Lloyds to buy MBNA credit card business for £1.9bn
Lloyd's Bank said it was buying credit card business MBNA from Bank of America for £1.9bn.
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The price includes £0.8bn of acquired equity and assumes £240m for future PPI claims. Lloyds said it would take it's share of the UK credit card market to 26% from 15%.
The deal will deliver a £650m, or 4%, a year (c.4%) increase to group revenues and will enhance group net interest margin by around 10 basis points annually.
“There is also significant opportunity for cost synergies, currently expected at £100m run rate per annum within two years, representing 30% of the 2015 MBNA cost base,” Lloyds said.
“The transaction is consistent with the group's stated strategic ambitions of growing in consumer finance and will enable the group to enhance its position and offering within the UK prime credit card market.”