Lloyds Banking Group has struck a £1.9bn deal to purchase credit card company MBNA from the Bank of America.
The takeover of MBNA, which holds assets of £7bn, is expected to increase the bank’s revenues by £650m per year.
The move will also see Lloyd’s share of the UK credit card market increase to 26 per cent from 15 per cent.
Lloyds, which is partly owned by the state, said the takeover creates the opportunity for cost savings, currently expected at around £100m per year.
Antonio Horta-Osorio, chief executive of Lloyds, said the acquisition will increase the bank’s participation in the UK credit card market.
He also said the MBNA brand and portfolio are a “good fit” with Lloyd’s existing card business, adding: “We will focus on providing its customers with excellent service and value.”
The acquisition is expected to be completed in the first half of next year.
Just last week, HM Treasury cut its remaining shareholding in Lloyds Banking Group to less than 7 per cent.
The share sale has been met with criticism, with the chief executive of Hargreaves Lansdown, Ian Gorham calling the plan "disgraceful and patronising".
katherine.denham@ft.com
