ABBEY National is kick-
starting its stalled credit card business by selling it to MBNA for #289m and a share in future revenues.
The payment includes a #45m premium and Andrew Pople, Abbey's retail banking manager, expects the bank will receive perhaps four times that amount over a five-year period beginning this July.
MBNA is the largest independent credit card company in the world and has been operating since 1993 in Britain, now
the fifth biggest player behind
the four major banks, where
Barclaycard is the market leader.
Abbey National started up its own credit card in 1996 and built up a base of around 500,0000 users. But this figure failed to grow further, despite it having 15 million retail
customers. The link-up with MBNA will allow it to take on the big four head-on.
Abbey National will receive a commission on every new account opened, as well as payments depending on card usage and milestones for the increase in the number of accounts. It is hoping to see
the number rise to around two million customers.
MBNA will offer Visa, cashback and platinum cards in up to a dozen formats. Cahoot, the internet banking subsidiary, is not involved in the MBNA deal. It has 120,000 card holders.
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