Lloyds completes £1.9bn purchase of credit card firm MBNA
Lloyds Banking Group has completed its acquisition of consumer credit card business MBNA from Bank of America after regulators rubber-stamped the £1.9 billion deal.
The banking giant said MBNA, which holds assets of £7 billion, would deliver strong financial returns and bolster its position in the UK prime credit card market.
Antonio Horta-Osorio, group chief executive of Lloyds, said MBNA was a "good fit" with the bank's credit card business.
He added: "The acquisition, which is funded through strong internal capital generation, increases our participation in the UK prime credit card market, where we were underrepresented, and strengthens our position as a UK-focused retail and commercial bank."
The deal will provide a £650 million-a-year boost to Lloyds' group revenues, while enhancing the net interest margin by around 10 basis points per year.
Lloyds aims to deliver cost savings of around £100 million per year within two years at MBNA, representing 30% of the unit's cost base.
The announcement comes weeks after Lloyds was fully privatised, with the Government selling its final stake in the lender.
MBNA, which booked post-tax profits of £123 million in first half of 2016, will be kept as a challenger brand and will help Lloyds strengthen its credit cards market share from 15% to 26%.