MBNA Buys AmSouth's $550 million Credit Card Portfolio

NEW YORK – Regional U.S. Southeast bank AmSouth Bancorp said on Monday it has agreed to sell $550 million of credit card debt to MBNA Corp. as it exits the business to cut costs.

AmSouth, which expects a pretax net gain of about $170 million from the sale of 390,000 accounts, joins banks like Wachovia Corp. and SouthTrust Corp. which sold their credit card portfolios to MBNA, the leading independent credit card lender.

An AmSouth spokesman said the credit card business has become increasingly competitive with many larger lenders offering a wider range of products. AmSouth plans to focus more on other consumer products like checking accounts, he said.

“It is not as cost effective to be in the credit card business,” the spokesman said.

He did not say how many of AmSouth’s 12,000 employees would be affected by the sale, but noted that they will be offered other jobs at the Birmingham-based company.

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