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June 07, 2011

  • News:  Regions Buys $1Billion Card Portfolio 

    Regions Bank has struck a deal with FIA Card Services to acquire the $1 billion Regions-branded credit card portfolio. The unit of Regions Financial Corp., which is based in Birmingham, Alabama, said it would buy the card business from FIA, which is a subsidiary of Bank of America Corp and hope to close the deal by June 30. The company said the portfolio of about 500,000 existing Regions credit card customer accounts will help speed up efforts to improve the banks balance between consumer- and commercial-loan portfolios to help diversify revenue streams and better serve customers. Grayson Hall, the CEO, said in a statement the bank has been able to attract new checking customers over the pay two years and that has helped to build a strong platform for operating the credit card business successfully.

    Experts note that Regions has struggled with real estate exposure in the Southern markets as many areas were hurt as a result of the Gulf of Mexico's oil spill last year. Revenue growth has diminished as a result of new regulations that restrict fees. Adding the credit card portfolio is an important component to their strategy to build "broader and deeper relationships with our customers", according to John Owen, head of consumer services for Regions. Terms of the deal were not disclosed but Regions said its credit card customers would experience "minimal impact."

    FIA Card Services will continue to send bills and collect payments for the credit card customers, which is known in the industry as servicing the accounts, until the middle of 2012 under the agreement. FIA was created in 2006 by combining the former MBNA America Bank and other Bank of America assets. Regions Bank has $132 billion in assets and is one of the nation's largest full-service providers of consumer and commercial banking. They operate 1,800 branches in 16 states across the South, Midwest and Texas.

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