Bank of Ireland to sell UK credit cards business for €591m
Bank of Ireland has agreed to sell its UK credit cards business for £530m (€591m).
This comprises of the Post Office, the AA and the bank’s own branded UK consumer credit cards.
In Northern Ireland the sale will impact general consumers, however the portfolio excludes the bank’s commercial credit card portfolio.
Jaja Finance, which is backed by Centerbridge Partners Europe, will also become the issuer for the AA and Bank of Ireland's consumer credit cards.
Bank of Ireland UK CEO, Des Crowley, said: “[The] announcement demonstrates the bank’s continued progress in delivering against its strategic targets for growth and transformation to 2021, as set out at its Investor Day in June 2018”.
The bank, which will write to the impacted customers, will continue to service the credit card portfolio until the transfer to Jaja takes place next year.
Customers can continue to use their credit cards as normal and will still have access to the same customer services.
As at 31 December 2018, the UK consumer credit cards portfolio was around £545m and, in 2018, this business contributed £35m of total income and had operating expenses of £36m.
The sale proceeds will be used for general corporate purposes.
Diarmaid Sheridan, analyst at Davy Stockbrokers, said: “The [banks] strategy in the UK is to focus on higher return and more niche areas of the lending market, such as first-time buyers, later-in-life mortgages and car finance.”
“This is set against a market backdrop which remains extremely competitive,” he added.
Earlier this week, it was announced that the bank’s chief financial officer Andrew Keating is to leave for a job with an international organisation outside the financial services sector.
Also this week the bank completed the acquisition of approximately €260m in performing commercial loans from KBC Bank Ireland as part of its strategy of growing lending volumes.