With its credit card businesses on the auction block, UICI officially exited the card securitization industry last week. The company expects to find a buyer within the year, said Matt Cassell, a vice president at UICI
"Our intent would be to completely exit this business," Cassell said. "That includes the credit card bank, the credit card portfolio, the servicing unit, all the pieces we would exit."
Though UICI hasn't issued credit-card backed securities since 1998, the company had been an issuer since 1994, with two product lines: the ACE and AFCA credit card issuing businesses. UICI's master trust is currently at $140 million, in outstanding receivables.
According to recent report put out by the company, the credit card portfolio that UICI intends to sell is made up of approximately $300 million in credit card receivables, subject to a loan loss reserve of $108 million, which puts a $192 million value on the portfolio.
UICI, the parent company of United Credit National Bank, ran in to trouble earlier this year, after an examination was conducted by the Office of the Comptroller of the Currency. The examination followed an announcement on Dec. 9 that UICI was going to report heavy losses associated to its credit card unit, United CreditServ. The losses were primarily related to reserves associated with the ACE product.
When the company issues its pending fourth quarter report, UICI will announce a $247 million loss for the year 1999 in the credit card division.
Cassell explained that $147 million of that figure is related to operations in 1999. The other $100 million is reserved for exiting the business this year.