Wright Express, the leading fleet card provider, has applied to form a limited-purpose bank in Utah, which would expand the range of services it can offer.
The company, based in South Portland, Maine, has bought a charter and won Utah's approval, said Paul F. Walsh, president and chief executive officer of Wright Express. If the Federal Deposit Insurance Corp. approves the proposal, the new entity-to be called Wright Express Financial Services-would open in early 1998, he said.
The bank "will simplify the ways we do business and extend our product set," Mr. Walsh said.
The bank would be a subsidiary of Wright Express, which itself is a unit of CUC International Inc.
CUC, a direct marketing company in Stamford, Conn., agreed in May to merge with HSF Inc. of Parsippany, N.J., a franchiser of hotel, real estate, and car rental concerns. HSF, with a base of 100 million consumers, operates such well-known subsidiaries as Avis, Days Inn, Ramada, Coldwell Banker, and Century 21.
The new parent company, to be known after the merger as Cendant Corp., will maintain dual headquarters and have combined revenues of about $4.3 billion. A spokeswoman for HSF said the integration is to be completed by yearend.
Mr. Walsh said the merger of his parent company with another giant conglomerate would be a boon to Wright Express. "Clearly, the magnitude of the organization is going to be changed," he said. The larger scale will introduce potential customers to the fleet card market, he said.
Wright Express, founded in 1983, issues and processes 1.6 million fleet cards, Mr. Walsh said, and has seen its portfolio grow 60% in each of the last three years. Among its cobranding partners are General Motors, GE Capital, and AT&T.
Last December, Wright Express won a contract with the General Services Administration to provide the U.S. government with fleet cards for petroleum and vehicle maintenance. The GSA contract now makes up one- quarter of the company's portfolio, Mr. Walsh said.
Wright Express-in partnership with American Express Co.-is bidding for a new government contract in the most recent round of solicitations, which were announced in September.
The company also maintains a joint marketing agreement with American Express, which is the leading issuer of travel and entertainment cards. With the merger of CUC and HSF, Mr.Walsh said, "our relationship with American Express becomes one of even broader opportuni-ties."
Yet Wright Express' ties to American Express do not preclude its working with banks, Mr. Wright said. "NationsBank is a cobrand partner of ours, and we do have relationships with other banks," he said. "We're always seeking new partners."