There’s uncertainty for MBNA’s 1,700-strong Chester workforce this Christmas after it was confirmed the credit card operation is being bought by Lloyds Banking Group for £1.9bn.
LLoyds expects the take-over of the Bank of America subsidiary, which is based on Chester Business Park, will be complete by the end of the first half of 2017.
MBNA spokesman Mark Elliott said in a statement: “I wanted to let you know that our owners, Bank of America, have reached an agreement with Lloyds Banking Group for the sale of the whole MBNA business. The sale is subject to regulatory and other approvals.
“Of course, Lloyds Banking Group will be very familiar to you as a strong and stable player in financial services – in areas like banking, cards and insurance. It can boast a house of leading finance brands, each of which has its own place in the market. Its brands include: Lloyds Bank, Halifax, Scottish Widows, Bank of Scotland and Birmingham Midshires. This is a company with a long and impressive history.”
Appearing to offer a degree of reassurance for staff, he continued: “Lloyds like what they see: they like our people, our customer-focused culture, our prudent approach to credit management, our MBNA brand and our track-record in products, distribution, data analytics and digital.
“Lloyds also see a great fit between their existing credit card business and the MBNA business. For Lloyds, MBNA fits well into their group of brands and complements their existing customer base. In fact, MBNA would be the largest credit card brand in the enlarged Lloyds group. Those are some of the reasons why they are keen to make the MBNA brand a critical part of their business.
“It also happens that Lloyds Banking Group have a strong regional presence around the UK, with major operations in many locations including in Chester and the North West.”
He added: “Clearly, Lloyds have done their homework. They’ve reached their decision to acquire MBNA after a lot of detailed analysis. They have asked us a lot of questions and their attention to detail has been hugely impressive.
"We’ve built MBNA into a well-run and profitable business. As a result, we’ve found an enthusiastic new owner who sees MBNA as a strategic investment with great potential over the years ahead. A vote of confidence from a company like Lloyds means a lot.”
Commenting on the transaction, António Horta-Osório, Lloyds 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.”
Chester MP Chris Matheson told BBC Radio Five Live the deal ended the uncertainty over speculation about a deal but created uncertainty for the workforce given Lloyds, which is 7% owned by the taxpayer, intends to save £100m across the group.
MBNA also supports both Chester FC and the Chester RUFC rugby team as well as many good causes so he is also concerned about the impact if that ceases to continue under Lloyds.