LONDON, Dec. 20 (UPI) -- Lloyds Banking Group on Tuesday announced plans to purchase Bank of America Corp.'s credit card business, MBNA, for $2.35 billion in the British bank's first major acquisition since a government bailout during the 2008 financial crisis.
Lloyds will add MBNA's 5 million customers and a loan book of around $8.65 billion to boost its market share in credit cards in Britain from 15 percent to 26 percent and increase group revenue by $803 million, the company said in a statement.
Lloyds, which is partly owned by the British government, had been banned from acquisitions after the bailout. The government is slowly selling off its remaining 6.9 percent stake in the bank.
Bank of America bought MBNA in 2006 for $35 billion.
Lloyds hopes to complete the deal by the end of the first half of next year and will keep the MBNA brand separate from its other card products.
"The acquisition, funded through strong internal capital generation, increases our participation in the expanding U.K. credit card market with a multibrand strategy and advances our strategic aim to deliver sustainable growth as a U.K.-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."
The company expects to save $123 million year in synergy savings.
Lloyds, which was founded in 1995, has 88,000 employees and revenue of $14.6 billion in 2015, according to its annual report.
Its credit card business is expanding in light of economic uncertainty because of the Brexit -- Britain's plans to leave the European Union.
Lloyds will be "broadly doubling up its exposure to credit cards at a particularly benign point in the bad debt cycle, and ahead of a potential slow-down in the U.K. economy once the terms of the U.K.'s exit from the EU are reached," Gary Greenwood, an analyst at Shore Capital in Liverpool, England, wrote in a note to clients. "The risk cannot be ignored."