“We have carefully evaluated our options and decided that – as one of the nation’s leading retail banks – we will issue credit cards directly,” said Ben Jenkins, President of Wachovia’s General Bank division. “We look forward to providing an attractive credit card product for the 13 million households and businesses Wachovia serves. This also offers us a great opportunity to gain synergies with our debit and ATM card businesses and ensure we are providing the best service to our customers and the best return for our shareholders. Wachovia and MBNA have enjoyed a successful credit card partnership since 2000, and we believe it is in the best interests of both companies to undertake an orderly exit from this partnership.”
Wachovia conducted an in-depth analysis of its credit card business after the public announcement of the MBNA acquisition by Bank of America. As a result, Wachovia will formally conclude its joint marketing agreement with MBNA nine months after the proposed Bank of America/MBNA merger, which is expected to occur in January 2006. Upon consummation of that merger, MBNA is required to pay Wachovia a $100 million termination fee, which will offset Wachovia’s cost to re-enter the business.
Wachovia will work closely with MBNA to ensure that customers’ privacy is protected and that Wachovia customers will continue to receive the high level of customer service they have come to expect. There are no changes to customers’ accounts at this time, and any anticipated changes they may experience would be communicated well in advance.
In August 2000, MBNA and First Union signed an agreement under which MBNA marketed personal, business, corporate and purchasing card products and services to the bank's customers. MBNA subsequently acquired Wachovia’s portfolio in April 2002 after the September 2001 merger of First Union and Wachovia. In June 2004, MBNA acquired SouthTrust’s credit card portfolio at the same time Wachovia announced its acquisition of SouthTrust.
Wachovia Corporation (NYSE:WB) is one of the largest providers of financial services to retail, brokerage and corporate customers, with banking operations from Connecticut to Florida and west to Texas, and retail brokerage operations nationwide. Wachovia had assets of $532.4 billion, market capitalization of $73.9 billion and stockholders’ equity of $46.8 billion at September 30, 2005. Its four core businesses, the General Bank, Capital Management, Wealth Management, and the Corporate and Investment Bank, serve 13 million household and business relationships primarily through 3,138 offices in 15 states and Washington, D.C. Its full-service retail brokerage firm, Wachovia Securities, LLC, also serves clients through 702 offices in 49 states and five Latin American countries. The Corporate and Investment Bank serves clients in selected industries nationwide. Global services are offered through 40 offices around the world. Online banking and brokerage products and services also are available through Wachovia.com.
