MERRILL Lynch owner Bank of America is to shut down or sell off its credit card businesses in the UK, Ireland and Canada as it seeks to build a “fortress balance sheet” against legal claims, it said yesterday.
Bank of America sold its $8.6bn (£5.3bn) Canadian credit card portfolio to local banking group TD Bank for an unspecified amount that would add a “modest” amount to BofA’s book value per share.
It will also exit its $19bn UK and Ireland credit card portfolios, operated under the MBNA brand, though it had not decided whether to sell them or wind them up.
Chief executive Brian Moynihan said the move was in line with the bank’s restructuring to focus on its core business and strengthen its balance sheet.
“While the credit card remains a fundamental core product for our US customers, an international consumer card business under another brand is not consistent with that strategy,” he said in a statement.
BofA, the biggest US bank by assets, is under fire from shareholders that believe it must raise additional capital to survive multi-billion-dollar legal battles and credit problems.
It is fighting a number of legal battles and credit problems related to its rescue takeover of mortgage lender Countrywide Financial in 2008.
BofA has lost more than $22bn in its consumer mortgage division in the last four quarters.
The bank has so far sold a $200m UK small business loan book to Barclays and its Spanish credit card arm to private equity giant Apollo.
FAST FACTS | BANK OF AMERICA
● Sold its $8.6bn Canadian credit card loan portfolio and plans to exit its $19bn UK and Irleand credit card business
● Bought Merrill Lynch for $50bn and Countrywide Financial for $4.1bn in 2008