Lloyds TSB and American Express Co. will announce today that Lloyds will become the first banking company based in Britain to issue Amex credit cards there.
Amex says the card program, scheduled to begin this quarter, will be its first large-scale one in the United Kingdom. Currently, only Capital One Financial Corp., of McLean, Va., issues Amex cards in Britain, and it issues only a small number there.
“We see major growth [opportunities] within the U.K. environment and Western Europe,” Peter Wright, a senior vice president at American Express, said in an interview Monday.
Last week MBNA Corp., which already issues Amex cards in the United States, announced plans to begin issuing them to British customers, but Mr. Wright said there is no timetable yet for doing so. Citigroup Inc., which has said it will begin issuing Amex cards in the U.S. this year, for now has no such plans in the United Kingdom, he said.
Lloyds, one of Britain’s largest banking companies, will design and issue the Amex cards and manage customer accounts, billing, and credit. The Lloyds logo will dominate the face of the card; Amex’s blue box will appear in the corner.
Katrina Cliffe, a spokeswoman for Lloyds, said it expects to issue “hundreds of thousands of cards” over the next 12 to 18 months.
Lloyds, which issues Visa and MasterCard products in equal numbers, said its Amex card would have a rewards program that would let cardholders earn points redeemable at some of the United Kingdom’s top-end retailers.
“We realized we had a gap,” Ms. Cliffe said. “We needed something more to grab customers and excite them. … Amex gives us the international aspect that Lloyds doesn’t have.”
It was also looking for a product that was “not rate-driven,” unlike the majority of credit cards in the U.K. market, she said.
Even though Lloyds offers a Premier MasterCard, it would be happy to have affluent customers switch to the Amex card, Ms. Cliffe said.
Neither Amex nor Lloyds would discuss the cards’ fees or how they would be split.
Amex has been signing international banking partners at a rapid clip. It has said it is talking to Industrial and Commercial Bank of China, that country’s largest commercial bank, about introducing Amex-branded corporate cards.
Craig Maurer, an analyst at Fulcrum Global Partners LLC in New York, said Amex is laying the groundwork for an eventual “solo venture” in 2007, when China is expected to let foreign issuers issue proprietary cards. (ICBC has been issuing Amex-branded credit cards to consumers since December.)
The Chinese market “has great potential,” Mr. Maurer said. “Why not try to take advantage of a fast-growing, newly affluent group?”
Citigroup and HSBC Holdings PLC have also signed card partnerships with Chinese banks in the past year.
Still, Mr. Maurer said, credit card spending will probably grow slowly in China. “There is a trust issue,” he said. “Debit is much bigger in China.”
Also this month, Amex announced partnerships with Parex Banka in Latvia and Postbank in Bulgaria to issue Platinum and Gold cards, as well as a plan to issue ruble-denominated cards in Russia through an exclusive partnership with Moscow’s Russian Standard Bank. (Amex offers a dollar-denominated card in Russia but will stop doing so when the ruble-denominated cards come out.)
Amex is working just as aggressively to expand its global merchant acceptance network, Mr. Wright said. Last week it announced an agreement that lets Barclaycard, a unit of the British banking company Barclays PLC, acquire and process Amex card transactions in nine African countries. (Barclaycard will not issue Amex cards under this agreement.)
Mr. Wright said another issuing partnership in the United Kingdom is unlikely in the near future. “We are very much focused on ensuring that our relationship with Lloyds goes out well.” Amex will also report first-quarter earnings today.
