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Ted Rogers built Rogers Communications Inc. into Canada's largest wireless company by amassing vast amounts of debt. Now the company famous for borrowing wants to become a lender.

Rogers is seeking permission to offer its own credit cards within the next few years, which would make it the first cable and telecom company in Canada to wade into that line of business.

The company has applied under the federal Bank Act to incorporate a small in-house bank, which is the first step to offering retail credit cards in Canada. The move is more common among retailers such as Wal-Mart, which applied last year for bank status so that it could offer credit cards, but is rare for a phone company.

As well, retailers such as Loblaw, which owns the President's Choice brand, have partnered with major financial institutions to offer other banking functions such as taking deposits and paying interest. However, Rogers officials said the company has no intention of venturing into daily banking operations, such as deposits.

That said, credit cards present a distinct opportunity for Rogers to expand its reach. The media, cable and wireless giant, which also owns the Toronto Blue Jays, has direct relationships with millions of customers, including many who pay bills using credit or direct-deposit accounts.

Analysts say the company can build a card business by leveraging those relationships to market its brand of cards, especially by reaching out to customers who have good credit standing in its database.

Rogers could also compete with credit card distributors by providing perks related to its products, such as discounts, similar to the loyalty rewards cards that many banks offer. This is an industry several retailers are getting into in order to attract and keep business, including Shoppers Drug Mart which said last year it would expand into financial services.

Rogers officials gave no specific date when the cards would be launched, if the licence is eventually granted, but said the application process could take more than a year.

"We routinely explore opportunities to strengthen our position as a leader and innovator in the communications industry. While our core strengths remain in communications and media, we are always looking for more ways to deliver value to our customers," Rogers spokeswoman Carly Suppa said.

"The licence, if granted, would give us the flexibility to pursue a niche credit card opportunity to our customers should this make sense at a future date."

While Rogers makes the jump, some of its rivals aren't keen to follow. Telus Corp. said it has no plans to seek a banking licence. "It's not our core competency," a spokesman for the company said.

The evolution into a lender via credit cards would be an interesting twist for Rogers, which was famous for taking on debt in the 1990s as the late founder, Ted Rogers, built an empire. By 1998, the company's shares had dropped to $5 as the company struggled under $5-billion worth of debt. Analysts said in those days the company flirted with insolvency several times. However, Rogers has emerged as a telecommunications and Internet titan since then, becoming hugely profitable and boosting dividends. Its shares now trade at more than $37 and rose about $50 in 2007.

The application was made public on the federal government's Canada Gazette, which posts regulatory applications. If permission is granted by the Minister of Finance, the Toronto-based operation would operate under the name Rogers Bank in English Canada and Banque Rogers in French Canada. Public response to the application must be submitted to the Office of the Superintendent of Financial Institutions by October 24.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
FISI-Q
Financial Institut
+0.97%18.82
RCI-N
Rogers Communication
-0.49%41
WMT-N
Walmart Inc
-0.91%60.17

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