Lloyds is to buy credit card firm MBNA from Bank of America for £1.9bn, in the UK bank’s first acquisition since the 2008 financial crisis when it was bailed out by the UK government.
MBNA, which holds assets of £7bn, would increase group revenues by £650m a year, Lloyds said. The bank’s share of the UK credit card market will increase from about 15% to 26% after the transaction. Lloyds has since reduced the level of state ownership from 43.4% to just under 7% by share sales to institutional investors.
Lloyds will keep MBNA’s credit card brands separate from its own and cardholders would not transfer to a new card, explaining: “MBNA is a UK credit card business with a high quality customer base founded upon sound underwriting principles and credit management, which aligns well with the Group’s strategy to deliver sustainable growth through a multi-brand strategy. The MBNA brand will be maintained as a challenger brand further enhancing our customer offering.”
The deal is expected to be completed in the first half of 2017.