UNITED States private equity group Apollo Global Management and Goldman Sachs have entered the auction for Bank of America’s Chester-based British and Irish credit card portfolios.

The US groups have joined forces to bid for the MBNA Europe Bank business – part of Bank of America’s MBNA credit card brand – a newspaper reported yesterday, citing two people close to the situation.

That pitches them against Virgin Money, the banking arm of billionaire entrepreneur Richard Branson’s Virgin Group empire, which hopes to acquire the part of MBNA’s UK and Irish credit card book that is made up of its own customers.

Virgin Money, which last week agreed to buy Northern Rock, has run its credit card operations in partnership with MBNA since 2002, and its customers account for around £3.5bn of the total order book.

As part of the deal, Virgin has the right to buy this part of the business in the event of a sale. Goldman has not yet decided whether to contribute equity or just fund Apollo’s offer with loans from its debt funds, it was reported.

None of the companies were immediately reachable for comment.

Bank of America agreed in August to sell its Canadian credit card business to Toronto Dominion Bank, Canada’s second-largest lender, for around $8.5bn.

At the same time, the American bank said it was reviewing its UK credit card operations. The firm, which currently employs 3,300 people at Chester Business Park, wants to withdraw from overseas credit card operations, preferring instead to focus its efforts on the US credit card market.

In the August statement, Bank of America said it would consider closing its European credit card operation if it could not find a buyer for the business.

News that the Goldman Sachs backed Apollo, which describes itself as a contrarian investor, has joined the bidding fray should improve the prospects of a trade sale.