Fed Approves Bank of America / MBNA Merger
The Board of Governors of the Federal Reserve gave the OK to the proposed merger of credit card giants Bank of America and MBNA Thursday. The approval marked the final regulatory hurdle in creating the largest credit card issuer in the United States. According to Bank of America, the combined operations will have 40 million active U.S. accounts and nearly $140 billion in managed balances. ?MBNA?s marketing and product development capabilities are significant,? said Ken Lewis, chairman and CEO of Bank of America. ?They deliver innovative products to market faster than anyone in the industry.” ?We are excited about how the combination of MBNA and Bank of America will benefit our customers and investors.?
In a press release, Bank of America stressed the importance of MBNA affinity card programs. MBNA offers over 5,500 affinity credit cards in partnership with organizations and retail stores including the NFL, many major universities, Hard Rock Cafe, Royal Caribbean, L.L. Bean. Liam McGee, president of Bank of America Global Consumer and Small Business Banking, said, “Affinity customers typically carry larger balances, demonstrate higher credit card usage and have a greater propensity to purchase multiple products.”
It is unclear if the MBNA brand will disappear, but the announcement that current MBNA CEO Bruce Hammonds will head up Bank of America Card Services may be a clue that MBNA cards could be re-branded with the Bank of America name. The Bank of America/MBNA merger is expected to close January 1, 2006.
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