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A man walks past a Scotiabank branch on Bloor Street West in Toronto on Tuesday, November 4, 2014. Darren Calabrese for The Globe and MailDarren Calabrese/The Globe and Mail

Bank of Nova Scotia has agreed to buy a Canadian credit-card portfolio from JPMorgan Chase & Co., giving Scotiabank an additional two million MasterCard customers.

The deal comes after JPMorgan said it would not renew its 10-year agreement with Sears Canada Inc., which is currently associated with the cardholders. The Globe and Mail reported last week that Sears recently warned its cardholders that their store cards would not be valid after Nov. 15.

"This transaction is in line with our strategy to grow Scotiabank's payments business, including credit cards, while providing our shareholders with attractive risk-adjusted returns," James O'Sullivan, group head of Canadian banking at Scotiabank, said in a statement.

In 2014, Scotiabank identified credit cards as a key priority for expansion.

Less than one-third of its banking customers hold a credit card that is associated with the lender, putting it at the bottom of the Big Five banks, well below a peer average of 40 per cent to 50 per cent.

Cards are considered high-margin businesses that are especially attractive in a low-interest-rate environment, even though they make banks more susceptible to swings in consumer spending.

Last year, Scotiabank bought a 20-per-cent stake in Canadian Tire Corp. Ltd.'s financial-services business for $500-million, giving the bank exclusive access to new financial products, such as credit cards, at the retailer.

The terms of the deal with JPMorgan were not disclosed, but the deal comes with $1.7-billion in credit-card receivables and allows Scotiabank to give customers access to Visa, American Express and MasterCard credit cards – the first Canadian bank to offer all three cards.

Mike Henry, head of retail payments, deposits and lending, noted that credit cards deliver good financial returns, but also allow the bank to build stronger relationships with its customers.

"This is a great opportunity to continue to grow our payments business. And we get to welcome two million new customers to Scotiabank and start to build a relationship with those people," Mr. Henry said.

The deal closes on Nov. 16, at which point Scotiabank will get in touch with existing Sears cardholders and offer them services.

Sears has been struggling with its retail operations, raising money by selling some of its store leases as U.S. rivals such as Nordstrom Inc. set up shop in Canada.

Mr. Henry said the credit-card deal was made with JPMorgan, rather than Sears.

"But what we saw in working with JPMorgan Chase was a really well-run business, a really well-performing portfolio, a bunch of attractive customers right across Canada from coast to coast," he said. "We thought that aligns nicely with our business and was a great chance to bring those customers into Scotiabank and start to build relationships with them."

Martin Parizeau, chief executive officer of Canada card services at JPMorgan Chase, said in a statement that the agreement with Scotiabank "enables JPMorgan Chase to streamline its operations in Canada while providing our customers with the opportunity to migrate to and be serviced by Scotiabank's global consumer footprint."

Editor's note: An earlier digital and the original newspaper version of this story incorrectly stated that Scotiabank's deal would also provide Sears Canada with a financial-services partner. This digital version has been corrected.