Credit card firm MBNA sold to Lloyds for £1.9bn
Credit card firm MBNA is to be taken over by Lloyds. The firm’s current owner, Bank of America, has agreed to sell it for £1.9 billion. The deal is expected to close in H1 2017.
The bank says MBNA is “a good fit” with its own credit card business and will increase group revenues by £650 million a year.
It will also boost Lloyds’ share of the UK’s credit card market to 26% (from the current 15%).
It is understood that Lloyds’ high street rival, Santander, and a US private equity firm, Cerberus Capital Management, were also interested in acquiring MBNA.
MBNA, which operates primarily via digital channels, holds assets of £7 billion. Lloyds says no brand changes are planned. Customers won’t have to transfer to new cards either, it adds. Furthermore, MBNA will continue to have its own rates, separate from those set for Lloyds’ existing credit card business.
This is Lloyds’ first acquisition since the 2008 financial crisis. The bank has been going through an enterprise-wide restructuring and cost-cutting programme, including the separation of the TSB retail banking business (now owned by Spain’s banking group Sabadell), branch closures and layoffs.
At the height of the financial crisis, the UK government had a 43% stake in Lloyds, it now owns less than 10% and plans to shed the remaining stake in the course of 2017.