British bank Lloyds on Tuesday bought Bank of America's UK credit card division MBNA for 1.9 billion pounds in the first acquisition since its government bailout during the global financial crisis.
The deal, worth $2.4 billion or 2.3 billion euros, will bolster the group's position in Britain's prime credit card market, Lloyds Banking Group (LBG) said in a statement detailing its first purchase since 2008.
"The acquisition 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," said Chief Executive Antonio Horta-Osorio.
MBNA, which has assets of 7.0 billion pounds, was expected to deliver "strong financial returns" and create "significant" cost savings, the bank added.
"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," Horta-Osorio noted.
The deal, which will provide a 650 million-a-year boost to Lloyd's group revenues, remains subject to approval by regulators and is expected to complete in the first half of 2017.
Lloyds, which forecasts cost savings of approximately 100 pounds million per year within two years, added that it would maintain the MBNA card brand.
The lender will buy MBNA from Bank of America subsidiary FIA Jersey Holdings Limited.
Lloyds was rescued by the British government with 20 billion pounds of state money at the top of the notorious global financial crisis.
Lloyds Banking Group was created by a merger of Lloyds TSB and rival British lender HBOS. However, HBOS was saddled with toxic property investments, and LBG subsequently received the vast bailout.
The government gradually sold down its original 41-per cent stake in the bank and currently has a seven per cent holding. Recent media reports suggest it could offload the remainder next year.