Sears Canada Inc. said today it is evaluating strategic alternatives for the company’s credit and financial services business, including its possible sale, to focus on its merchandising business.

The company said a sale is one of several strategic alternatives it is evaluating.

“Together, the Sears Card and Sears MasterCard form the third-largest credit card portfolio in Canada, with approximately four million active accounts,” Sears Canada said in a release.

Sears Canada’s credit and financial services business generated about $100 million in operating income in 2004. Sears Canada Bank, a wholly owned federally regulated Schedule I bank, extends credit to qualified customers through the Sears Card and Sears MasterCard and provides a range of related services.

The Sears Card is Canada’s largest in-house proprietary retail credit card portfolio with about $2.3 billion in receivables as of April 2. The Sears MasterCard portfolio had about $200 million in receivables.

CEO Brent Hollister said the credit and financial services division has contributed strong earnings, but “we believe that pursuing a strategic alternative in the current favourable market will maximize shareholder value” and let the firm focus on merchandising.

The company said it expects to conclude its review of strategic alternatives by the third quarter and hopes to implement any decisions before year-end.