MasterCard plans a Wall Street float

By DAILY MAIL REPORTER
Updated:

 

GIANT credit card issuer MasterCard is planning a float on Wall Street in a move aimed at protecting its bank owners from legal and regulatory threats.

At the moment, MasterCard is owned by 1,400 financial institutions worldwide, including major UK banks. The owner banks will retain 41pc after the float.

In a filing with US regulator the Securities and Exchange Commission, MasterCard said the float would bring a more stable base and would address 'perceived conflicts of interest.'

Its move comes after controversy in Britain over credit-card companies cashing in on consumer borrowing.

MasterCard and arch-rival Visa International, led by former Bradford & Bingley boss Chris Rodrigues, also face lawsuits in the United States after the Supreme Court ruled last year that they had broken competition rules. They could face multi-million dollar claims.

MasterCard said it would hold onto £365m ($650m) to put it in a position to 'defend our interests in the legal and regulatory arena'. In the UK, the Office of Fair Trading said last November that banks were fleecing shoppers of £1bn a year through unfair handling fees on their MasterCard and Visa transactions.

Under the float plans, some 49pc of the company, which has $3bn (£1.68bn) in annual revenues, will be offered to investors. The remaining 10% will go into a new charitable foundation.

MasterCard, aptly based in Purchase, New York, recently reported an 82pc increase in second-quarter net income to £67.4m ($120m). The company was founded in the mid-1960s as a membership association but converted in 2002 to a privately-held company. Its sentimental 'Priceless' ad campaign was launched in 1997.

The international card industry is currently undergoing a wave of dealmaking. Earlier this year Bank of America announced a takeover of MBNA, which has extensive operations in the UK.

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