Lloyds Banking Group buys Bank of America credit card business MBNA for £1.9bn

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Lloyds Banking Group has swooped for consumer credit card business MBNA from Bank of America in a £1.9 billion deal.

The banking giant said MBNA, which holds assets of £7 billion, would deliver strong financial returns and bolster its position in the UK prime credit card market.

Antonio Horta-Osorio, group chief executive of Lloyds, said MBNA was a "good fit" with the bank's current credit card business.

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He added: "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 deal will provide a £650 million-a-year boost to Lloyd's group revenues, while enhancing the bank's group net interest margin by around 10 basis points per year.

Once it is given the green light by regulators, the tie-up is expected to be complete by the end of the first half of 2017.

The move will see Lloyds buy MBNA from Bank of America subsidiary FIA Jersey Holdings Limited, delivering cost savings of around £100 million per year within two years.

The savings would represent around 30% of MBNA's cost base in 2015, Lloyds said.