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Merger: Bank of America M&A with MBNA Corporation (2nd Largest Bank in USA)

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Background

In a landmark cash deal valued at approximately $35 billion, Bank of America acquired MBNA Corporation, a leading credit card issuer, making Bank of America the world’s largest credit card company. This acquisition was part of Bank of America’s broader strategy to expand its credit card business and enhance its market position.

This merger not only solidified Bank of America’s position as a leader in the credit card industry but also demonstrated its ability to efficiently integrate large-scale acquisitions, driving significant cost savings and operational efficiencies.

Challenges

  • Portfolio Rationalization: MBNA had about 300 applications spread across the US, Canada, and beyond. The challenge was to streamline and integrate these applications into Bank of America’s existing systems.
  • Infrastructure Integration: Merging the networking, storage, data centers, and physical servers of both companies, which included Linux, Solaris, Microsoft SQL databases, and Red Hat Linux systems.
  • Operational Efficiency: Reducing the number of applications and aligning them with Bank of America’s synergistic platforms.
  • Credit Scoring and Fraud Management: Integrating MBNA’s credit scoring systems with Bank of America’s existing platforms and enhancing fraud management capabilities.

Solution

Led has implemented a comprehensive plan to address these challenges, including:

  • Application Rationalization: Reduced MBNA’s portfolio from over 300 applications to less than 150, integrating them into Bank of America’s synergistic platforms.
  • Infrastructure Overhaul: Led the integration of networking, storage, data centers, and physical servers, ensuring compatibility and efficiency. This included migrating to Oracle 10g Portal, Hyperion, and Business Objects’ Business Intelligence and Reporting Tools.
  • Credit Scoring Integration: Aligned MBNA’s credit scoring systems with Bank of America’s, leveraging Fair Isaac Corporation (FICO) products to enhance customer scoring and business rules.
  • Fraud Management and Optimization: Implemented solutions for payment fraud, credit limit optimization, and collections, ensuring robust fraud management and operational efficiency.

Tangible Outcomes

  • Successful Integration: Completed the merger and integration within nine months, significantly streamlining operations and reducing redundancy.
  • Cost Savings: Achieved a $30 million budget saving by rationalizing the application portfolio and optimizing infrastructure.
  • Enhanced Credit Operations: Improved credit scoring and fraud management capabilities, leading to better customer engagement and risk management.
  • Operational Efficiency: Delivered a comprehensive Enterprise Reporting CFO Portal, integrating various business intelligence tools and ensuring alignment with business strategies.
  • Future-Ready Infrastructure: Established a robust and scalable infrastructure, ready to support future growth and acquisitions.