For sale: 10pc of the UK’s consumer credit card market, as BAML seeks to offload MBNA
Just over 10 per cent of the UK's consumer credit card market could be about to go up for sale, after it emerged Bank of America (BAML) is finally planning offload its European credit card arm.
City PM understands BAML has begun courting interest for MBNA, the credit card provider best known for its partnerships with football clubs such as Chelsea and Manchester United (although City commuters might be more familiar with its sponsorship of Thames Clippers).
The company represents 11 per cent of the UK's credit card market, making it a potentially valuable asset for lenders looking to increase the size of their credit card offerings – so much so that Sky News reported today it could be valued at "hundreds of millions" of pounds.
Among bidders thought to be circling are Lloyds, which has a 15 per cent share of the credit card market, but is thought to be interested in increasing it, and Virgin Money, which has grown quickly since its IPO in November 2014. In December of that year, Virgin Money bought £363m of assets from MBNA.
Rumours about such a sale have circulated since 2011, when BAML said it wanted to exit all consumer businesses outside the US. Having offloaded other assets, MBNA is the final piece in the puzzle.
Although Lloyds is still owned by the Treasury, its stake has now fallen to below 10 per cent: it isn't thought the government would have any objection to such an acquisition.
MBNA, Lloyds, BAML and Virgin Money all declined to comment.