Lloyds Banking Group — owner of the Bank of Scotland, Scottish Widows and Halifax brands — said it agreed to acquire UK consumer credit card business MBNA from a subsidiary of Bank of America for about £1.9 billion in cash.

When the deal is complete, Lloyds’ market share in credit cards will increase from 15% to 26%.

Lloyds said MBNA, with gross assets of about £7 billion, is expected “to deliver strong financial returns and create significant value for shareholders.”

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

“The transaction will deliver a £650 million per annum (c.4%) increase to group revenues and will enhance group net interest margin by c.10bps per annum,” said Lloyds in a statement.

“There is also significant opportunity for cost synergies, currently expected at c.£100 million run rate per annum within two years, representing c.30% of the 2015 MBNA cost base.

“In the first half of 2016 the gross assets acquired delivered post-tax profits of £123 million … 

“The purchase price includes c.£0.8 billion of acquired equity and assumes £240 million for future PPI claims, with the group’s exposure to PPI liability capped at this amount.”

Lloyds CEO António Horta-Osório said: “The acquisition, funded through strong internal capital generation, increases our participation in the expanding UK credit card market with a multi-brand strategy and advances our strategic aim to deliver sustainable growth as a UK focused retail and commercial bank.

“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. 

“Our low cost to income ratio and proven integration capabilities will deliver significant synergies and value to our shareholders.”