MBNA To Enter Canadian Credit Card Marketplace

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card lender in the US, will enter the Canadian credit card market by the first quarter of 1998 through a new bank, MBNA Canada Bank.

The Ottawa-based subsidiary of MBNA America Bank N.A. will market an MBNA MasterCard.

"By regulation, we can only issue one card in Canada as a bank, and have chartered a bank to do this," said spokesman Peter Frank. "We've looked at Canada for some time, and felt the time is now right to offer a competitive product."

Frank was loath to reveal detains of MBNA's Canada plans, but it seems obvious that direct marketing will be crucial part of the mix. For the 15 years of its existence, MBNA has heavily utilized direct mail, telemarketing and event promotion.

MBNA is heavily into affinity marketing, with more than 4,500 endorsements from membership groups and financial institutions in the US and the UK.

In the first half of 1997, the company acquired 310 new endorsements from organizations, on top of the 544 last year. During this time, 15.4 million cardholders were added, representing 12.4 million accounts.

Groups that endorse MBNA include the National Football League, Major League Baseball, the National Education Association, the Sierra Club, NASCAR, and Georgetown and Penn State Universities.

Frank noted that there will be an MBNA card as well as cards endorsed by other entities - commercial and noncommercial.

He declined comment on whether the entry into Canada will embrace the whole country, but did note that "we expect to hire some people fluent in French." He also would not discuss MBNA's list strategy to crack the Canadian credit

card market, which he called competitive.

As for the target demographic in Canada, Frank simply observed that in the US, the typical MBNA customer has an average household income of $60,000, is job-stable and pays bills on time. Most customers own their own home.

MBNA Canada Bank expects to employ 70 people at the end of the year and to eventually hire up to 1,000.

In the US, MBNA - in addition to being a credit card lender - provides retail deposit, consumer loan, insurance and card-acceptance services. It is the world's largest issuer of the Gold MasterCard.

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