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More banks are likely to follow in Regions Financial Corp.'s footsteps and bring their credit card portfolios back in-house as the worst of the recession's damage recedes and they look to increase revenue.
June 10 -
On Monday, Regions said it signed an agreement to purchase the $1 billion portfolio of Regions-branded credit cards from FIA Card Services, a subsidiary of Bank of America.
June 6
Bank of America Corp. said Monday that it is selling an $8.6 billion credit card portfolio in Canada and plans to unload $19 billion of card loans in Europe as it works to exit the international card business.
The Charlotte, N.C., company has agreed to sell its Canadian portfolio to TD Bank Group for an undisclosed amount, though TD said in a separate release that it will pay a "modest premium" on the portfolio. B of A also is putting up for sale portfolios in the United Kingdom and Ireland after striking a deal Aug. 3 to sell its Spain card business to Apollo Capital Management Inc. and a $200 million small-business card portfolio to Barclays PLC in April.
Brian Moynihan, B of A's chief executive, said in a press release that the moves are part of the bank's efforts to focus on "core customer groups."
"While the credit card remains a fundamental core product for our U.S. customers, an international consumer card business under another brand is not consistent with that strategy," Moynihan said.
In the U.S., B of A has also been focusing more on its own card portfolios versus affinity programs. In June, Regions Financial Corp. announced it was buying $1 billion of card loans from FIA Card Services, a subsidiary of B of A. In the press release on Monday, B of A said it also recently sold a Sovereign Bank credit card portfolio.
B of A said the sale of its Canadian portfolio is expected to close in the fourth quarter and should have a positive effect on its Tier 1 common and tangible common equity. TD said the acquisition will add 1.8 million active accounts to its existing Canadian credit card base of about 4 million active accounts.
As of June 30, B of A had $26 billion in non-U.S. consumer credit card loans, down 5.2% from Dec. 31, according to the company's most recent quarterly report.
