£1.9bn buyout of credit card book is a welcome emergence from restructuring, but ominous display of the bank’s power
There are two ways to look at Lloyds Banking Group’s £1.9bn purchase of the MBNA credit card book from Bank of America. The first is to applaud Lloyds’ escape from the hell of restructuring and provisioning. The bank hadn’t made an acquisition since the miserable crisis-era grab of HBOS, the deal that came with a state-sponsored bailout. Now its board can buy assets again, rather than obsess about detoxifying the balance sheet.
This cheerful interpretation is not to be sniffed at. Lloyds has taken £17bn in provisions for mis-sold payment protection insurance since 2011, sold most of its operations outside the UK, demerged TSB and cut costs. The exercise has been a success and the contrast with Royal Bank of Scotland is stark. The Treasury’s stake in Lloyds has been cut to 7%, and could be zero within six months. At RBS, the state is stuck at 73%.
Related: Lloyds snaps up MBNA for £1.9bn
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