First Chicago Buying Beneficial Bank Unit
CHICAGO (AP) _ First Chicago Corp. has agreed to buy Beneficial National Bank USA for $247 million cash in a move to substantially expand its credit card business, the banking company said today.
First Chicago, the parent company of First National Bank of Chicago, said it had signed a definitive agreement to acquire the Wilmington, Del. bank, a major bank card issuer, from Beneficial Corp.
Beneficial National Bank USA is the 12th largest issuer in the nation with $1 billion in credit card receivables and about $1.1 billion in assets.
The deal is subject to regulatory and legal approvals, and was expected to close in mid-1987.
Beneficial Corp. earlier this month said it was selling most of its insurance group and its credit card subsidiary in a major restructuring aimed at restoring profitability. The company said it expected to net about $750 million in gains from the sales.
Beneficial posted a net loss of $126 million in the third quarter ended Sept. 30.
First Chicago, with assets of $40.3 billion, is the nation’s fifth largest issuer of bank credit cards with 3 million customers and $3.4 billion in outstanding balances on card accounts.