LONDON (Reuters) - Santander UK, the British arm of Spain’s biggest bank, has agreed to sell its portfolio of UK retail store cards, including those issued by Top Shop and Debenhams.
Santander (SAN.MC) said it had reached an “agreement in principle” to sell the business, which has about 7 million customers, to SAV Credit. It would be a transformation deal for the specialist credit card lender, owned by U.S. hedge fund Varde Partners.
“We expect to close the deal in the first quarter of 2013,” Santander said in a short statement.
Kent-based SAV added: “We see great opportunities in the market and are committed to expanding and developing it as part of our growth strategy.
Santander declined to comment on the size of the loan book or provide further details. It runs the store cards for Arcadia, which includes Top Shop and Top Man, House of Fraser, Debenhams and Laura Ashley.
Santander acquired the business from GE Money in March 2008, but banks are coming under increased regulatory scrutiny for mis-selling, including for store cards. Many store cards are not actively used after being taken out for an initial purchase.
SAV Credit was founded in 2000 and was bought by Varde for 472 million pounds ($768 million) in September 2011.
It has 500,000 accounts and 500 million pounds in credit card assets under management.
In 2007 it bought the marbles card brand from HSBC (HSBA.L) and bought UK Citi (C.N) card customers in 2010, now rebranded as Opus. It employs around 70 staff, supported by 300 people at its servicing partners.
Reporting by Steve Slater; Editing by David Cowell