Bank of America / MBNA

OFT closed case: Anticipated acquisition of MBNA by Bank of America.

Affected market: Financial services

No. ME/1964/05

The OFT's decision on reference under section 33(1) given on 14 October 2005. Full text of decision published 24 October 2005.

Please note that square brackets indicate actual figures excised at the request of the parties for reasons of commercial confidentiality.


Bank of America (BoA) is a large US financial institution with a global presence. Its activities cover the provision of banking, investing, asset management and other financial and risk management products and services. In the UK its principal business is Global Corporate and Investment Banking. UK turnover for BoA for the year ended 2004 was £ [ ].  

MBNA Corporation (MBNA) is a financial services company providing, through its subsidiaries, lending, deposit, and credit insurance products and services. UK turnover for MBNA for the year ending 2004 was £ [ ].


The Agreement and Plan of Merger provides for the merger of MBNA into BoA, with BoA being the surviving entity. The parties notified the OFT on 2 September 2005. The statutory deadline expires on 14 October 2005.


As a result of this transaction, BoA and MBNA will cease to be distinct. MBNA's relevant UK turnover exceeds £70 million. Accordingly, arrangements are in progress or contemplation which, if carried into effect, will result in the creation of a relevant merger situation for the purposes of section 33(1) of the Enterprise Act 2002.   


The parties overlap in the provision of financial services in the UK.

Product market

In Lloyds/Abbey (see [note 1]), the Competition Commission (CC) identified four categories of banking markets, namely, financial products sold to personal consumers; financial products sold to SMEs; financial products sold to larger corporations; and wholesale banking.

The parties submit their only areas of overlap are in the retail banking and corporate banking sectors. Retail banking is defined as services to households/individuals, such as deposits, lending, credit cards, etc.  Corporate banking is defined as banking services to corporate clients consisting of deposits, lending, international payments, letters of credit and advice to corporate clients. Since this merger is not expected to raise concerns regardless of which definition is adopted, it is unnecessary to reach a definite conclusion on the appropriate product scope.

Geographic market

In its report into the proposed Lloyds/Abbey merger, the CC found the geographic market for retail banking to be national in scope and considered that in certain areas and for certain products, it may be even narrower.  For corporate banking (see [note 2]), the CC found the geographic market to be global. However, as no competition concerns arise under any basis, it is unnecessary to reach a definitive conclusion on geographic scope.


In the UK, BoA's retail banking activities are confined to the provision of banking services to military personnel of the US Armed Services under specific arrangements between BoA and the US Department of Defence. They do not offer credit card services in the UK, which is MBNA's largest segment, and the parties submit that they do not hold more than 10 per cent share of supply on an aggregate basis in any overlapping segment.

As for corporate banking, the parties submit their activities are more complementary than competing as BoA primarily serves large corporations while MBNA primarily provides credit card services to SMEs.  The only area of overlap in this area is the provision of financial services to SMEs, where the parties' combined share of supply is less than 5 per cent.


This transaction raises no vertical issues.


Third parties were unconcerned about this transaction.


The parties overlap in the supply of retail banking and corporate banking services in the UK. The parties' activities in corporate banking appear to be more complementary than competing, with the only area of overlap resulting in less than 5 per cent share in the provision of financial services to SMEs. BoA's only activity in retail banking is in relation to US military personnel stationed in the UK and in any segment where the parties overlap the resulting share is no more than10 per cent. In conclusion, given the limited overlap, low market shares and general lack of third party concern, this transaction does not appear to raise any significant competition concerns.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.


This merger will therefore not be referred to the Competition Commission under section 33 (1) of the Act.


  1. Competition Commission report published 10 July 2001.
  2. Not including the provision of financial services to SMEs.
Published 13 October 2005