Lloyds Bank buys credit card firm MBNA
Lloyds said the acquisition will “enhance its position and offering” within the prime credit card market.
The deal, which is expected to be completed in the first half of 2017, will take the bank’s market share in credit cards from 15% to 26%.
“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,” said Lloyds chief executive António Horta-Osório.
Lloyds said the acquired MBNA business, which comprises gross assets of £7bn, is expected to “deliver strong financial returns” and create “significant value for shareholders”.
Lloyds shares rose 1% in early morning trading.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Lloyds is backing itself despite the uncertain economic outlook, and this deal will mean the bank has now cornered a quarter of the UK credit card market.
“This does mean a special dividend for 2016 has become less likely, but at the same time the additional earnings from the credit card book bolster the dividend-paying prospects of the bank in years to come.”