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June 2, 2017

Lloyds Banking completes acquisition of MBNA

Lloyds Banking Group has closed the acquisition of British consumer credit card business MBNA from FIA Jersey, a subsidiary of Bank of America.

The acquisition follows the receipt of regulatory and competition approval.

The transaction is expected to enhance Lloyds offering within the UK prime credit card market through the MBNA brand. It will also increase the bank’s net interest margin by nearly 10bps per annum and approximately 5bps benefit to net interest margin in 2017.

Lloyds said that the deal was funded through organic capital generation with around 80 basis points of common equity Tier 1 (CET1) capital retained on its balance sheet since 2016.

Lloyds Banking group CEO António Horta-Osório said: “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 MBNA brand and portfolio are a good fit with our existing card business and we will focus on providing its customers with excellent service and value. Our proven integration capabilities and low cost to income ratio will deliver significant synergies and value to our shareholders.”

In December 2016, Lloyds agreed to purchase MBNA for £1.9bn from Bank of America.

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