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19 MARCH 2010 UPDATE: Advisor to SAV Credit on the UK acquisition (with Värde Partners) of £835 million of credit card receivables from Citigroup.
Since forming Global Consumer Finance Advisory in June 2006, Leigh Allen has been involved in four other disclosable transactions:
- Advisor to SAV Credit on its acquisition of the Marbles and Beneficial credit cards from HSBC (see description below)
- Advisor to Capital One on its disposition of its joint venture in Spain (see description below)
- Consutlant to Citigroup on its advisory assignment to Cemex in Mexico to sell its interest in Cemex Capital to form a joint venture with a private equity group
- Assistance to Maxeda, a Dutch retail group owned by KKR, on the renewal of its program with Fortis's International Credit Services
Details on selected transactions can be found below.
19th March 2010
SAV CREDIT COMPLETES PURCHASE OF CITI CARDS PORTFOLIO IN THE UK
CITI ANNOUNCES SALE OF CITI CARDS PORTFOLIO IN THE UK
In the largest credit card transaction in over two years, a deal was announced late Friday afternoon 19 March by SAV Credit and Citigroup involving £835 million of credit card receivables related to the CitiFinancial Europe Credit card portfolio. This portfolio represented the Citi branded credit cards in the UK but did not include Egg.
The acquisition was funded through a special purpose vehicle managed by SAV Credit and Värde Partners and funded by Värde as well as SAV Credit’s existing private equity investors Palamon Capital Partners, Electra Private Equity and Morgan Stanley Alternative Investment Partners.
The transaction follows SAV’s 2007 acquisition of the marbles credit card portfolio from HSBC. With the CitiFinancial acquisition, SAV now has more than one million customers with receivables of over £1 billion. SAV is a specialist credit card lending company in the UK, headed by its CEO, James Corcoran (formerly of HBOS and Washington Mutual), and was founded by Richard Langstaff in 2001.
The sale of this card portfolio is a continuing part of Citi’s disposition strategy designed to reduce the assets in Citi Holdings in an economically rational manner. Despite the large size of the transaction from a credit card perspective, the transaction will not be material to Citi’s financial results.
Terms of the deal were not disclosed. Press releases are below, or can be found at www.savcredit.co.uk and at www.citigroup.com/citi/press/press_list.htm.
Global Consumer Finance Advisory advised SAV Credit on this acquisition.
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FOR IMMEDIATE RELEASE
19th March 2010
SAV CREDIT COMPLETES PURCHASE OF CITI CARDS PORTFOLIO IN THE UK
SAV Credit Limited, the UK’s leading specialist credit card provider, has completed the purchase of the Citi branded credit card portfolio in the UK from CitiFinancial Europe PLC for an undisclosed sum in a deal which more than doubles its number of customers and takes its credit card portfolio to well in excess of £1 billion.
The transaction involves the purchase of approximately £835 million in customer balances and 539,000 credit card customer accounts. With this acquisition SAV Credit, which also operates the aqua and marbles credit cards, further solidifies its market-leading position as a specialist credit card provider which is built around its information-based credit management capabilities.
James Corcoran, SAV Credit Chief Executive Officer, said: “We are delighted to conclude the acquisition of the Citi Cards portfolio. The transaction is evidence of our ongoing commitment to growth in the UK credit card market, and our strong reputation in the effective management of credit risk despite economic cycles.”
Funding for the acquisition has come from its new investment partner Värde Partners as well as SAV Credit’s existing private equity investors Palamon Capital Partners, Electra Private Equity and Morgan Stanley Alternative Investment Partners.
Corcoran added: “We are delighted to welcome Värde Partners, a leading international investor specialising in alternative investments, as the key partner in this exciting transaction. This support for SAV Credit demonstrates the confidence they have, along with our existing shareholders, in our business model and the market.”
SAV Credit also welcomes the recent agreement between the Department of Business, Innovation and Skills and the credit card industry which has furthered the rights of consumers. The regulatory changes being implemented fit with its vision for the development of the credit card industry.
For further information please contact:
Kevan Reilly/Jonathan Flint
Citigate Dewe Rogerson
Tel: 020 7282 1096
About SAV Credit
SAV Credit, established in 2001, pioneered specialist credit card lending in the UK, catering for consumers often overlooked by mainstream financial service providers. The group acquired the marbles credit card business from HSBC Bank plc in October 2007 and, together with the aqua credit card and this latest acquisition, now has more than one million customers with balances in excess of £1 billion. SAV Credit and is backed by management including senior executives from across the financial services industry and a group of leading private equity investors including Palamon Capital Partners, Electra Private Equity and Morgan Stanley Alternative Investment Partners.
To find out more about SAV Credit visit www.savcredit.co.uk
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FOR IMMEDIATE RELEASE
19th March 2010
CITI ANNOUNCES SALE OF CITI CARDS PORTFOLIO IN THE UK
Citi today announced the completion of the sale of its Citi Cards portfolio in the UK, part of CitiFinancial Europe PLC, to CCAM, a special purpose vehicle managed by SAV Credit, a UK credit card issuer, and backed by Värde Partners, an investment manager specialising in alternative investments. The transaction, comprising total assets of approximately £835 million ($1.25 billion), represents the majority of receivables in the portfolio.
This transaction does not impact Egg, the Citibank retail banking network in the UK or Commercial Cards clients of Citi’s Global Transaction Services business. Citi remains committed to the UK, one of its largest markets.
The sale of this card portfolio is consistent with Citi’s strategy to reduce the assets in Citi Holdings in an economically rational manner while working to generate long-term profitability and growth from Citicorp, which comprises its core franchise. Citi continues to make progress on this strategy and will continue to pursue opportunities within Citi Holdings that are in the best interest of stakeholders. This transaction follows several other divestitures in Europe in the past six months and demonstrates Citi’s strong focus on reducing assets in Citi Holdings.
During the migration Citi will continue to provide customer servicing facilities for the 539,000 accounts transferred in today’s transaction.
Terms of the deal were not disclosed. The transaction will not be material to Citi’s financial results.
For further information please contact:
Vanessa Wood Teresa Broughton
020 7508 8664 020 7508 7355
Vanessa.lucy.wood@citi.com
teresa.broughton@citi.com
About Citi
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.
About Egg
Egg is a UK online bank providing banking, credit cards and insurance through its internet site and other distribution channels. To find out more visit www.egg.com
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30 October 2007: Global Consumer Finance Advisory served as the financial advisor to SAV Credit on its acquisition of the marbles and Beneficial credit card portfolios from HSBC
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30 October 2007
HSBC SELLS NON-CORE UK CARD PORTFOLIOS
HSBC Bank plc has sold its marbles and Beneficial branded credit card portfolios in the UK to SAV Credit Limited, for a consideration of approximately £385 million. The portfolios consist of 338,000 accounts.
Steve Britain, Head of Consumer Cards, HSBC Bank plc said: “We are fortunate to have a number of strong brands with which to grow our cards business in the UK. These include HSBC and first direct and, through our relationships with major retailers, M&S and John Lewis. The marbles and Beneficial brands are not a core part of this strategy, and accordingly, we are pleased to have sold the portfolios to SAV.”
HSBC is one of the top five largest card issuers in the world with US$79 billion in receivables and over 120 million cards in force in approximately 40 countries as at 30 June 2007. HSBC is one of the UK’s top four card issuers, with over 10 million cards in issue and receivables of £8 billion.
Media enquiries to Richard Lindsay on +44 (0)20 7992 1555 or richardlindsay@hsbc.com
Note to editors:
HSBC Bank plc
HSBC serves 15.6 million customers in the UK and employs more than 40,000 UK staff. HSBC is Britain’s most recommended big bank. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc, and a member of the HSBC Group. HSBC Holdings plc serves over 125 million customers worldwide through some 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of some US$2,150 billion at 30 June 2007, HSBC is one of the world’s largest banking and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.
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30 October 2007
SAV CREDIT ACQUIRES MARBLES CREDIT CARD BRAND
SAV Credit Limited has completed the purchase of a portfolio of credit card accounts from HSBC Bank plc for a consideration of approximately £385 million. The acquisition includes the marbles credit card brand and consists of 338,000 customer accounts.
The acquisition is funded by a new debt facility from The Royal Bank of Scotland and by SAV Credit’s existing private equity partners including Palamon Capital Partners, Electra Private Equity, and Morgan Stanley Alternative Investment Partners.
SAV, which was founded in 2001 as provider of credit cards to consumers who are overlooked by mainstream financial services providers, has already opened more than 150,000 credit card accounts for its lead product the aqua MasterCard and plans further expansion.
The company is managed by a specialist team from within the credit card industry and is built around information-based risk management techniques. SAV has developed its own underwriting and account management models which allow it to operate successfully in its target market.
Richard Langstaff, SAV Chief Executive Officer and founder, said: “This is a major landmark in the development of SAV Credit and we are delighted to have completed this major acquisition.
“We have extensive experience of the credit card market and have built specialist expertise in growing and managing credit card portfolios. This deal enables us to transfer our expertise to the marbles brand.
“We regard this deal as a vote of confidence from shareholders in our plans for expansion. We are delighted to welcome The Royal Bank of Scotland which has provided the debt facility for this deal.”
Steve Britain, Head of Consumer Cards, HSBC Bank plc said "We are fortunate to have a number of strong brands with which to grow our cards business in the UK.
“These include HSBC and first direct and, through our relationships with major retailers, M&S and John Lewis. The marbles and Beneficial brands are not a core part of this strategy, and accordingly, we are pleased to have sold the portfolios to SAV."
HSBC is one of the UK’s top four card issuers, with over 10 million cards in issue and receivables of £8 billion.
For further information please contact:
Jonathan Flint / Kevan Reilly
Citigate Dewe Rogerson
Tel: 020 7638 9571
About SAV Credit
SAV Credit, a financial services business built by a management team from within the credit card industry, has developed the aqua credit card for the underserved market in the UK. SAV was founded in January 2001 by Chief Executive Richard Langstaff, who has held senior investment banking roles with Citibank and Deutsche Bank. SAV is chaired by John Crewe, a former President of International Marketing and Development, Global Financial Services Group at American Express. It is backed by management and a group of leading private equity investors including Palamon Capital Partners, Electra Private Equity and Morgan Stanley Alternative Investment Partners.
To find out more about SAV Credit visit www.savcredit.co.uk
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27 September 2007: Global Consumer Finance Advisory also served as the financial advisor to Capital One on the transfer of its interest in its JV in Spain to its partner, Bankinter, previously announced last month
27 September 2007 – English translation of Bankinter company press release
Bankinter decides with Capital One to take over its consumer finance joint venture
· On the basis of the good progress of its results and expectations of growth.
· The management of the business will be carried out, from now on, by Bankinter Consumer Finance.
· 300 million euros in customer receivables and 290,000 customers are the result of a strategic alliance that it began in 2001.
Bankinter has reached an agreement with Capital One Bank (Europe) PLC in the strategic alliance that dated from the year 2001, when they had formed companies for the joint management of the business of providing financing consumers through credit cards and loans.
With an accumulated investment to June of 2007 of more than 300 million euros in customer receivables, created primarily through the marketing of revolving credit cards branded “Capital One of Bankinter,” and with almost 290,000 clients already acquired, Bankinter will continue to depend on the efficient and controlled growth of its consumer finance business. Therefore, exerciesing its rights under the agreement and based on the good progress and perspective of the business, Bankinter has reached an agreement with Capital One, given the good perspective of this business, to give full control to Bankinter.
Bankinter will continue with this line of business and continue to leverage the management model used until now and that had already reported good results to both organizations. The management of this business will be carried out by Bankinter Consumer Finance. Bankinter will get the human resources that came from successfully working with this line of business from the beginning, and has the materials necessary to sustain the independent form its management within the framework, in any case, of the general policies of the bank in the matter of risk, credit investment, return on investment and management of the delinquencies.
In coming months all cards will be modified to adapt them to the new mark and image of Bankinter Consumer Finance.
Below is the HSBC / SAV story as reported by the Financial Times on 31 October 2007
HSBC has sold part of its UK credit card book including Marbles, the online credit card business, for £385m.
The bank has sold 338,000 credit card accounts branded as Marbles and Beneficial to SAV Credit, a specialist lender founded in 2002 by Palamon Capital Partners, the private equity group.
SAV targets co-called “near-prime” customers who are rejected by mainstream banks.
It already has 150,000 credit card customers for its aqua Mastercard account and believes there are further opportunities in the UK to pick up loan books.
Marbles was launched in 1999 as one of the first UK online credit cards. In 2003 HSBC acquired Beneficial and Marbles as part of its acquisition of Household, the US consumer finance group.
The Beneficial credit card book is focused on people with poor or unusual credit records, though Marbles targets mainstream consumers.
HSBC said on Tuesday it was selling the credit card portfolio because it was non-core and it has developed its own branded credit card business in recent years.
The bank has also been expanding Marks and Spencer Money which it acquired in 2004.
HSBC is one of the top four card issuers in the UK with 10m cards and receivables of £8bn.
It is thought the loan book being sold has receivables – or loans outstanding – of about £350m-£450m and is being sold with a small premium on top.
HSBC’s move follows other banks, which have been selling off parts of their credit card books in the past year to improve profitability.
This year Barclays sold off part of its subprime credit card business to CompuCredit Corporation, a US credit card company, for about £390m.
The disposal was part of an attempt by Barclays to bolster profits at Barclaycard, the UK’s biggest credit card issuer where 2006 profits fell 40 per cent to £382m.
In the first few years of the decade, low interest rates meant that banks lent aggressively to consumers in the form of loans and credit cards and were seeing a return on assets of about 5-6 per cent.
However, in the past two years, banks have reined back on credit card lending because of rising bad debts as consumers have struggled to repay loans.
The SAV deal is being funded by a new debt facility from Royal Bank of Scotland and by SAV’s existing private equity partners, including Palamon, Electra Private Equity and Morgan Stanley Alternative Investment Partners.
Leigh Allen advised SAV Credit on the sale.
Copyright The Financial Times Limited 2007
Below is the Capital One story as reported by Mergermarket
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Headline :
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Bankinter takes over Capital One's consumer financing business
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Main body :
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Bankinter, the listed Spanish bank, has taken over Capital One Bank (Europe) consumer financing business, through its unit Bankinter Consumer Finance. According to the company announcement, the deal includes EUR 300m personal loans and credits to consumers and 290,000 clients.
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Source :
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Company press release(s) as reported by Mergermarket
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Size :
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> 100m (USD)
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Value :
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424 m USD (value of target's consumer credits)
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Stake Value :
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More than 30% inclusive
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Grade :
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Confirmed
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Alert :
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Mergermaket Company Watch List
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