Bank of America slimming card business

Reverting BAC.

Bank of America has announced it reached a deal to sell its $8.6 billion Canadian card portfolio to TorontoDominion Bank (TD) and plans to exit its consumer credit-card operations in the U.K. and Ireland as it seeks ways to bulk up its capital cushion. Earlier this year the bank announced deals to sell its card business in Spain to Apollo Capital Management (APO) and its small business lending portfolio in the U.K. to Barclays (BARC) as they weren't consistent with the company’s new strategies.

The bank said the sale of the Canadian unit, part of the MBNA card company Bank of America bought in 2006 amid a string of acquisitions, would boost its tangible common equity per share and is expected to close in the fourth-quarter. TD Group said it will pick up 1.8 million active card accounts from the deal and that it would pay a "modest premium" for the card receivables. TD said the purchase makes the lender one of the top card issuers in Canada, as MBNA had been the biggest issuer of MasterCard (MA) cards in the country.

Bank of America has been selling various non-core assets, including stakes in other financial companies and some private-equity units, as it tries to become leaner to work inside the new regulatory environments. But it has been facing investor skepticism on whether the company’s plan to sell these non-core assets will create enough of the capital the bank needs to meet the new global regulations. Bank of America also said it would exit its United Kingdom and Ireland card businesses which have about $19 billion in loans and more than 4,000 employees. It has not made a decision on the future of those businesses, which it may wind down or sell.

Bank of America (BAC : NYSE : US$7.76), Net Change: 0.57, % Change: 7.93%, Volume: 264,894,412

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