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.”

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