Belfast Telegraph

Lloyds completes takeover of MBNA credit card firm

By Ravender Sembhy

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.

Belfast Telegraph