Lloyds Banking Group is set to acquire MBNA, Bank of America’s UK credit card company, for £1.9 billion. The acquisition will be it’s first since it was bailed out by taxpayers in 2008.
It its expected that the acquisition will add around £650 million a year to group revenues, Lloyds said in a statement, and is also expected to have “significant opportunity” for cost synergies, expected at a £100m run rate within two years.
Lloyds’ group chief executive Antonio Horta-Osorio said The acquisition, funded through strong internal capital generation, increases our participation in the expanding UK credit card market with a multi-brand strategy and advances our strategic aim to deliver sustainable growth 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 low cost to income ratio and proven integration capabilities will deliver significant synergies and value to our shareholders.