Morgan Stanley buys Lloyd's Goldfish credit card business |
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Published
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Tue, 20 Dec 2005 13:55
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LONDON: British bank Lloyds TSB Group Plc. is selling its Goldfish credit card business to U.S. financial firm Morgan Stanley Bank International Limited for 1 billion pounds in cash.
Morgan Stanley said it hoped the acquisition will help it to expand its existing credit card business -- increasing the number of cards by as much as 47 per cent -- to 2.3 million accounts and securing 800 million pounds worth of business through balance transfer to its existing 1.5 billion pounds. The price the U.S. bank is paying constitutes a premium of 175 million pounds to the business unit's net balances.
Lloyds TSB, Britain's fifth-largest bank in assets terms, will make a profit before tax of 70 million pounds from the deal. The bank's head of retail Terri Dial said the bank would want to have a Lloyds TSB-branded credit card.
The bank had acquired Goldfish by buying the 70 per cent stake in did not own from utility major Centrica in 2003 for a premium of 112.5 million pounds to the unit's net balances. The deal with Morgan Stanley includes transfer of the brand and loyalty program. Dial said a vast majority of Goldfish's Glasgow-based staff will move to Morgan Stanley.
Morgan Stanley International's chairman David Walker said the acquisition is consistent with the bank's strategy of growing its international business by taking opportunities for bolt-on acquisitions. It is also in consonance with its decision to commit resources in the U.K. and Europe.
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