Bank of America Corp has decided to sell its credit card business in Canada to TD Bank Group as a part of plan by the largest US bank to shed assets and rebuild its capital base, Economic Times reported.
The agreement with TD Bank covers an $8.6 billion portfolio, Bank of America said. Bank of America Corp also wants to exit its United Kingdom and Ireland card business. It has not decided whether to sell or wind down those operations.
This move effectively ends Bank of America’s international consumer banking operations, and comes as it seeks ways to bulk up its capital cushion.
According to analysts and investors, the sale is unlikely to cause a large, immediate increase in the bank’s core capital levels.
“Each of these sales is a small piece or step, but once they’re done, this could add up to a big impact,” said Guggenheim Securities LLC analyst Marty Mosby.
The bank is fighting lawsuits and credit problems pertaining to its ill-fated acquisition of home mortgage lender Countrywide Financial Corp three years ago as the U.S. housing bubble burst.
Bank of America said the sale was not a reaction to analyst estimates over the last week that it would need to raise capital to absorb those losses. Bank of America did not disclose the value of the transaction.
Bank of America Corp is an American multinational banking and financial services corporation. It serves clients in more than150 countries and has a relationship with 99% of the U.S. fortune 500 companies and 83% of the Fortune Global 500.
