LONDON: Bank of Ireland Group has announced that it has, through Bank of Ireland (UK) plc, agreed to sell the existing UK credit cards portfolio at par value. This comprises of the Post Office, the AA and the Bank of Ireland’s branded consumer credit cards for a consideration of £530 million to CCP Credit Master Lux S.à r.l. and CSCP III Master Lux S.à r.l. which are special purpose investment vehicles advised by affiliates of Centerbridge Partners Europe LLP and Jaja Finance Limited.
In addition, the Group and Jaja have entered into a separate long-term agreement under which Jaja will become the issuer for the AA and Bank of Ireland’s consumer credit cards.
As at 31 December 2018, the UK consumer credit cards portfolio was £545 million and, in 2018, this business contributed £35 million of total income and had operating expenses of £36 million.
The sale of this portfolio is expected to generate a 70bps improvement in the UK business RoTE and 10bps towards the Group’s CET 1 ratio.
The sale proceeds will be used for general corporate purposes.