The takeover of credit card issuer MBNA by the Lloyds Banking Group has now been completed, hugely boosting the banking group’s share of the credit card market.
The ?1.9 billion purchase from Bank of America is the first major acquisition made by Lloyds since the financial crisis in 2008 which led to the bank being bailed out by government money.
The move increases Lloyds share of the UK credit card market from 15 per cent up to 25 per cent, pitching the banking group just behind Barclaycard, who with 27 per cent have long dominated the credit card sector.
Lloyds Banking Group chief executive, Ant?nio Horta-Os?rio, confirmed that the bank had been ‘underrepresented’ in the credit card sector before and the move would strengthen its position as a UK-focused retail bank.
Banking analysts at Barclays agreed that buying MBNA supports a strong outlook for Lloyds future.
MBNA is one of the largest credit card companies in the UK and has built up many long-standing relationships with football clubs, including premiership giants such as Arsenal and Liverpool.
The takeover completion further confirms May 2017 as a historic month for Lloyds Banking Group.
Earlier in the month the British government confirmed that they had sold the last of its shares held since the ?20.3 billion rescue of the banking group during the global financial crisis of 2008.
This means that Lloyds Banking Group is now back entirely in private hands, allowing more freedom for acquisitions and expansion and competing on a level playing field with other financial institutions.
Royal Bank of Scotland, the other UK bank rescued by the government, is proving to be a much longer project. 72 per cent of Royal Bank of Scotland shares are still held by the government, with no end in near sight for the rescue project.