The fintech Oportun has agreed to sell its credit card portfolio to Continental Finance, a credit card marketer and servicer, to drive profitability, the company announced last week.
Continental Finance has agreed to acquire Oportun’s Visa credit portfolio with its partner bank, The Bank of Missouri, according to the press release.
The deal, announced during the fintech’s second-quarter earnings call without disclosing the acquirer's name, is expected to close on or around Nov. 10 instead of by the end of the third quarter. The revised closing date means the sale's impact on adjusted earnings before interest, taxes, depreciation and amortization in 2024 has been revised to roughly $2 million — down from the previously projected $4 million, Oportun said.
After adjusted EBITDA, Oportun expects “favorability” resulting from the credit card sale to continue to be around $11 million in 2025. The company did not disclose the sale’s dollar amount.
“The transaction will simplify our product portfolio and enhance our focus on our three core products: unsecured personal loans, secured personal loans, and our award winning Set & Save savings product,” Oportun CEO Raul Vazquez said during the company’s second-quarter earnings call in August. “We ran a competitive sales process that resulted in multiple bids, and we selected the best proposal.”
The Continental Finance team is working with Oportun “to ensure a seamless transition of their customers onto our platform” with the goal “to continue to provide exceptional, personalized service to these valued customers for many years to come,” Tamer El-Rayess, Continental Finance’s board chairman, said in a statement.
Oportun declined to comment beyond the press release.
Oportun began cost-cutting efforts in the third quarter of 2022, the company said. The firm’s second-quarter operating expenses were $109 million — down 20% year-over-year — and the company expects to reduce that to $97.5 million or less by the fourth quarter.
The company recorded a loss of $31 million in Q2, compared with a $15 million loss in the prior-year quarter, the company said.
The Continental Finance deal resulted in an adverse $36 million fair value adjustment to the credit card portfolio, Vazquez noted during the Q2 earnings call.
That brought the company’s net revenue in the second quarter down to $60 million, a 49% year-over-year decrease, Oportun CFO Jonathan Coblentz said during the earnings call.
Continental Finance has managed more than 5.3 million credit cards since its founding in 2005. The firm aims to serve consumers left out of traditional credit card programs.
