U.S. Bancorp has purchased grocery retailer Kroger Co.’s credit card portfolio from a Royal Bank of Scotland Group subsidiary.
The Minneapolis-based bank holding company’s U.S. Bank closed the deal May 28 for an undisclosed amount, according to Kathy Kelly, president of Kroger’s personal finance business.
As part of the portfolio sale, U.S. Bank plans to provide new payment capabilities to the Cincinnati-based retailer’s customers. Kelly would not specify what new services are in the works or what prompted RBS Citizens N.A. to sell the card portfolio.
“We expect that U.S. Bank will continue to help us innovate and be a leader in financial services,” she says, noting the sale is U.S. Bank’s largest acquisition of a cobranded card portfolio in recent years.
U.S. Bank operates 192 in-store branches in Kroger stores, according to a Kroger spokesperson.
Officials at both U.S. Bank and Citizens Financial Group Inc., parent of RBS Citizens and subsidiary of Royal Bank of Scotland, did not respond to requests for comment as of press time.
The portfolio includes the 1-2-3 Rewards MasterCard that enables cardholders to earn extra points for purchases at Kroger stores, including Kroger, Fry’s, Dillons and Smith’s.
In its most recent annual report filed with the Securities and Exchange Commission in March, 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.
