Spanish bank Santander is trying to get back UK credit card business from MBNA |
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Published
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Fri, 30 Dec 2005 20:05
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LONDON: Spanish bank Banco Santander Central Hispano SA is planning to take back the control of the credit card operations of its U.K. unit Abbey National, which is now being handled by U.S. credit card operator MBNA under a 2001 deal. Abbey National, then, was not a part of Santander. The agreement is set to end next year.
According to estimates, it may cost the bank around 300 million pounds.
Santander is known to be inducting its Parternon payment platform in Abbey National's new IT systems, which is clear indication that it wants to run the credit card business.
Abbey National had outsourced the credit card business to MBNA for 289 million pounds before Santander acquired it in 2004 for 8.5 billion pounds. Sources in the know say MBNA will insist on a similar payment to return the business as it owns the assets and customer base.
The Spanish bank is a major player in the credit cards business and issues some 15 million cards worldwide and most of the business is managed in-house as it is its core business.
Santander and Abbey National confirmed the agreement is under review and a buyback is one of the options. It said a final decision could well be sometime in the first quarter of 2006.
MBNA too said it is discussing future plans with Abbey National.
When Abbey struck the deal with MBNA, it had 500,000 customers and a loan book of 244 million. MBNA had paid a premium of 45 million pounds. The customer base now is 1.27 million.
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