The objective of the collaboration is to become the market leader in the region by offering competitive cards and card-based consumer credits.
The joint venture, which will be headquartered in Stockholm, Sweden, will consist of ForeningsSparbanken’s Swedish credit cards operations and its subsidiary EnterCard AS in Norway. It will be jointly owned by ForeningsSparbanken and Barclays, with ForeningsSparbanken retaining a 60% share of the votes and Barclays, 40%. There will, however, be joint decision making in all key areas.
Sales will be handled by ForeningsSparbanken’s distribution network in Sweden, while EnterCard AS will serve Norwegian customers, including many savings bank customers.
The credit card market in Sweden and Norway is currently estimated at 2-3 million units, but the Nordic market potential is believed to be upwards of 10 million cards. The market for consumer credits exceeds SEK40 billion.
With access to Barclays’ skills and extensive international experience in credit cards and consumer credits, we will be able to serve the customers with competitive new card products. The JV will substantially strengthen ForeningsSparbanken’s market position in credit cards and have a strong position in the Nordic market, said Jan Lidon, president and CEO of ForeningsSparbanken.
The sale of ForeningsSparbanken credit card operation to the new joint venture, for around SEK1.0 billion, will result in an estimated capital gain of SEK800 million for the group. The gain is expected to affect its third quarter results of 2005.
The agreement is subject to regulatory approval.
