Friends' credit card is a first

Life assurance company Friends Provident has introduced a new credit card for its customers in association with MBNA International Bank. To be offered initially to about 200,000 Friends Provident customers, it will be the first credit card offered by an Irish insurer.

The card will carry an annualised interest rate of 19.9 per cent. The move is part of the insurer's drive to add traditional banking products to its product range.

To establish market share, Friends Provident customers will be offered an introductory interest charge of 9.9 per cent on balances transferred from existing credit cards for the first six months after the new card account is opened.

The company is part of the Eureko Ireland group, which is targeting the traditional banking markets for expansion opportunities. The company recently made its first move into the traditional banking market when it set up a personal finance and leasing operation in Dublin.

The company, which as a life assurer sells investment products, is expected to add savings products in the short to medium term. Tentative plans include the development of a mortgage product, possibly through a joint venture arrangement.

In the longer term, the group may bring a new foreign bank into the Irish market through its membership of the Eureko Alliance of 14 European insurance companies. The banks owned by Dutch insurer, Achmea, or Swedish insurer, Wassa, may be interested in operating in the Irish market.

"The credit card facility that we are offering both existing and potential customers is just one in a long line of comprehensive and innovative financial services products we will be making available to Friends Provident customers in the coming years," according to the managing director of Eureko Ireland, Mr Adrian Hegarty.

Friends Provident is part of the Eureko Ireland Group which includes the general insurer Celtic International. The group employs 570 people in Ireland and has total assets of £1.2 billion. Eureko Ireland is part of the Eureko Alliance, a grouping of European insurers with 33,000 employees in 14 countries and a total asset base of £64 billion.