Lloyds has announced that it will purchase MBNA — a credit card firm currently owned by Bank of America — for $2.35 billion. The move represents the bank’s first big acquisition since the 2008 financial crisis.
MBNA currently holds assets worth $8.64 billion and is expected to increase group revenues by about $800 million per year, according to LLoyds.
“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 Antonio Horta-Osorio.
Lloyds has also indicated that MBNA will retain its own branding and cardholders would not transfer to a new card — they will also continue to carry different rates than LLoyds cards.
MBNA operates primarily online and on mobile.
Lloyds beat several other comers for the MBNA business, including Santander and private equity firm Cerberus.
Lloyds clearly has big expectations for the partnership, with synergies expected to save as much as 30 percent of the firm's annual operating budget. The move comes as LLoyds is in the midst of a massive restructuring that will cost as many as 1,200 jobs by the time it is complete.
Lloyds has not made a major acquisition since 2008 when it took on collapsed bank HBOS in September as the financial crisis was unfolding in real time. That deal didn't work out quite the way anyone wanted it to — the government in the U.K. ended up having to step in to bail out LLoyds.
Initially that gave the British government a 43 percent sake in Lloyds — though that nearly half ownership has been wound back to around 7 percent public ownership today.
The MBNA deal with BoA is expected to close in the early part of 2017.