the Bank of Toronto and the Dominion Bank became the Toronto-Dominion Bank.adrian2 wrote:I've been in Canada for the past 19 years, so some of the data / standings you speak of is new to me.
Don't forget TD has merged with Canada Trust in the late 90's, while CIBC stood still.
The other big-5 banks are themselves products of mergers going back to the 19th century. A more interesting question is if going forward Paul Martin's word on big-5 bank mergers will be final.
P.S. If you look carefully when you pass old bank buildings on the main streets of urban Canada you'll some with the names of the original banks still engraved in the stonework.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
Re: Aeroplan
I walked by the Bank of Toronto at Guy and St. Catherine in Montreal just last week!Bylo Selhi wrote:P.S. If you look carefully when you pass old bank buildings on the main streets of urban Canada you'll some with the names of the original banks still engraved in the stonework.
Re: Aeroplan
Did ya fall in the hole?DavidR wrote:I walked by the Bank of Toronto at Guy and St. Catherine in Montreal just last week!Bylo Selhi wrote:P.S. If you look carefully when you pass old bank buildings on the main streets of urban Canada you'll some with the names of the original banks still engraved in the stonework.
Re: Aeroplan
ISTR that CIBC earned the title "touched by the Fuck-up fairy" by esteemed members of this board because they were usually deeply involved in all the major fiascos. I know back in my corporate life (ending in 1992), they were the only major bank who would need help with IMS from the vendor regularly.
What surprises me is that CIBC has only developed banking relationships with half the Aero Gold clients. This seems to have been a lost opportunity. And why would these types of clients appeal to TD?
What surprises me is that CIBC has only developed banking relationships with half the Aero Gold clients. This seems to have been a lost opportunity. And why would these types of clients appeal to TD?
For the fun of it...Keith
Re: Aeroplan
Adrian: All 6 big banks have bee excellent investments over many decades. The worst over the past 40 years has been CIBC and the best is BNS closely followed by RY and TD. Yes, agree that the Canada Trust deal was transformational for TD. CIBC was the other bank in the bidding.
- Bylo Selhi
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Re: Aeroplan
I was one of those customers for many years. The only other business I had with them then was indirect through TDW in holding their index mutual funds. I can't recall a single instance where CIBC tried to get me to switch any other business over to them. They even knew I was a TD/CT customer because I paid off the card every month via PAC from a TD/CT account. If that experience is typical then they squandered an opportunity. Not that I would have switched, but they didn't even make an attempt, however feeble.kcowan wrote:What surprises me is that CIBC has only developed banking relationships with half the Aero Gold clients. This seems to have been a lost opportunity.
I can think of two reasons.And why would these types of clients appeal to TD?
First, the Aerogold card is apparently very profitable. Ten years ago when they renewed the contract that's about to expire now they had a competitor bidding against them and they increased their royalty payment to AC from $200M to $350M.
Second, TD will likely try to win over Aerogold customers. I expect TD will be more aggressive than CIBC was. They have a long history of offering incentives to switch, from iPods to iPads and beyond.
Perhaps they see this as a low risk opportunity. Aerogold is profitable in its own right. Any new banking/brokerage business they can win over is icing on that cake.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
Re: Aeroplan
Then why did CIBC investigate alternatives rather than renewing the deal? Is this another example of the fuckup fairy at work?Bylo Selhi wrote:First, the Aerogold card is apparently very profitable. Ten years ago when they renewed the contract that's about to expire now they had a competitor bidding against them and they increased their royalty payment to AC from $200M to $350M.
Second, TD will likely try to win over Aerogold customers. I expect TD will be more aggressive than CIBC was. They have a long history of offering incentives to switch, from iPods to iPads and beyond.
Perhaps they see this as a low risk opportunity. Aerogold is profitable in its own right. Any new banking/brokerage business they can win over is icing on that cake.
For the fun of it...Keith
Re: Aeroplan
Bring on the iPads.Bylo Selhi wrote:I was one of those customers for many years. The only other business I had with them then was indirect through TDW in holding their index mutual funds. I can't recall a single instance where CIBC tried to get me to switch any other business over to them. They even knew I was a TD/CT customer because I paid off the card every month via PAC from a TD/CT account. If that experience is typical then they squandered an opportunity. Not that I would have switched, but they didn't even make an attempt, however feeble.kcowan wrote:What surprises me is that CIBC has only developed banking relationships with half the Aero Gold clients. This seems to have been a lost opportunity.
I can think of two reasons.And why would these types of clients appeal to TD?
First, the Aerogold card is apparently very profitable. Ten years ago when they renewed the contract that's about to expire now they had a competitor bidding against them and they increased their royalty payment to AC from $200M to $350M.
Second, TD will likely try to win over Aerogold customers. I expect TD will be more aggressive than CIBC was. They have a long history of offering incentives to switch, from iPods to iPads and beyond.
Perhaps they see this as a low risk opportunity. Aerogold is profitable in its own right. Any new banking/brokerage business they can win over is icing on that cake.
- optionable68
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Re: Aeroplan
The already did that. I suspect they will offer 15000 points and waive the first year annual fee, kind of like how CIBC did to lure over new clients year after year and then expand the overall client relationship.2yen wrote:Bring on the iPads
3-time winner of FWF Annual Stock Market Predictions contest
Re: Aeroplan
CIBC is still running that offer - https://www.cibc.com/cc/en/agoffer/?tid=2013383 - my card arrived last week .optionable68 wrote: I suspect they will offer 15000 points and waive the first year annual fee, kind of like how CIBC did to lure over new clients year after year and then expand the overall client relationship.
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Patrick Hutber: Improvement means deterioration
Re: Aeroplan
We can only speculate why CIBC wasn't able to renew the Aeroplan Visa deal. This is their most important franchise after core chequing accounts. Sounds like personalities or culture may have played a role. Certainly a coup for TD who has been probably the most aggressive bank over the last decade.
- optionable68
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Re: Aeroplan
Looks like CIBC got the better end of the deal.
TD will get customers whose only business with CIBC is their Aeroplan VISA, who are mostly short-term customers of CIBC only due to a "1 year no-fee free-points" promotion and will also depart once the promotion ends.
TD will get customers whose only business with CIBC is their Aeroplan VISA, who are mostly short-term customers of CIBC only due to a "1 year no-fee free-points" promotion and will also depart once the promotion ends.
3-time winner of FWF Annual Stock Market Predictions contest
Re: Aeroplan
No, I don't think so. TD "stole" one half of CIBC's very profitable Aero Visa business for a fairly small cost. TD' s earnings are going up while CIBc's are going down. Capital relief for CIBC is minor compared to the earnings hit. No reason to believe TD's attrition of these customers would be particularly high. Just because they don't have other banking relationships with CIBC, this doesn't mean they aren't very good Aero Visa customers.optionable68 wrote:Looks like CIBC got the better end of the deal.
TD will get customers whose only business with CIBC is their Aeroplan VISA, who are mostly short-term customers of CIBC only due to a "1 year no-fee free-points" promotion and will also depart once the promotion ends.
Re: Aeroplan
Called and cancelled my CIBC Aerogold today before my annual fee gets charged next week. The agent went through the spiel of offers trying to get me to stay but seemed kind of halfhearted and tired. I asked if they are getting a lot of cancellations. The hesitation before the denial spoke volumes.
Re: Aeroplan
Why did you cancel? Presumably those customers that at transferred to TD will get some sort of incentive to stay?Koogie wrote:Called and cancelled my CIBC Aerogold today before my annual fee gets charged next week. The agent went through the spiel of offers trying to get me to stay but seemed kind of halfhearted and tired. I asked if they are getting a lot of cancellations. The hesitation before the denial spoke volumes.
Re: Aeroplan
Mostly as I am finding that Aeroplan is of diminishing value. Both in terms of the way they are rigging the rewards redemption and also just to me personally as we are flying less. I also just hate paying that annual fee, especially for something that I no longer value. I got the MBNA cash back MC instead and will probably get another Visa if and when I can find a good one that is also cashback.
Also, it finally severs my last tie to CIBC. I really don't like them. I have always found them the most arrogant and least customer service oriented of the large banks I have dealt with (TD/RBC/CIBC). The fact I added an insignificant drop into their ocean of lost business was just the icing on the cake..
Also, it finally severs my last tie to CIBC. I really don't like them. I have always found them the most arrogant and least customer service oriented of the large banks I have dealt with (TD/RBC/CIBC). The fact I added an insignificant drop into their ocean of lost business was just the icing on the cake..
Re: Aeroplan
SQRT wrote:Why did you cancel? Presumably those customers that at transferred to TD will get some sort of incentive to stay?Koogie wrote:Called and cancelled my CIBC Aerogold today before my annual fee gets charged next week. The agent went through the spiel of offers trying to get me to stay but seemed kind of halfhearted and tired. I asked if they are getting a lot of cancellations. The hesitation before the denial spoke volumes.
My local TD bank manager and I were talking about this today. I said a high memory ipad mini would do the trick. (very wishful thinking)
- optionable68
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Re: Aeroplan
Am I missing something? Weren't the price of round trip flights to Hawaii 40,000 last week and now 45,000 this week?
3-time winner of FWF Annual Stock Market Predictions contest
Re: Aeroplan
Aeroplan balances (Airmiles to an even greater extent) are subject to what I've coined as "negative real interest rates" -- their utility goes down as years pass by.optionable68 wrote:Am I missing something? Weren't the price of round trip flights to Hawaii 40,000 last week and now 45,000 this week?
finiki, the Canadian financial wiki
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]
- westinvest
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Re: Aeroplan
More like hyperinflation. Your point balance may not change but your cost to redeem is going up. The points required for the desirable rewards (trans ocean First and Business Class) have been going up by something like 25% a year for the last couple of years.adrian2 wrote:Aeroplan balances (Airmiles to an even greater extent) are subject to what I've coined as "negative real interest rates" -- their utility goes down as years pass by.optionable68 wrote:Am I missing something? Weren't the price of round trip flights to Hawaii 40,000 last week and now 45,000 this week?
Re: Aeroplan
Aeroplan posted a 2014 reward chart: https://www3.aeroplan.com/FlightRewardChart.do
Not sure if this work, it's linked from the 'use your miles' tab -> travel after logging in. Aeroplan always suffered from serious inflation but it seems particularly bad this year. Reward miles on flights are much harder to get as Tango has become ubiquitous and the difference with higher fares is larger. Cost of Aeroplan flights has gone way up in many cases (also for other FF programs, or will go up soon like for United) and availability apparently is down, perhaps unless you're E100K.
You can get a lot of free miles at the moment from CIBC/TD/Amex fighting over the credit card market (30k for Amex Aerogold, 20k for CIBC Aerogold and Aero Infinite or whatever it is called, and 15k from TD). Amex and CIBC waive first year fee, TD apparently does if you call or go to a branch. It's not so clear how much they're worth but if they put you over a threshold to get something useful maybe worth considering.
I'll keep Aeroplan but I'm no longer spending on an Aeroplan credit card and will lose my Air Canada FF status this year.
Not sure if this work, it's linked from the 'use your miles' tab -> travel after logging in. Aeroplan always suffered from serious inflation but it seems particularly bad this year. Reward miles on flights are much harder to get as Tango has become ubiquitous and the difference with higher fares is larger. Cost of Aeroplan flights has gone way up in many cases (also for other FF programs, or will go up soon like for United) and availability apparently is down, perhaps unless you're E100K.
You can get a lot of free miles at the moment from CIBC/TD/Amex fighting over the credit card market (30k for Amex Aerogold, 20k for CIBC Aerogold and Aero Infinite or whatever it is called, and 15k from TD). Amex and CIBC waive first year fee, TD apparently does if you call or go to a branch. It's not so clear how much they're worth but if they put you over a threshold to get something useful maybe worth considering.
I'll keep Aeroplan but I'm no longer spending on an Aeroplan credit card and will lose my Air Canada FF status this year.
Re: Aeroplan
Isn't this just a sign that they are correcting an anomaly because business class to Europe was one of their few competitive advantages?
For the fun of it...Keith