Bank of America Corp. is selling an $8.6 billion credit card portfolio in Canada and plans to unload $19 billion of card loans in Europe as it works to exit the international card business, the issuer announced Aug. 15.
The Charlotte, N.C.-based company has agreed to sell its Canadian portfolio to TD Bank Group for an undisclosed amount, though TD said in a separate press release it will pay a “modest premium” on the portfolio. BofA also is putting up for sale portfolios in the United Kingdom and Ireland after striking a deal Aug. 3 to sell its Spain card business to Apollo Capital Management Inc. and a $200 million small-business card portfolio to Barclays PLC in April (
The moves are part of the bank’s efforts to focus on “core customer groups,” Brian Moynihan, BofA chief executive, said in a press release.
“While the credit card remains a fundamental core product for our U.S. customers, an international consumer card business under another brand is not consistent with that strategy,” Moynihan said.
In the U.S., BofA also has been focusing more on its own card portfolios versus affinity programs. In June, Regions Financial Corp. announced it was buying $1 billion of card loans from FIA Card Services, a subsidiary of BofA (
In the Aug. 15 press release, BofA said it also recently sold a Sovereign Bank credit card portfolio.
BofA expects the sale of its Canadian portfolio to close in the fourth quarter, noting in the press release the deal should have a positive effect on its Tier 1 common and tangible common equity. TD said the acquisition will add 1.8 million active accounts to its existing Canadian credit card base of about 4 million active accounts.
As of June 30, BofA had $26 billion in non-U.S. consumer credit card loans, down 5.2% from Dec. 31, according to the company’s most recent quarterly report.
