Bank of America sells credit card unit

Vittorio Hernandez – AHN News

Charlotte, NC, United States (AHN) – Bank of America agreed on Monday to sell its Canadian credit card unit to Toronto-Dominion Bank for $7.6 billion cash.

The unit was acquired by former BofA Chief Executive Officer Kenneth Lewis and is one of over 20 bank assets or units sold by current CEO Brian Moynihan since he took over BofA in 2010.

Besides the Canadian card unit, Moynihan disclosed that the bank will also sell its U.K. and Irish card businesses, signaling its exit from credit-card lending outside the U.S. He said the sale is part of the company complying with new international capital standards and to focus on corporate lending, investment banking and retail clients in the U.S.



Prior to the announcement of the sale, Moynihan wrote down $20.3 billion the credit card and mortgage units purchased by BofA under Lewis, which spent over $130 billion to make it the largest U.S. bank by asset. The write downs were because of increased defaults and U.S. regulation limiting fees.
Besides the credit card unit, BofA is also disposing of the First Republic Bank, stakes in BlackRock and Itau Unibanco Holding in Brazil.

BofA’s Canadian MasterCard portfolio is just one of the purchases made by TD Bank within the past five months, which has reached $20 billion. Previously, TD Bank bought Chrysler Financial for $6.3 billion;

Canadian banks are buying assets from foreign lenders who are leaving and amid unloading of units by Canadian and U.S. banks to boost their capitals.

News of the credit card business sale caused shares of Bank of America to go up 57 cents or 7.9 percent to $7.76 in the New York Stock Exchange composite trading.
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