British banking group to acquire Chester-based MBNA for £1.9bn

Cheshire-based consumer credit card business MBNA is set to be acquired by Lloyds Banking Group in an eight-figure deal.

Lloyds has this morning (December 20) announced plans to purchase the Chester firm from FIA Jersey Holdings Limited, a subsidiary of Bank of America, for £1.9bn.

MBNA comprises gross assets of around £7bn and is expected to deliver strong financial returns by strengthening Lloyds’ consumer finance offer, providing a £650m increase to the banking group’s yearly revenues.

During H1 2016, MBNA’s gross assets generated a post-tax profit of £123m.

Subject to competition and regulatory approval the transaction, which will boost Lloyds’ market share in credit cards from 15% to around 26%, is forecast to complete by the end of H1 2017.

Lloyds’ group chief executive, António Horta-Osório, said of the transaction: “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.”

He added: “Our low cost to income ratio and proven integration capabilities will deliver significant synergies and value to our shareholders.”

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