Bidders Circle £7bn Credit Cards Giant MBNA

MBNA, one of Britain's biggest credit card issuers, is being circled by potential buyers after being put up for sale by its US owner.

Sky News has learnt that Bank of America (Swiss: BAC.SW - news) (BoA) has initiated plans for an auction of MBNA, which has a loan book of about £7bn - equivalent to roughly 11% of the UK credit card market.

The sale comes more than four years after a previous sale attempt by BoA attracted a failed offer from Apollo Management, a private equity firm, and an arm of Goldman Sachs (NYSE: GS-PB - news) , the Wall Street bank.

City sources said that BoA had decided to try again to offload MBNA, which employs well over 1,500 people at its base in Chester and has more than five million UK customers.

A deal to buy the business, which issues cards under the brands of dozens of partners such as Premier League football clubs Arsenal and Manchester United (NYSE: MANU - news) , would be likely to value it at hundreds of millions of pounds and possibly more, insiders suggested on Friday.

A successful exit for BoA would also underline the ongoing efforts of global banks to dispose of non-core operations amid regulatory reforms introduced since the financial crisis of 2008.

An MBNA spokesman said the company, which also issues cards branded with charities such as the British Heart Foundation, had made a profit of £166m in 2015.

Its parent's plan to sell the business comes as demand for contactless payment products soars, with card-issuers scrambling to develop sophisticated mobile wallet services.

MBNA, which sponsors the rugby union team Sale Sharks, announced in March that it would begin offering Google's Android Pay service to consumers when it launches later this year.

MBNA's sale process in 2012 also attracted interest from Barclays (LSE: BARC.L - news) , which owns Barclaycard, the UK's biggest credit card provider, and Virgin Money.

It (Other OTC: ITGL - news) is unclear whether a takeover of MBNA by Barclays would be approved by competition regulators, while Lloyds Banking Group (Other OTC: LLOBF - news) and Virgin Money are expected by analysts to be interested in exploring bids for the credit card group this time around.

In 2013, Virgin Money acquired a £1bn portfolio of credit card assets operated under its own brand from MBNA, two years after it also bought Northern Rock's "good bank" from the Government.

BoA, MBNA and the potential bidders declined to comment on the sale process (Other OTC: UBGXF - news) .