Virgin Money is ready to launch its own credit card business after buying £1 billion in assets from the Bank of America's MBNA.
Virgin’s banking arm, backed by Sir Richard Branson, expressed its interest in buying part of MBNA's UK credit card book last month as it seeks to compete with high street banks (read more).
The Bank of America, which owns MBNA, has been forced to sell off European-based assets worth billions of pounds in receivables after falling foul of US regulators.
The deal with Virgin Money comprises roughly one third of these credit card assets, which will leave MBNA with around £2 billion on its books.
The association between the two companies dates back to 2002, with MBNA distributing Virgin’s credit card range. And it is a former vice-chairman of MBNA, Lance Weaver, who will run the new Virgin Cards business.
The deal is not expected to come at any cost to existing Virgin credit card customers, and will create 150 jobs in the North East when the transfer is complete early next year.
Virgin Money chief executive, Jayne-Anne Gadhia, described the new assets as a major development for the bank in its attempt to take on major high street lenders.
"A credit card business will complement our existing mortgages and savings business and represents another significant step in growing our bank," she said.
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