BoA to quit international credit card business
Charlotte, NC, August 16, 2011
Bank of America (BoA) has agreed to sell its credit card business in Canada to TD Bank Group and will exit its credit card businesses in the UK and Ireland.
“Our strategy is clear: We have been transforming the company to deliver the franchise to our core customer groups, and building a fortress balance sheet behind that,” said chief executive officer Brian Moynihan.
“While the credit card remains a fundamental core product for our US customers, an international consumer card business under another brand is not consistent with that strategy.”
The move also continues the transformation of Bank of America’s credit card business, following the sale of the UK Business Lending portfolio, the agreement to sell the Spanish card business, and the company’s continued exit from the depository institution affinity credit card business with the recent sales of the Regions and Sovereign credit card portfolios.
Sale of Canadian card business
Bank of America and TD Bank Group announced a definitive agreement by which TD Bank Group has agreed to purchase Bank of America’s $8.6 billion Canadian credit card portfolio as well as certain other assets and liabilities.
The transaction is expected to close in the fourth quarter, subject to regulatory approval. The transaction is expected to have a positive impact on the company’s Tier 1 common and tangible common equity and the respective ratios.
The transaction is also expected to result in a modest increase in tangible book value per share, which has grown 12 percent from January 1, 2010 to June 30, 2011.
European Card Business
Bank of America manages one of the largest credit card businesses in Europe, with portfolios in the UK and Ireland. Combined, these businesses have $19 billion in credit card loans and more than 4,000 employees.
Bank of America signed a definitive agreement on August 3 to sell the Spain card business to Apollo Capital Management, while in the UK, BoA sold its $200 million portfolio of small business card loans to Barclays in April. – TradeArabia News Service