Bank of America just keeps on shrinking.
The bank, once the biggest in the U.S. by assets and now second to JPMorgan Chase, will sell its Irish credit-card business to the private equity firm Apollo Global Management, Apollo announced on Wednesday.
The card business, called Bank of America Europe Card Services, has more than 200,000 card customers, with a total balance of more than 650 million euros (about $850 million) outstanding, according to Apollo.
This is the second time in the past year Apollo has grabbed a European credit-card business from Bank of America. It bought the bank's Spanish card business last August, Apollo noted. Between the two deals, Apollo will end up with more than 1.3 billion euros in credit-card receivables in Ireland and Spain, Apollo said.
The deal is the latest step in a broader contraction at Bank of America, which is trying to control costs and shrink down to a more manageable and -- it hopes -- profitable size.
In September, Bank of America said it plans to slash its global staff by 30,000, or about 10 percent, in the coming years (though in a statement to finance news site The Street earlier this month, a bank spokesman said that not all of those jobs will be cut through layoffs – some will be eliminated through "attrition… and other measures”).
The bank has also been working to shore up its cash reserves, work off a portfolio of shaky mortgages and deal with legal headaches like the mortgage-foreclosure mess. The Federal Reserve last week said Bank of America had enough capital to pass its latest stress test -- an improvement of sorts from last year, when the Fed infamously denied Bank of America’s request to raise its dividend after a lackluster stress-test performance. The latest test results prompted Bank of America’s stock to jump past $10 a share this week for the first time in seven months, CNNMoney noted.
While Bank of America trims down, Apollo is bulking up.
The private equity firm's decision to buy Bank of America’s Irish card business comes just two weeks after Bloomberg reported that Marc Rowan, a co-founder of the private equity firm, told an audience at the Citibank Financial Services Conference that he wanted Apollo to pick up where Wall Street is leaving off -- to fill in the vacuum left as traditional banks shrink.
“Let’s be the new bank,” Rowan said, according to Bloomberg.