Source: Bank of America
Bank of America Corporation today received approval from the Board of Governors of the Federal Reserve System of its application to merge with MBNA Corporation. The merger is expected to close on Jan. 1, 2006.
With today's action, Bank of America has received approval from all necessary regulatory organizations as well as overwhelming approval from MBNA shareholders.
The merger will create the largest credit card issuer in the United States as measured by balances. The new Bank of America Card Services organization will have more than 40 million active U.S. accounts and nearly $140 billion in managed balances. Bank of America is already the leader in debit card transactions.
"We are excited about how the combination of MBNA and Bank of America will benefit our customers and investors," said Ken Lewis, chairman and CEO of Bank of America. "We look forward to integrating MBNA's world-class sales, marketing and innovation capabilities with Bank of America's scale, distribution channels and low cost structure."
"MBNA's marketing and product development capabilities are significant," Lewis continued. "They deliver innovative products to market faster than anyone in the industry. And selling is integrated into every process, such as customer service, collections and technology."
MBNA is the leader in affinity marketing through relationships with more than 5,000 organizations, such as the NFL, the National Education Association, L.L. Bean and hundreds of medical organizations. Today more than 72 percent of all physicians in the United States carry an MBNA affinity card.
"MBNA's core strength is affinity marketing," said Liam McGee, president of Bank of America Global Consumer and Small Business Banking. "Affinity customers typically carry larger balances, demonstrate higher credit card usage and have a greater propensity to purchase multiple products. We look forward to providing these customers with continued excellent service through Bank of America's efficient customer service platform."
Bank of America Card Services will be led by Bruce Hammonds, who is currently chairman and CEO of MBNA. Hammonds will report to McGee and will be a member of the Bank of America Risk & Capital Committee, which oversees allocation of capital to all business lines.