Bank of Ireland sells UK credit card business for €590m
Bank of Ireland has reached agreement to sell its UK credit card business for £530m (€590m).
The business comprises Bank of Ireland's branded consumer credit cards, and the bank's share of financial services and payments partnerships with the UK Post Office and car breakdown service the AA.
The business division is being acquired by two special purpose investment vehicles linked to the European arm of US private equity firm Centerbridge Partners and UK financial technology business Jaja Finance.
Bank of Ireland said it will use the sale proceeds for general corporate purposes. The sale excludes the bank’s commercial credit card portfolio in the North and credit cards issued in the Republic will not be impacted.
"[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," said outgoing Bank of Ireland UK chief executive Des Crowley.
As part of a three-year strategic plan, last year, Bank of Ireland said it was looking at ways to double returns from low-single-digits in its UK division.
"While modest at an overall level and well-flagged, the sale should be positively recieved as Bank of Ireland seeks to reposition its UK portfolio from areas where it is unable to generate sufficient returns to higher return areas. The UK market remains extremely competitive and this is a small step towards improving the returns in the division," analysts at Davy Stockbrokers said.
