A decade after buying credit card company MBNA, Bank of America is selling off the last vestige of the company’s international operations.
Bank of America said Tuesday it’s selling its U.K. consumer credit card business to Lloyds Banking Group, the latest move by CEO Brian Moynihan to shed non-core parts of the company.
Charlotte-based Bank of America acquired the U.K. business through its 2006 purchase of Delaware’s MBNA Corp., a $35 billion deal forged by Moynihan predecessor Ken Lewis.
Bank of America first disclosed plans to exit its U.K. and Ireland credit card businesses in 2011. Since then, the bank has sold other credit card units it acquired from MBNA, including operations in Spain and Canada.
The latest sale will eliminate the last group of consumer credit card customers that Bank of America serves outside the U.S.
It also underscores Moynihan’s continued push to get rid of non-core assets under a strategy to simplify the second-largest U.S. bank by assets, which became bloated following years of acquisitions.
Lloyds said it is buying the credit card business for about $2.4 billion in cash. The British bank said the deal will expand its U.K. credit-card market share from 15 percent currently to 26 percent.
Bank of America said the deal is expected to close by mid-2017 following regulatory approval. The bank said the U.K. credit card portfolio has about $10 billion in receivables and that it expects to record a “minimal” after-tax gain from the sale.
The Charlotte bank said it will maintain its credit card business for large commercial clients, which is not impacted by Tuesday’s deal.
The Lloyds sale comes as Moynihan, CEO since 2010, is pushing to do more business with the bank’s existing customers. Bank of America has no retail branches in the U.K., making it challenging to grow its consumer business there.
The planned sale also comes as big U.S. banks are under regulatory pressure to make themselves easier to unwind in a period of financial distress without relying on taxpayer funds.
Banks must show how they would avoid such bailouts through “living wills” submitted to regulators.