(June 28 – 10:35 ET) – Merrill Lynch is positive on CIBC’s announced move into Safeway stores in the U.S.

Merrill maintains its short and long-term buy on the stock, while weighing in on CIBC’s latest “bank-in-a-box” initiative. CIBC has signed a deal with Safeway to offer in-store banking kiosks under the name Safeway Select Bank. It will start with 30 locations, installed by the end of the summer, eventually expanding to 400.

Merrill notes that CIBC already has 194 kiosks and 237 ATM’s in Loblaw stores under the PC financial brand and 38 kiosks in Winn-Dixie stores in the U.S. South as Marketplace Bank.

Merrill sees, “Good potential for customer acquisition and product offering in the western U.S. based on a compelling value proposition.” It says CIBC’s minimal overhead in the U.S. should make it one of the best values in the in-store banking strategy.

CIBC’s model makes sense, Merrill argues, because it is a “multi-channel” offering. Online-only virtual banks suffer lack of access to cash and lack of direct contact, but CIBC’s model overcomes this with a combination of ATM, PC and physical introduction. “Considering the traffic flow, the potential could be significant,” Merrill says, noting that Safeway stores attract 20 million customers a week.
-IE Staff