Sanwa Bank California has sold its $25 million credit card portfolio to MBNA Corp., which will service the cards under Sanwa's name.
MBNA maintains about 700 such agent bank relationships, in which it handles marketing and operations for a portfolio and uses the partner's brand.
In the deal with Los Angeles-based Sanwa, MBNA will market Preferred and Platinum Plus MasterCard and Visa cards to consumers and businesses.
Sanwa, the largest overseas subsidiary of Sanwa Bank Ltd. of Tokyo, will receive a cut of the revenue generated from the portfolio of 30,000 accounts.
Christine Larson, senior vice president of retail product management at Sanwa, said an issuer with MBNA's scale could offer lower prices and better service.
"This alliance will expand on the credit card products and services we currently offer to our individual and business customers," she said. "Existing customers will see an expanded level of service, while the bank will enjoy a much more competitive footing in attracting new customers."
Among other major banks served by MBNA are Dime Savings Bank of New York and California Federal Bank of Los Angeles.
"We've found this type of program to be very successful," said Brian Dalphon, senior executive vice president at MBNA. "We get a small but high- credit-quality portfolio, and we get the opportunity to market to their customer base and continue to build the portfolio."
Agent bank programs are becoming increasingly popular as small and midsize banks look for more cost-effective ways to stay in the credit card business. In December, Washington Mutual Inc. of Seattle chose Associates First Capital Corp. to run its card program.
Stanley Anderson, president of Anderson & Associates in Arvada, Colo., said agent programs help the larger issuer in the partnership stay competitive as well.
"The name of the game today is volume," Mr. Anderson said. Large issuers can use agent bank arrangements to "gain additional volume and lower their per-unit cost."