Big-box retailer Target Corp. (NYSE: TD) today announced that it has agreed to sell its credit card business to TD Bank Group (NYSE: TD) for the value of its receivables, currently about $5.9 billion. In January, the retailer failed to strike a deal for the business.
Target will retain the servicing of its REDcard rewards program and its Visa card accounts. The sale includes only the loan portfolio. Under the agreement, TD will for seven years “underwrite, fund and own future Target Credit Card and Target Visa receivables in the United States.”
TD and Target will share the profits from the portfolios, with Target getting the larger piece, presumably to offset the servicing costs.
Target expects to report a third quarter pretax gain of about $150 million as a result of the sale and at closing expects to recognize an additional pretax gain of $350 to $450 million. The sale is expected to close in the first half of 2013.
Target’s shares are down about 0.3% at $62.05, in a 52-week range of $47.25 to $65.80.
TD’s shares are down 1.4% at $82.58, in a 52-week range of $65.20 to $86.56.
Paul Ausick
The Average American Is Losing Momentum on Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%* today. Checking accounts are even worse.
But there is good news. To win qualified customers, some accounts are paying nearly 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.