- The Washington Times - Monday, January 2, 2006

RALEIGH, N.C. — It happened yesterday morning, the first Sunday of the new year — definitely not banker’s hours.

But that might have been the perfect time for Bank of America Corp. to complete its $35 billion acquisition of MBNA Corp., because there wasn’t much — if anything at all — for consumers to notice once the deal was done.

Now that the paperwork is complete, the nation’s second-largest bank has 40 million active credit-card accounts on its ledger, making it one of the leading worldwide payments-services companies and issuers of credit, debit and prepaid cards based on total purchase volume.

If there are changes coming to credit-card fees and rates, or even a different look to the cards themselves, the bank isn’t saying.

“No decisions have been made,” said Bank of America spokeswoman Alex Liftman.

But Dick Bove, an analyst with Punk Ziegel & Co. in St. Petersburg, Fla., doubted whether most consumers will see much change in the months ahead, predicting that Bank of America will move its existing credit-card system into that of MBNA’s. Bank of America’s new card-services unit will be led by Bruce Hammonds, who was chairman and chief executive of MBNA.

“I don’t think that MBNA is going to change its major programs … and those programs are far better than the Bank of America programs,” Mr. Bove said.

MBNA is the leader in so-called “affinity marketing,” with established branding relationships with more than 5,000 organizations and financial institutions, from the National Football League to hundreds of medical organizations.

Bank of America has said its customers will benefit from access to a larger selection of credit-card products after the deal, while giving MBNA customers access to banking, mortgage and investment products offered by Bank of America.

For now, Miss Liftman said, executives from both companies are continuing to review each company’s business practices and working to integrate the two. As part of the acquisition, Bank of America plans to eliminate 6,000 jobs across both companies, which the Charlotte, N.C., bank has said will help it achieve overall cost savings of $850 million by 2007.

Wilmington, Del.-based MBNA has about 10,500 employees in its home state and 28,000 overall. Bank of America has more than 177,000 employees and operates two credit-card call centers in Delaware that employ about 1,300 workers.

Mr. Bove predicted that the bulk of the job cuts will take place among Bank of America employees as the company closes down its existing credit-card processing operations in favor of MBNA facilities. He expects job losses will come within the next four to six weeks.

“It’s demoralizing if they keep firing people over a period of a year. The way to do it is to fire them all at once quickly, and that issue is no longer on the books,” Mr. Bove said.

Under terms of the agreement announced June 30, MBNA shareholders will receive 0.5009 common shares of Bank of America plus $4.125 in cash for each of their shares, which lost 6 cents to close Friday at $27.15 on the New York Stock Exchange. Bank of America shares fell 4 cents to end the year at $46.15.

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