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) -- So what are we to make

Bank of America's

(BAC) - Get Bank of America Corp Report

decision to sell a profitable business unit?

Investors seemed content, with the shares up 3% in early trading Monday, to $7.42.

The company has agreed to sell its $8.5 billion MBNA-branded credit card portfolio in Canad, to

TD Bank Group

(TD) - Get Toronto-Dominion Bank Report

, as part of its strategy to exit its entire international credit card business, including portfolios in the United Kingdom and Ireland.

Bank of America CEO Brian Moynihan

While Bank of America doesn't break-out the profitability of its international credit card portfolio from the rest of its Global Card Services unit, there's no question that cards in general are one of the bright spots at this point in the economic cycle, as


recently discussed.

But the company's strategy of divesting the unit fits in with two of Bank of America's goals.

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The first is to boost its capital ratios for eventual compliance with the enhanced capital requirements of Basell III and U.S. regulators. The second is shed non-core businesnesses and stick with Bank of America-branded customers, with whom it can continue to build multiple relationships and increase the company's "share of wallet."

Bank of America CEO Brian Moynihan said his company seeks to "deliver the franchise to our core customer groups," and that "while the credit card remains a fundamental core product for our U.S. customers, an international consumer card business under another brand is not consistent with that strategy." The company said its international credit card loans totaled $19 billion, serviced by over 4,000 employees.

The company agreed on August 3, to sell its credit card business in Spain to Apollo Capital Management.

Monday's deal announcement follow's Bank of America's decision in June to sell a $1 billion credit card portfolio to

Regions Financial

(RF) - Get Regions Financial Corporation Report

. That card portfolio is Regions-branded and will continue to be serviced by BAC unit FIA Card Services, until mid-2012.

One way that Bank of America works to build relationships with existing customers is to offer below-market rates for additional credit products. For example, a person applying for a loan for new car purchase who already has an account with the bank has a very good chance of being offered a bargain rate on the car loan, through the dealer.

Moynihan was careful to point out that the TD Bank deal fits in with his strategy of "building a fortress balance sheet," with the transaction "expected to result in a modest increase in tangible book value per share, which has grown 12 percent from January 1, 2010 to June 30, 2011."

Guggenheim Securities analyst Marty Mosby said the card sale to TD Bank was "just another step in the process where Bank of America is shedding the non-core businesses and hoping to generate some relief on capital," and "move forward on requirements that the regulators come up with."

Mosby said that the company has "assets on the balance sheets they can begin to shed, noncore business they can divest and gains they can generate from the equity state in China construction."

Mosby rates Bank of America a "Buy," having lowered his 12-month price target to $11 from $15 on August 11, estimating that the company won't have excess capital to increase dividends or repurchase shares until 2015.


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Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.