Bank Of America Goes After MBNA

By Trevor Thomas

June 29, 2005 at 08:00 PM

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Bank of America Corp. has continued its acquisitive ways by agreeing to pay $35 billion for MBNA Corp.[@@]

Bank of America, Charlotte, N.C., once a sturdy regional bank, has turned itself into one of the biggest bank holding companies in the world over the past 20 years through a series of huge acquisitions.

Acquiring MBNA, Wilmington, Del., would make Bank of America one of the biggest credit card lenders in the world. MBNA has about 40 million active card accounts and $143 billion in managed outstanding balances.

MBNA markets a variety of life insurance products and other financial services products to card holders.

MBNA reported $32 million in net income for the first quarter on $61 billion assets. The first-quarter net results included a $768 million charge for a major restructuring program.

The restructuring program includes facilities closings, layoffs and the termination of a contract with a company that has been helping to set up affinity relationships with other organizations, such as universities and sports teams.

MBNA noted in its first-quarter earnings release that yields on card balances have suffered because many customers with cards with the highest interest rates have been paying off their balances more quickly than expected.

(This story will be updated throughout the day as events unfold.)

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