BankAmerica Corp., which helped invent the bank credit card, may be contemplating a retreat from that increasingly crowded field.

As BankAmerica officials discuss ways to reinvigorate their card business, analysts say that a sale or spinoff is at least in the backs of strategists' mind".

"I personally think they're seriously questioning whether it's a business they want to stay with on a long-term basis." said Judah Kraushaar, bank analyst at Merrill Lynch $ Co. ,

Such a retreat would monumental given the size of the business -- the card portfolio had $7.6 billion of outstandings on June 30, No. 6 among bank issuers -- and

The BankAmericard, the first nationally distributed bank credit card, gave rise in the 1960s to the national association that eventually became Visa U.S.A. and Visa International. When Visa adopted its current name in the mid-19709, rights to the BankAmericard name reverted to Bank' America.

BankAmerica officials recently told analysts that credit cards contributed only 5% of earnings in the second quarter, off from 40% in early 1989.

Demographics Wrong

To be sure, part of the story is that profits from other business lines are rising while credit card growth is leveling off.

But "it sounded like they were considering partially or totally exiting the business," said, an analyst who asked not to be identified by name.

"They're finding that the business doesn't have the right demographics," the analyst said, noting that consumers are trying to pay off their debts.

The analyst also pointed out that 70% of BankAmerica's cardholders are in California where the poor economy has contributed to a chargeoff ratio of 6.17%, significantly higher than the national average.

BankAmerica officially declines to comment on its strategic planning. There is speculation that it will soon respond to recent market-share gains by nonbanks and others targeting affluent customer segments by introducing an enhanced product possibly tying a credit card to other bank services.

San Francisco rival Wells Fargo go & Co. adopted such a cross-selling strategy with a credit card offering credits toward the closing costs of a mortgage loan.

Market observers expect such tie-ins to gain momentum as banks try to fend off new entrants like American Telephone and Telegraph Co. and General Motors Corp. that dangle attractive pricing and rebate offers.

Another possibility being mentioned is that the bank might begin printing cardholders' photographs on their cards -- a security technique that has been adopted by Citicorp and Banc One Corp.

And it seems likely the California-based bank will soon adapt its "Banking on America" advertising theme to card products, observers said.

But Mr. Kraushaar said once chargeoffs decline, a sale "is not out of the question." The portfolio might be too large for most competitors to absorb, but a spinoff to investors could acomplish BankAmerica's objectives, he said.

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