Alfred Lerner, the executive who rescued MNC Financial Inc. and brokered its sale, purchased an additional 1 million shares of MBNA Corp.'s common stock, bringing his total stake to 13 percent, the company said yesterday.
The nation's second-largest credit card lender closed up 75 cents at $36.75, but its value has dropped 14 percent since its high two weeks ago.
"This appeared to be a unique buying opportunity," said Mr. Lerner, chairman and chief executive of the Wilmington, Del.-based company. "My opinion is that between now and the end of next year, the differences between MBNA and others in the credit card business will become even more apparent than they are now."
Credit card companies have been pummeled by the market because of worries that consumers aren't paying off their credit card debts, analysts say.
"This is really a move on his part that says the fundamentals of this company are still strong," said Brace C. Brooks, an analyst with the Chapman Co. in Baltimore. "He is saying [MBNA's] credit quality is still above industry norms."
MBNA's credit card losses on its $25.2 billion of managed loans were 2.71 percent in the third quarter, up from 2.44 percent a year ago, Mr. Brooks said. But they were flat at 2.66 percent for the first nine months of the year.
"I love [MBNA's] fundamentals," Mr. Brooks said.
Under Mr. Lerner's direction, MNC spun off MBNA into a separate company in 1991 because the banking company was being crushed by problem real estate loans. MNC was sold to Charlotte, N.C.-based NationsBank Corp.