Providian to Sell Loan Proceeds to J.P. Morgan
Bloomberg News
Providian Financial Corp., the sixth-biggest U.S. Visa and MasterCard issuer, agreed to sell its proceeds from $8.2 billion in credit card loans to J.P. Morgan Chase & Co. to raise cash and appease regulators.
The loans, about a quarter of its business, are with Providian’s most creditworthy customers. The San Francisco-based company is still trying to find a buyer for $3 billion in loans to customers with poor or short credit histories.
Federal regulators demanded in November that Providian improve its capital ratios--measures of the company’s cushion against unexpected loan losses--after profit plunged because more customers with blemished credit couldn’t pay their credit card bills.
Providian shares fell 46 cents to $4.33 on the NYSE.
