Morgan Stanley Bank International / Lloyds TSB Bank plc

OFT closed case: Anticipated acquisition by Morgan Stanley Bank International Limited of certain assets of the Goldfish business from Lloyds TSB Bank plc.

Affected market: Credit card services

No. ME/2212/06

The OFT’s decision on reference under section 33(1) given on 16 February 2006. Full text of decision published 23 February 2006.

Please note that square brackets indicate figures or text which have been deleted or replaced with a range at the request of the parties for reasons of commercial confidentiality.


Morgan Stanley Bank International Limited (Morgan Stanley Bank) is a UK company, whose ultimate parent and controlling entity is Morgan Stanley. It provides financial services to corporations, governments, financial institutions and individuals. The services offered by Morgan Stanley Bank include the provision of credit cards, loans and loan facilities; repurchase tendering to the European Central Bank and trading in loans and financial instruments. Morgan Stanley Bank’ s turnover in the year ended 30 November 2004 was [less than £300 million].

Lloyds TSB Bank plc (Lloyds) is a subsidiary of Lloyds TSB Group plc, a UK based financial services group. Lloyds issues credit cards under its own brand as well as the Goldfish brand and other co-brands.

Goldfish (including the Goldfish brand) is a business division operating within Lloyds. The core activity of Goldfish is the issue and operation of personal credit cards in the UK. Ancillary to its credit card services is the provision of some insurance intermediary services, which are ultimately provided by insurers. Goldfish also provides personal loans to its customers under the Goldfish brand. As at 30 November 2005, the total net credit card receivables for Goldfish amounted to approximately £800 million and it had a turnover of [more than £70 million].


Morgan Stanley is buying certain assets of the Goldfish business, in particular the operation of credit card accounts, the Goldfish brand, the insurance intermediary business and the call centre operated by Goldfish with approximately 300 staff currently employed there (the Goldfish Assets). While the existing Goldfish personal loan portfolio will not be acquired by Morgan Stanley Bank, Morgan Stanley Bank will have the ability to offer personal loans using the Goldfish brand in the future. The acquisition was announced on 20 December 2005 and completion is due on 17 February 2006. It is not conditional on clearance by the OFT.


Morgan Stanley and the Goldfish Assets will cease to be distinct as a result of the transaction. The merger meets the turnover test in section 23 of the Enterprise Act 2002 (the Act) as the UK turnover of the Goldfish Assets is greater than £70 million. The notified arrangements, if carried into effect, will result in the creation of a relevant merger situation.


Credit cards and associated services

The parties overlap in the provision of credit card and associated services (associated services include such services as loyalty programmes and insurance intermediary services).

The main issue in relation to the product market is the extent to which credit cards form part of a wider market which includes at least credit cards and possibly other payment mechanisms such as debit cards, cheques, cash, hire-purchase and overdrafts. This issue was raised by both the parties and by third parties.

In this case, however, the relevant frame of reference can be left open, as even on a narrow definition (credit cards in the UK) no competition problems arise.

Personal loans

The parties are also active in personal loans, but their shares of supply in this area are very low (Goldfish and Morgan Stanley each have a [less than one] per cent share of supply) in the UK. Given that the transaction will not transfer the existing loans portfolio (and Lloyds will not offer any more Goldfish branded loans post transaction), but will only give Morgan Stanley the ability to offer Goldfish branded loans in the future, and the small shares of supply, this is not considered further.


The parties provided share of supply information using two measures commonly used in the industry: credit cards issued and balances outstanding. The information suggests that there are a large number of suppliers of credit card services, many of whom appear to have a greater share of supply than the combined share of Morgan Stanley Bank and Goldfish. For both share of supply measures, the combined share of supply of Morgan Stanley and Goldfish was less than five per cent.

It should also be noted that the parties do not supply any charge cards (see [Note 1]). 

The parties provided information on the developments in the UK credit card market 2000 – 2004, which outlined a number of acquisitions and new entry. The parties also cited a number of industry reports and journals that confirm switching by credit card holders.


This transaction raises no vertical issues.


Third parties did raise some questions as to the appropriate market definition in relation to this case. However, notwithstanding this, they did not have any concerns about the transaction.


The parties overlap in the provision of credit cards and associated services in the UK. However, the parties combined share of supply in relation to credit cards and associated services is less than five per cent. While we have received various submissions on the appropriate market definition in this case, any widening of the frame of reference would result in the parties having an even smaller share of supply.

Finally, as noted above, third parties raised no concerns about any aspect of the merger.

Consequently, the OFT does not believe that it is or may be the case that the creation of this merger situation 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. Neither Morgan Stanley nor Goldfish supply charge cards, although Lloyds issues both credit and charge cards.
Published 16 February 2006