Bank of America investors welcomed the bank’s recent decision to sell all of its international credit card businesses in order to focus on its U.S. cards business.
Investors recently expressed their disappointment in the bank’s long term outlook after last week’s $10 billion lawsuit filed by the American International Group, according to Forbes.com.
AIG alleges that the defendants Bank of America, Merrill Lynch and Countrywide fraudulently misrepresented the quality of mortgages by providing false data when persuading the company to invest in 350 residential mortgage-backed securities.
After the lawsuit was filed, Bank of America’s stock plummeted 20 percent to $6.51 on Monday, according to LATimes.com.
In March, BOA decided to sell its Spanish credit card portfolio to Apollo Capital Partners. More recently, the bank has announced it will sell off its Canadian credit card business to Toronto-Dominion Bank and depart from its U.K. and Ireland credit card businesses.
Brian Moynihan, BOA’s CEO, said the company’s international card business under another brand was inconsistent with the company’s strategy of providing services to their core customer groups, according to Forbes.
The international card assets only added to the pressure on the bank’s balance sheet, which was already weighed down with the uncertainty of its massive mortgage portfolio.
Bank of America’s MBNA Canada unit, which issues MasterCard brand credit cards, has a loan portfolio worth $8.6 billion. The portfolio will be acquired by Toronto-Dominion Bank for $7.6 billion in cash while assuming liabilities worth $1.1 billion, according to Forbes.