Lloyds completes takeover of MBNA credit card firm
Lloyds Banking Group has completed its acquisition of consumer credit card business MBNA from Bank of America after regulators rubber-stamped the £1.9bn deal.
The banking giant said MBNA, which holds assets of £7bn, 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 under-represented, and strengthens our position as a UK-focused retail and commercial bank."
The deal will provide a £650m-a-year boost to Lloyds' group revenues, while enhancing the net interest margin by around 10 basis points per year.
Lloyds aims to deliver annual cost savings of around £100m within two years at MBNA - 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 £123m in the first half of 2016, will be kept as a challenger brand.