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Equilibrium's finance and investment news roundup

Our roundup in the lead up to Christmas includes news of Lloyds Banking Group purchasing credit card firm MBNA for £1.9 billion and Canadian company CCL buying Innovia - the firm behind the UK's new £5 note - for £680 million, as well as warnings that the UK mortgage market is to plateau and price changes for EDF customers.

 

Lloyds buys credit card firm MBNA for £1.9bn

Lloyds Banking Group is to purchase the credit card company MBNA from Bank of America at a cost of £1.9 billion. The UK bank anticipates the acquisition will help to increase group revenues by around £650 million a year.

The move represents Lloyds' first acquisition since the financial crisis of 2008 and means the group's UK credit card market share will climb from 15% to 26%.

Antonio Horta-Osorio, Chief Executive at Lloyds, commented: "The MBNA brand and portfolio are a good fit with our existing card business and we will focus on providing its customers with excellent service and value." 

CCL purchases plastic £5 note firm Innovia

Canadian firm CCL Industries has bought the UK company that produces the new plastic £5 note for 1.13 billion Canadian dollars (£680m). CCL said that its purchase of Innovia would help to cement its place as "a world leader" in the polymer banknote market.

Innovia produces the majority of polymer banknotes around the world. It is owned by a group of UK private equity investors and Chief Executive Mark Robertshaw explained there is a good fit between the two firms and expects CCL will be "an excellent long-term owner".

The UK's new £5 note has been a topic of much discussion of late after it was revealed that the banknote contains a small amount of tallow, which comes from animal waste products. 

CML: UK mortgage market to plateau until 2018

The Council of Mortgage Lenders (CML) has warned that the mortgage market in the UK is likely to plateau over the next couple of years. It anticipates that home buyers will be deterred from borrowing more and foresees a shrinking of borrowing by buy-to-let landlords in particular.

Gross lending forecasts for 2017 have been reduced from £261 billion to £248 billion by the CML, which said it is "more pessimistic" in its outlook than it was at this time last year.

Paul Smee, Director General at the CML, said: "Overall, the mortgage market remains resilient but is likely to plateau rather than grow much for the next couple of years." 

'Gas bill reductions and electricity cost rises' for EDF customers

EDF Energy customers can expect to see their gas prices reduce but electricity costs increase during the first quarter of 2017. The energy firm revealed it will cut variable gas prices by 5.2% in January before raising electricity bills by 8.4% at the beginning of March.

The move will likely see around one million customers affected by the electricity price rise in March and around 700,000 people benefitting from the gas price cuts in January. Around 200,000 pre-payment gas meter customers should also enjoy a 12.9% price cut.

 

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