Lloyds Banking Group agrees £1.9bn deal to buy MBNA's UK credit card business

The move is designed to help Lloyds grow its presence in the consumer finance market and will enable it to "enhance its position and offering within the UK prime credit card market", the bank said. MBNA is currently owned by a subsidiary of Bank of America.

The bank said the addition of MBNA to its business will deliver a £650 million increase to the Group's annual revenues. Post-transaction Lloyds Banking Group will own an approximate 26% share of the UK credit cards market. It currently has a market share of approximately 15%, it said.

António Horta-Osório, Lloyds Banking Group chief executive, said: "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. Our low cost to income ratio and proven integration capabilities will deliver significant synergies and value to our shareholders," he said.

Lloyds said it expects to complete its acquisition of MBNA "by the end of the first half of 2017". Completion of the transaction is subject to "competition and regulatory approval", it said.

Lloyds said it expects to retain the MBNA brand when its acquisition is completed.

"MBNA’s diversified distribution model, along with its data analytics capability, digital strength and well-recognised brand, will be complementary to the Group’s existing capabilities and provides further opportunities for growth and delivering excellent customer service," Lloyds said.