6 June 2005
We want some plastic
Washington Mutual, the nation's largest S&L, has announced the acquisition of Providian Financial, one of the top ten card issuers, for $6.45 billion.
Providian is profitable these days, after a near-death experience brought on by massive defaults among its largely-subprime customer base and the company's own manipulation of payments to maximize late fees, which drew lawsuits. Forced into a corner, Providian shed most of its lower-quality accounts; they have also entered into partnerships with eBay and PayPal.
Washington Mutual, perhaps mindful that it has no experience running a credit-card operation, plans to leave the Providian apparatus largely in place; layoffs once the deal closes are unlikely.
Analysts are expecting more mergers in Plasticland, with huge MBNA and less-huge Metris believed to be in play.Posted at 3:30 PM to Common Cents