Bank of Ireland to sell UK credit card portfolio for £530m

Bank of Ireland has agreed to sell its UK credit card portfolio at face value of about £530 million, it announced on Friday. The portfolio comprises the Post Office, the AA and Bank of Ireland's branded consumer credit cards.

It is to be sold to special purpose investment vehicles advised by affiliates of Centerbridge Partners Europe LLP and Jaja Finance.

In addition, Bank of Ireland and Jaja have entered into a separate long-term agreement under which Jaja will become the issuer for the AA and Bank of Ireland’s consumer credit cards.

As of the end of last year, the bank’s UK consumer credit cards portfolio was about £545 million and, in 2018, this business contributed £35 million of total income and had operating expenses of £36 million.

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The bank said the sale proceeds would be used for general corporate purposes.

Bank of Ireland will continue to service the credit card portfolio until the transfer to Jaja takes place in 2020.

Business as usual

Customers can continue to use their credit cards as normal and will still have access to the same customer help and support service. Customers will be written to prior to the transfer of their credit card account to Jaja.

Bank of Ireland UK chief executive Des Crowley said Jaja was "an innovative company which shares our commitment to delivering outstanding customer service".

“We are proud to partner with them, and bring their next-generation credit card to customers across the UK,” he said.

“Today’s 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 sale excludes the bank’s Northern Ireland commercial credit card portfolio. Credit cards issued in the Republic are not affected.