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CARD Act Delays Credit Card Portfolio Deals

Financial Times
The lack of clarity around new credit card regulations has become an impediment to issuers acquiring card portfolios, industry banker and three consultants told dealReporter.

Once the regulations created by the CARD Act are implemented next February, card portfolios on the block like GE’s (NYSE:GE) private-label business and parts of Citigroup’s (NYSE:C) private-label card business will likely gain renewed interest from bargain hunters, but at even further discounts to previous deals, the banker and two of the consultants agreed.

GE’s GE Money unit runs one of the largest private label credit card businesses in the US. It has said publicly since 2008 it would consider a sale or partnership for the business. Citigroup has also indicated interest in selling parts of its card portfolios.

In addition, card portfolios not yet known to be on the market could also be up for grabs following the implementation of the new regulations, the banker and consultants said.

Anybody in this business today has to have someone looking at how to exit the business said the banker, who is directly involved in both buy and sell side discussions for credit card portfolios.

Citi holds its private label card portfolio within Citi Holdings where the company retains around USD 850bn worth of its non-core assets, including the retail brokerage, asset management and consumer finance businesses it plans to sell or unwind. The larger remainder of the Citi bank-branded cards make up a large part of the USD 1.1trn worth of

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