Lloyds Banking Group has agreed to acquire credit card company MBNA for cash consideration of £1.9bn from Bank of America.

The acquired MBNA business holds assets of £7bn and employs more than 1,500 people at its base in Chester. It reported post-tax profits of £123m in the first half of 2016.

The lender is expecting the deal to add £650m to group revenues per annum. It also forecast cost synergies of around £100m a year within two years.

On completion of the transaction, the group’s market share in credit cards is expected to rise from 15% to 26%.

The lender added that it will maintain MBNA brand as a challenger brand.

Commenting on the acquisition, Antonio Horta-Osorio, group chief executive of Lloyds, said: “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.”

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Subject to the receipt of competition and regulatory approval, the transaction is expected to complete by the end of the first half of 2017.