U.S. Bancorp has purchased the credit card portfolio of the grocery retailer Kroger Co. from a Royal Bank of Scotland Group PLC subsidiary.
The Minneapolis company's U.S. Bank closed the deal May 28, Kathy Kelly, the president of Kroger's personal finance business, said in an interview Wednesday. The price was not disclosed.
"We expect that U.S. Bank will continue to help us innovate and be a leader in financial services," Kelly said.
As part of the portfolio sale, U.S. Bank plans to provide new payment capabilities to the Cincinnati retailer's customers. RBS Citizens decided to exit the partnership because it is no longer part of its strategic plan, a spokeswoman said via e-mail.
U.S. Bank has 192 branches in Kroger stores, according to a Kroger spokeswoman.
"We think the grocery category in the new era of payments is going to be one of the strongest performers relative to all the co-branded sectors out there," said Jim Geeslin, the chief strategy officer at U.S. Bank Retail Payment Solutions. In its most recent annual report, Kroger said it expected to incur "bad-debt expense" of about $22 million this year resulting from credit extended to customers through its credit card.