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SUCCESS IS GETTING THE RIGHT CUSTOMERS...
AND KEEPING THEM.





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2001 ANNUAL REPORT





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CONTENTS

|   |  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | ------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2  |  | Ten-Year Highlights            
|  
|3  |  | Financial Highlights           
|   |  |                                 | MBNA IS A COMPANY OF
PEOPLE WITH AN ATTITUDE....                                                                                                                                                                                                                                                                                                                                                                                                     
|4  |  | 2001 Highlights                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|5  |  | To OurStockholders             
|  
|8  |  | Our Company                    
|  
|10 |  | Our Businesses                 
|  
|16 |  | Our Customers                  
|  
|20 |  | Our Service                    
|  
|24 |  | Our Community                  
|  
|28 |  | MBNA OfficeLocations           
|  
|29 |  | Financials                      | SATISFY THE CUSTOMER.                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|88 |  | Board of Directors
and Officers
|  
|  
|  
|   |  |                                 | Pictured on the cover are selected credit cards from some of our military and
law enforcement endorsing organizations, including The Retired Officers
Association, American Fire Fighters,
Fraternal Order of Police, Marine Corps Association, Air Force Academy,
American Legion,
and the Enlisted Association of the National Guard of the United States.
Members of these organizations have typically been among our most responsible
Customers.





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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|MBNA IS A COMPANY OF PEOPLE COMMITTED TO:Providing the Customer with the finest products backed by consistently top-quality service.Delivering these products and services efficiently, thus ensuring fair prices to the Customer and sound earnings for the stockholder.Treating the Customer as we expect to be treatedputting the Customer first every dayand meaning it.Being leaders in innovation, quality, efficiency, and Customer satisfaction. Being known for doing the little things and the big things well.Insisting on an inclusive work environment where every single person is given the encouragement, support, and opportunity to be successful.Expecting and accepting from ourselves nothing short of the best. Remembering that each of us, the people of MBNA, makes the unassailable difference. | Getting the right Customers and keeping them is the foundation
of our business. It demands a single-minded commitment
to Customer satisfaction.
Meeting this commitment
requires tough standards, good people, and constant attention
to the importance of each individual Customer. It means having an attitude.
Written by Charlie Cawley, endorsed by the companys management, and introduced
during the summer of 1986, the precepts to the
left express our attitude.
They are displayed throughout
the company, and each person carries a copy. These words have been reviewed
every year since
they were written and not one
word has ever been changed.
(Last year, a new precept
was added.) These precepts are simple and straightforward,
and we mean every single one.



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TEN-YEAR HIGHLIGHTS



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| |  | 
| |  | 



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FINANCIAL HIGHLIGHTS

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|----------------------------------------------
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|Year Ended December 31,                       
|                                              
|dollars
in thousands, except per share amounts
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|Per Common Share Data                         
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|Ratios                                        
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|Financial Statement Data                      
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|                                              
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|Managed Data                                  
|                                              
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|                                              
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|                                              
|                                              
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|(a)                                           
|                                              
|(b)                                           
|                                              
|(c)                                           



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|RETURN TO
SHAREHOLDERSDuring the period since the IPO, the Corporations
average annual total
return to stockholders
has been 35.4%.Assumes $100 invested at MBNAs initial public offering on January 22, 1991,
and dividends reinvested into MBNA stock or stocks representing the indexes | 2001 HIGHLIGHTSIncreased earnings to $1.7 billion or $1.92 per common share,
a 25% increase over 2000.Increased managed loans to $97.5 billionsolidifying position
as the largest independent credit card lender in the world.Added 11.2 million new Customers. The characteristics of
new cardholders are consistent with the superior quality of
existing cardholders.Acquired 439 new endorsements, including for example the University of Miami,
University of Mississippi, United States
Tennis Association, University of Arkansas, Major League Soccer, Sierra Club of
Canada, Norwegian Cruise Line, University of Toronto, PGA TOUR, Northeastern
University, NAACP, Nottingham Building Society (U.K.), Seattle Mariners,
Amtrak, UNICEF (U.K.), San Antonio Spurs, Oakland Athletics, Royal College of
Surgeons in Edinburgh (U.K.), Virgin Group (U.K.), and the Congress of
Neurological Surgeons. MBNA now has endorsements from more than 5,000
membership organizations
and financial institutions.Extended exclusive endorsement agreements with more than
1,000 organizations, including for example Wake Forest University, California
Medical Association, PGA of America, Ohio Nurses Association, Cincinnati Reds,
Irish American Partnership, NASCAR, Major League Baseball, National Hockey
League,
and Texas Medical Association.Maintained superior credit quality, with loan losses well below published
industry averages.Continued expansion of MBNAs international activities to 7.4 million
Customers with $10.8 billion in loan balances,
up 22% from 2000. Loans reached $1.9 billion in our
Canadian operation, with nearly 400 group endorsements.Increased the number of Customers served through MBNA.com
to 5.6 million, including more than 3.3 million enrollments for
Net AccessMBNAs online banking service.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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TO OUR STOCKHOLDERS

This report presents MBNAs full-year results for 2001our 20th year in
business and 11th as a public company. Earnings increased 29% to $1.7
billionbringing to 44 the number of consecutive quarters of consistent
earnings per share growth averaging 25% since MBNA became a public company in
1991.

Loans outstanding grew to $97.5 billion, and we added 11.2 million new
Customers. The characteristics of new cardholders are consistent with the
superior quality of the companys existing Customers. The typical new Customer
has a $70,000 annual household income, has been employed for 11 years, owns a
home, and has a 17-year history of paying bills promptly.

This year, most credit card issuers experienced increases in loan losses, as
did we. However, our lending policies and methods remain consistent. As a
result, loan losses continue to be significantly lower than published industry
levels.

We continue to strengthen the company through investments in new markets,
products, and services. While focusing heavily on the U.S. credit card
business, we also expanded the Consumer Finance business and continued to grow
in Europe and Canada.

Like previous annual reports, this report emphasizes what we do, how we do it,
and why were good at it. The fundamental ways in which we manage our business
have remained constant and enable us to produce consistent financial results in
a variety of economic conditions.

Everything that happens at MBNA is a direct result of the commitment, attitude,
and hard work of the people here.

It has been 20 years since MBNA was formed and 11 years since it became a
public company. During this time,
our goal has been consistently superior performance. Our primary product is a
great one and weve stuck to it, our management team is among the best and most
experienced, our focus on Customer quality is unrelenting, our attitude about
Customer satisfaction drives everything we do, and our results speak for
themselves. So far,
so good! Looking ahead, we take nothing for granted except our commitment to
consistently superior performance.

We hope you enjoy this report and find it informative.

|                |  |                   |  |               |  |                  
|--------------- |  | ----------------- |  | ------------- |  | -----------------
|                |  |                   |  |               |  |                  
|John R. Cochran |  | Bruce L. Hammonds |  | Alfred Lerner |  | Charles M. Cawley





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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  | MBNA organizes its sales and marketing efforts into 9 business development
sectors. Each sector
is led by managers who focus on
a specific audience. These sectors include Professionals, Educators, Colleges &
Universities, Financial Institutions, Alliance, Sports, Motorsports, Special
Interest,
and Regional.Two of MBNAs largest market sectors are Professionals and Educators, which
together total more than 1,500 endorsing organizations with 47 million members.
The 10 million Customers in these sectors carry nearly $25 billion in loan
balances. Highlighted throughout this report are examples of typical Customers
within these two sectors. | 



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|                                     |  |                                                  
|------------------------------------ |  | -------------------------------------------------
|DANIEL L. BARROW, M.D.               |  | C. MICHAEL CAWLEY, M.D.                          
|CHAIRMAN, DEPARTMENT OF NEUROSURGERY |  | NEUROSURGEON, EMORY UNIVERSITY SCHOOL OF MEDICINE
|EMORY UNIVERSITY SCHOOL OF MEDICINE  |  |                                                  

NEARLY 500 MEDICAL ORGANIZATIONS ENDORSE MBNA PRODUCTS, INCLUDING THE CONGRESS
OF NEUROLOGICAL SURGEONS, THE AMERICAN COLLEGE OF PHYSICIANS-AMERICAN SOCIETY
OF INTERNAL MEDICINE, AND THE ASSOCIATION OF OPERATING ROOM NURSES. CURRENTLY,
MORE THAN 70% OF
ALL PHYSICIANS AND NEARLY 60% OF ALL NURSES IN THE UNITED STATES CARRY AN MBNA
CREDIT CARD.

With assistance from MBNA, Emory University in Atlanta, Georgia, is
establishing the MBNA Stroke Center,
a world-class facility for treatment, research, and medical education. MBNA is
also assisting with the establishment of
the Helen F. Graham Cancer Center at the Christiana Hospital in Newark,
Delaware, to improve the quality of cancer treatment.



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|MBNA is a company of
people with an attitude
satisfy the Customer. It is
this attitude that makes
MBNA stand out among Fortune 500 companies.
And it is this attitude that
can be seen in the quality
of the products and services we provide to our Customers.Throughout this annual report youll read
about MBNA At Your Service, which
describes just a few of the small but important things
we do consistently at MBNA to satisfy our Customers | MBNA Corporation is a holding company with three chartered banks: MBNA America
Bank, N.A., a national bank in the United States; MBNA Europe Bank Limited, a
fully chartered bank in the United Kingdom; and MBNA Canada Bank, a fully
chartered bank in Canada. Like all banks, we take deposits and make loans. Our
lending business has $97.5 billion in managed loans, and our Customers have
more than $27 billion on
deposit in money market and certificate
of deposit accounts. MBNA also offers
a variety of consumer loan products.But thats where the similarity to
a traditional bank ends. We dont have a
branch network. Our primary business is
lending people money through credit cards: MBNA is the worlds largest
independent credit
card lender. We make loans through credit cards in
the United States, the United Kingdom, Ireland, and Canada.Credit card lending is a good business for a number of reasons. Credit
cards free people from the need to carry cash and let them have the things they
need today while paying for them sensibly out of future income.The credit card is something that nearly everyone wants. There are
approximately 150 million people in the United States, 25 million people
in the United Kingdom and Ireland, and 15 million people in Canada who
could qualify for a credit card. And the market continually refreshesitself as
young people reach adulthood.Done right, credit card lending produces relatively low-risk assets.There are no industry, geographic, or individual account concentrations.
MBNAs $97.5 billion in loans are spread among 27 million active borrowers with
an average account balance of $3,600.It is not surprising that this is a very competitive business. It is a
business where a company can distinguish itself from competitors by the methods
it uses to market and the service it provides. MBNAs formula for success
remains very simple. Success is getting the right Customersand keeping them.
We get our Customers through a unique marketing propositionselling to



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|people
with a strong common interestand we keep our Customers by providing
top-quality service, by thinking of ourselves as Customers every minute of
every day. If youre not good at both of these things nothing else really
matters and MBNA is very good at both.We also have a disciplined underwriting process that ensures we select
the right Customer. The right Customer is someone who will borrow


from us and, of course, pay us back on time. MBNAs typical Customer has
significantly
better repayment habits than the industrys average Customer.This disciplined approach to the business is the reason we have achieved
consistent earnings growth in each of the 20 years since the company was
founded in 1982. At MBNA, we have an unrelenting focus
on the quality of each individual Customer. We lend to Customers who have
proven stability, the habit of being financially responsible, and the capacity
to repay. It is the focus on these fundamentals that has driven our consistent,
profitable growth through a variety of economic and business environments. The
quality of our Customer is also the most reliable predictor of the future. | MNBAs
NEWEST LOCATIONSMore than half of the
people of MBNA work in regional offices in the
United States, Europe, and Canada. Establishing a local presence in these
regions
has enabled us to enhance relationships with our endorsing groups,
attract new ones, develop customized marketing programs based on
local interests, and hire
top-quality people.Newark, New JerseyAtlanta, GeorgiaAliso Viejo, CaliforniaCarrick-on-Shannon, Ireland



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| | OUR BUSINESSES___________________________It is always the thousands of little things done right that add up to the
unassailable advantage. Above all, we want a reputation for doing the little
things well...and the big things will follow.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Kerry T. Fowley, MBNAInternet Marketing;
Volunteer for Childrens Reading Programs

NEARLY 100 EDUCATION ASSOCIATIONS WITH 5 MILLION MEMBERS ENDORSE MBNA PRODUCTS,
INCLUDING THE NATIONAL EDUCATION ASSOCIATION AND THE
NATIONAL ASSOCIATION FOR THE EDUCATION OF
YOUNG CHILDREN. CURRENTLY, MORE THAN ONE-
THIRD OF ALL TEACHERS IN THE UNITED STATES
CARRY AN MBNA CREDIT CARD.



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|ENTHUSIASTIC PEOPLEMBNA named one of
The 100 Best Companies to
Work For by FORTUNE for the past five years, recognized as a top place to work


by Business Week, and called one of the 100 Best Companies
for Working Mothers
by Working Mother magazine for 10 years runningMasterPiece idea program encourages the people of MBNA to take an active role
in improving Customer
satisfaction and efficiencyHiring people who
like people helps
ensure our success at
Customer satisfactionThink of Yourself as a Customer appears over every door in the companyCompany precepts are displayed throughout the company, and each person
carries a copy |  | MBNA is the worlds largest independent credit card lender with a market share
of nearly 15% of credit card loans in the United States, 12% in the United
Kingdom, 18% in Ireland, and 7% in Canada. The U.S. credit card loan portfolio
increased to $75 billion in 2001. We sell to people who share common

interests and focus on groups with strong ties to their members, fans, and Customers.
We call this endorsed marketing.



Today, more than 5,000 organizations in the United States, the United
Kingdom, Ireland, and Canada endorse MBNA products to their members. Our
Professional market sector exceeds $20 billion in loans to members of 1,400
organizations, including 39 state dental, 44 state bar, 49 state nursing, and
40 state medical associations. In 2001, we added 58 groups within this sector,
including the American College of Obstetricians and Gynecologists, the Congress
of Neurological Surgeons, and the Vermont State Bar Association. They join
organizations like the Association of
Trial Lawyers of America, the American Medical Student Association, and
the National Society of Professional Engineers. Overall, MBNA credit cards are
carried by 72% of all physicians, 53% of all lawyers, 68% of all dentists, 52%
of all engineers, and 59% of all nurses in the United States.MBNAs roster of sports organizations continued to grow in 2001. More than
9.1 million Customers now carry an MBNA credit card featuring their favorite
team, race car driver, or other sports-related activity. We added 2 million new
Customers in this sector, and loans reached $9.4 billion. MBNA issues the
official credit cards of the National Football League, Major League Baseball,
the National Hockey League, NASCAR, the Professional Golfers Association, and
16 of the National Basketball Association teams.Our products are also endorsed by more than 700 colleges and universities,
including 9 of the Big Ten schools and 5 of the Pac-10 schools. Nearly 4
million alumni and students from these schools use MBNA products, totaling $7.1
billion in loans. This sector provides the opportunity to attract high-quality
Customers as graduates enter the workforce.Although MBNA doesnt have branches, our products are sold through more
than 12,000 bank offices across the United States, the United Kingdom, and
Ireland through the endorsement of 300 financial institutions. More than 9
million financial institution Customers acquired through marketing programs or
portfolio acquisitions have generated $13 billion in loans for MBNA.



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|In 2001, we received the endorsement of 439 new organizations, including
for example the NAACP, Norwegian Cruise Line, Major League Soccer, PGA TOUR,
Amtrak, and the Childhood Leukemia Foundation. After signing a group, we
implement a comprehensive marketing campaign to get the right Customers from
among the groups members. In 2001, MBNAs 11.2 million new Customers came to
us through a variety of acquisition channels,

 including mail, telephone,
television, or other media; in person at events; and via the Internet.During the year, direct mail continued to be our most
effective means of
marketing. Our full-service, in-house advertising agency customized mailings
for thousands of marketing programs, working closely with MBNAs marketing
managers to develop creative, targeted, and cost-effective programs that
produced consistent results.To complement direct mail, we operate a large telephone sales program.
MBNA telephone sales offices throughout the United States and in the United
Kingdom and Ireland together acquired more than 2 million new Customers in
2001. In addition, MBNAs person-to-person marketing efforts brought us nearly
1 million new accounts during 6,500 events in 2001. This method is especially
successful at NASCAR races, NFL games, and professional conventions. MBNA
products are offered over the Internet through the Web sites of our endorsing
organizations. Endorsed marketing and effective acquisition methods have
resulted in consistent loan growth. |  | TARGETED
MARKETINGMBNA people 
work closely with our endorsing organizations in developing comprehensive
marketing programs tailored to the interests
of their members.
The stands were packed with
fans waving American flags on
September 23, 2001, at the
MBNA Cal Ripken, Jr. 400,
the race named in honor of the Baltimore Orioles infielder.
The day marked a highlight for MBNA Motorsports. In 2001,
we added nearly 200,000 new Customers by marketing to
the fans of NASCAR.



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|FINEST PRODUCTSMBNA targets communications cost  effectively to the members and Customers of
endorsing organizations

Custom credit card designs created for each of our 5,000 endorsing groups

Standard, Gold, Platinum, and Quantum credit card products give Customers
the flexibility of choosing
the benefits that are
important to them

MBNA was the first credit card company to offer all
of its Customers 24  hour
telephone access, in 1986 |  | Our business in the United Kingdom, Ireland, and Canada has grown to 7.4
million Customers with $10.8 billion in loans, a 22% increase


from last year.
More than 4,200 people now work in our offices in these countries. In 2001,
MBNA Europe acquired nearly 1.8 million new Customers. MBNA Europe earned
endorsements from 56 new groups and financial institutions in 2001, including
the Society of Operations Engineers, Abbey National Bank, Virgin Group, Irish
Nurses Organization, and the University of Hertfordshire, and now has 840
groups in total.We began marketing in Canada in 1998 and
now serve nearly 400 endorsing organizations there.
Loans grew more than $400 million in 2001, reaching $1.9 billion with 2
million Customers. This year we signed new endorsements with
75 membership organizations, including the University of Toronto, the
Sierra Club of Canada, and the College of Family Physicians. There are now more
than 800 people working for MBNA Canada at
its two locations in Ottawa and Montreal.Our Consumer Finance business includes a variety of installment
and revolving unsecured loan products. This portfolio grew $2.3 billion
or 24% in 2001 and now totals $11.8 billion.MBNAs consumer loan products are marketed through the mail and over the
telephonemethods we have used successfully over the past 20 years in the
credit card business. These products are cross-sold to our credit card
Customers and are endorsed by more than 2,000 organizations, including The
Retired Officers Association, the National Education Association, and Penn
State University. Customers use these products to consolidate loans



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|or for large expenses such as home improvements. In addition, we have a
point-of-sale finance business that offers loans through sales agents in
1,500 financial institution branches.Our deposit business exceeded $27 billion in 2001, with an average balance
per account of about $26,000. The company offers money market accounts,
certificates of deposit (CDs), and retirement accounts to Customers,
communicating with them through the mail and by telephone. Deposits are
a stable and cost-effective way to fund loans. The combination of
attractive rates, group endorsements, and peerless service leads to extremely
high
CD renewal rates and therefore more stability of balances.In addition to serving members of endorsing organizations such as
the National Education Association and The Retired Officers Association,
MBNA attracts many deposit Customers who have read about the companys rates in
newspapers and financial magazines. Because we do business primarily by phone
and through the mail and dont have the costs of a branch system, Customers are
offered attractive rates for the maturities we want. MBNAs deposit program has
a clear strategic purposeoffering a valuable service to Customers and
endorsing groups while providing the company with a strong, diversified source
of funding. |  | NET ACCESSMore than 3.3 million MBNA Customers have signed up to use  the Net Access
online banking  service. Net Access gives our  Customers all the services they
need to manage their credit  card accounts24 hours a day from their personal
computers.  Customers are able to get real- time information on their  accounts,
track charges and  payments, review recent statements,  pay monthly bills, and
more. In 2001, we made  significant site enhancements,  including a more
efficient  enrollment process and
online payment center.Point-of-sale finance loans
had strong growth in 2001
with the help of a very efficient  application process and
instant loan decisioning.



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| |  |                                                                                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | OUR CUSTOMERSExcellence is a point of view. It isnt brilliance
or getting the breaks. Its consistent attention
to and honest respect for the Customer.



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Omar McNeill, MBNA ATTORNEY


MORE THAN 160 LEGAL ORGANIZATIONS WITH 1.6 MILLION MEMBERS ENDORSE MBNA
PRODUCTS, INCLUDING THE ASSOCIATION OF TRIAL LAWYERS OF AMERICA, FEDERAL BAR
ASSOCIATION, AND 44 OF 50 STATE BAR ASSOCIATIONS. CURRENTLY, MORE THAN HALF OF
ALL ATTORNEYS IN THE UNITED STATES
CARRY AN MBNA CREDIT CARD.



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Customer | 17






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|                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|TOP-QUALITY
SERVICETwo-ring telephone
pickup assures that Customer inquiries are addressed immediately

Payment processing 7 days
a week for mailed payments (including holidays)


Lost or stolen credit cards
replaced within 24 hours


Instant credit line
increase decisions


Dedicated dispute call center


Ability to pay online and make other requests through MBNA Net Access |  | Getting the right Customers is the top priority at MBNA. It all
starts with a unique marketing proposition, enabling us to target marketing
effectively to attract the most qualified applicants. Marketing to the members
of our more than 5,000 endorsing organizations, we choose Customers from a
universe with very strong characteristics.We look for three basic things from people before approving them
for a loan: their stability, their character (how well they have handled
their finances), and their capacity to repay. These have been our standards
every day for the last 20 yearsand they will not change. The consistency in
our credit process brings us Customers more likely to perform well. The
typical new Customer has an average annual household income of more than
$70,000, has been employed for 11 years, owns a home (74%), and has a 17-year
history of paying bills promptly.Getting the right Customers begins with effectively targeted marketing and
continues with the work of the credit analyst or lender. Other credit card
issuers rely exclusively on a computer-generated credit score and credit bureau
information. We take a much more personal approach, combining



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|sophisticated
technology and highly predictive models with the insight of a professional
credit analyst. When a credit analyst is reviewing an application, she or he
has the flexibility to say yes, no, or maybe. If the answer is maybe,
which happens about 25% of the time, the analyst contacts the applicant for
additional information, thus gaining a better understanding
of the circumstances before making a final lending decision.Careful review of each application means that only those who should
be approvedfewer than half of all applicantsare approved. This
approach to lending also ensures Customers receive appropriate credit lines.
Because of the way we market and lend, MBNA Customers use their cards 59% more
than the average credit card Customer does, and their typical purchases are 24%
larger than the average credit card transaction. The result is higher loan
balances per Customer and greater revenue for MBNA.Not only does this personalized approach to credit evaluation promote
Customer loyalty, it results in loan losses that continue to be significantly
lower than published industry levels. |  | CROSS - SELLINGOffering Customers additional
MBNA products helps us build  Customer loyalty and
enhance  revenues. Technology allows us  to evaluate the things we know  about
each credit card  Customer and offer other  appropriate products,
including deposit accounts,  consumer loans, business
credit cards, or other services.
The number of Customers
carrying multiple MBNA
products continued
to grow in 2001.Judgmental lending ensures
we choose the right Customers.
The credit standards we look
for in all loan applicants
remain consistent.



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Think of Yourself as a Customer  |  19




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##### 



| |  |                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | OUR SERVICEAttention to the Customer becomes the companys mind-set only if all of its
people live it with passion, persistence, and above all, consistency.



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20 | Think of Yourself as a Customer




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##### 





Bill Esposito, MBNA Facilities Director


MORE THAN 120 ENGINEERING ASSOCIATIONS WITH 2 MILLION MEMBERS ENDORSE MBNA
PRODUCTS, INCLUDING THE NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS, SOCIETY OF
MANUFACTURING ENGINEERS, AND AMERICAN SOCIETY OF CIVIL ENGINEERS. CURRENTLY,
MORE THAN HALF OF ALL ENGINEERS IN THE UNITED STATES CARRY AN MBNA
CREDIT CARD.



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Think of Yourself as a
Customer | 21






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##### 



|                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                         
|DEPENDABILITY24-hour service, 7 days a week, 365 days a year

Customer Satisfaction Test Boards located throughout MBNAs facilities to
track daily service levels in a variety of key areas

Highest authorization approval rates in
the industry

Regional, national, and international locations to better serve our Customers
around the world

Proprietary data processing systems with industry-leading reliability |  | The single most important contributor to our success is the commitment of all
of the people of MBNA. The people of the company have an
attitudesatisfy the
Customer. This attitude drives everything we do and is what separates us from
the competition.Nearly two-thirds of the people who join MBNA are referred by people who
already work here. Our thorough hiring process involves interviews by people
currently in similar jobs, supervisors, experienced personnel recruiters, and
senior executives. In addition to determining an applicants technical ability,
each interviewer uses his or her experience and skill to determine whether the
candidate is a person who likes other people. People who like other people find
it easy to think of themselves as Customersthey find it easy to satisfy the
Customer.We insist on a work environment that supports MBNA peoples enthusiastic
pursuit of Customer satisfaction. We provide excellent education, sophisticated
technology, a comfortable work setting, and programs that help people balance
the demands of family and the workplace. People who feel good about where they
work do a better job of satisfying Customersand our Customers notice.Getting the right Customers is just part of producing consistent results.
Keeping Customers once we get them determines our future success. MBNA keeps
Customers by treating them well. Maintaining
high levels of Customer satisfaction has enabled us to retain 97% of
our profitable Customers year after year.MBNAs proprietary technology helps maintain these superior service
levels. Owning the processing systems allows us to closely monitor the quality
of



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22  | Think of Yourself as a Customer




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##### 



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|every aspect of the Customer relationship. In 2001, MBNA efficiently handled
more than 215 million Customer payments, 450 million statements and letters,
and more than 1 billion individual Customer purchases and cash advance
transactions totaling $142 billion. Developing technology internally ensures
the reliability and responsiveness of the computer and telecommunication
systems used to satisfy Customers.We focus on satisfying millions of Customersone Customer at a time.
In 2001, Customers contacted us nearly 100 million times. Each
timewhether the request was for a credit line increase, an additional card,
or information about a monthly statementwas an opportunity to demonstrate an
absolute commitment to superior, individualized Customer service. Each contact
solidifies our relationship with individual Customers and with
the thousands of membership groups that endorse our products. |  | USING TECHNOLOGY
TO BETTER SERVE
CUSTOMERSIn 2001, we enhanced
the capability of our
voice response unit (VRU)
to segment Customers and 
match them with the 
representatives best able to
meet their needs. These 
initiatives minimized
call transfers, resulting
in a better experience
for Customers. As in all
aspects of our business, 
appropriate use of technology
helps us improve service and 
become more efficient.Every Customer contact
represents an opportunity to
let the Customer know how 
important he or she is to us.



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Think of Yourself as a Customer  |  23




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##### 



| |  |                                                                                                                                                         
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | OUR COMMUNITY                                                                                                                                           
| |  |                                                                                                                                                         
| |  | Every great and commanding event in the annals
of the world is a triumph of enthusiasmnothing
great was ever achieved without
it.Ralph Waldo Emerson
| |  |                                                                                                                                                         



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24 | Think of Yourself as a Customer




---



##### 







THE PEOPLE OF MBNA VOLUNTEERED MORE THAN 500,000 HOURS

AT COMMUNITY ORGANIZATIONS AND EDUCATION INSTITUTIONS IN 2001.

Michelle D. Shepherd, MBNAVice Chairwoman of Marketing



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Customer | 25






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##### 



|                                        |  |                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                        |  | When MBNA was established in 1982, the decision was made to hire
only people who genuinely like other people. As a result of this approach,
the people who come to work at MBNA have a sincere interest in getting
involved and helping othersnot just our Customers, but also people in
the communities where we live and work.
|                                        |  |                                                                                                                                                                                                                                                                                                                                  
|                                        |  | To support peoples dedication to serving their communities, every MBNA                                                                                                                                                                                                                                                          
|                                        |  | person has the opportunity to volunteer up to four hours per monthup to                                                                                                                                                                                                                                                         
|SEPTEMBER IITH                          |  | 48 hours per yearon company time. This provides local organizations and                                                                                                                                                                                                                                                         
|                                        |  | schools a significant source of volunteer assistance during the workday.                                                                                                                                                                                                                                                         
|                                        |  | In many cases, an entire department will make a long-term commitment to                                                                                                                                                                                                                                                          
|In September, the people                |  | a specific local school or charitable organization. In 2001, the people                                                                                                                                                                                                                                                          
|of MBNA quickly came to the             |  | of MBNA volunteered a total of 500,000 hours, including more than 100,000                                                                                                                                                                                                                                                        
|aid of those who were affected          |  | hours on company time during the workday to help others in the community.                                                                                                                                                                                                                                                      
|by the terrorist attacks in             |  | The company also has actively supported the United Way. Over the past 10                                                                                                                                                                                                                                                         
|New York, Washington, D.C.,             |  | years, MBNAs annual Community Campaign for the United Way has raised $43                                                                                                                                                                                                                                                        
|and Pennsylvania. In every one          |  | million to benefit local organizations, $33 million of which was                                                                                                                                                                                                                                                                 
|of MBNAs offices, people               |  | personally donated by individuals who work at MBNA.                                                                                                                                                                                                                                                                              
|donated blood and arranged              |  |                                                                                                                                                                                                                                                                                                                                  
|fundraising activities to               |  |                                                                                                                                                                                                                                                                                                                                  
|benefit the victims of                  |  |                                                                                                                                                                                                                                                                                                                                  
|the terrible tragedies.                 |  |                                                                                                                                                                                                                                                                                                                                  
|                                        |  | In 1997, MBNA created the nonprofit MBNA Foundation to expand and                                                                                                                                                                                                                                                                
|                                        |  | formalize the companys commitment to charity. The objectives of                                                                                                                                                                                                                                                                 
|In total, we donated nearly $6 million  |  | the MBNA Foundation are to help improve the quality and availability of                                                                                                                                                                                                                                                          
|to the relief effortincluding personal |  | education through grants and scholarships, assist organizations that                                                                                                                                                                                                                                                             
|donations of $1 million from 50 senior  |  | provide services to people in need, support programs that enable people                                                                                                                                                                                                                                                          
|\managers of the company and more       |  | to enjoy and learn more about the arts, and fund projects to improve                                                                                                                                                                                                                                                             
|than $600,000 in personal donations     |  | environmental conservation and preservation.                                                                                                                                                                                                                                                                                     
|from people throughout MBNA             |  |                                                                                                                                                                                                                                                                                                                                  
|These donations benefited the           |  | In 2001, the Foundation provided nearly $7 million in scholarships to                                                                                                                                                                                                                                                            
|September 11th Fund, the                |  | enable 390 talented, financially disadvantaged students to attend college.                                                                                                                                                                                                                                                       
|American Red Cross Disaster             |  | In addition, the Foundation celebrated the college graduation of its first                                                                                                                                                                                                                                                       
|Relief Fund, the Twin Towers            |  | scholarship recipients128 scholars in Delaware and Maine. Since 1997, the                                                                                                                                                                                                                                                       
|Fund, and the Marine Corps              |  | Foundation has awarded $21.1 million in community scholarships to nearly                                                                                                                                                                                                                                                         
|Law Enforcement Foundation.             |  | 1,300 students, including $6.7 million donated personally by senior officers                                                                                                                                                                                                                                                     
|                                        |  | of the company.                                                                                                                                                                                                                                                                                                                  
|                                        |  |                                                                                                                                                                                                                                                                                                                                  
|                                        |  | The Foundation also provided school grants to help teachers improve the                                                                                                                                                                                                                                                          
|                                        |  | quality of education in classrooms and libraries, and special education grants                                                                                                                                                                                                                                                   
|                                        |  | to help people with cognitive disabilities. In all, nearly 1,400 education grants                                                                                                                                                                                                                                                
|                                        |  | totaling $8 million were awarded in 2001. Since 1997, nearly 4,700 education                                                                                                                                                                                                                                                     
|                                        |  | grants totaling $26 million have been awarded. MBNAs commitment to                                                                                                                                                                                                                                                              
|                                        |  | excellence in education is also reflected in its America Scholars Program.                                                                                                                                                                                                                                                       
|                                        |  | The program was established in 1993 to provide college scholarships for the                                                                                                                                                                                                                                                      
|                                        |  | children of people who work here. To date, the program has helped to provide                                                                                                                                                                                                                                                     
|                                        |  | more than 1,500 scholarships totaling more than $21 million, funded in part by                                                                                                                                                                                                                                                   
|                                        |  | $3.4 million in personal donations from MBNAs senior managers. In addition                                                                                                                                                                                                                                                      
|                                        |  | to scholarships, the program also provides MBNA families with a wide range                                                                                                                                                                                                                                                       
|                                        |  | of college-oriented resources, including advisory, leadership, and college prep                                                                                                                                                                                                                                                  
|                                        |  | seminars; summer internships; and mentoring programs.                                                                                                                                                                                                                                                                            
|                                        |  |                                                                                                                                                                                                                                                                                                                                  
|                                        |  | Our Support Services department provides meaningful career opportunities                                                                                                                                                                                                                                                         
|                                        |  | to more than 300 highly capable people with cognitive or developmental                                                                                                                                                                                                                                                           






26 | Think of Yourself as a Customer






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##### 



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | HBCU                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Scholarship                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Program                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|disabilities. We also established the Helen F. Graham Grants Program to support                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|schools and community organizations involved with the education and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|of children and adults with cognitive disabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | The Foundation continually                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | works with students, teachers,                                                                                                                                                                                                                                                                                                                                                                                            
|An important source of funding for the Foundation is the annual Walk for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | and community leaders to find                                                                                                                                                                                                                                                                                                                                                                                             
|Education in Delaware and Maine. In 2001, more than 15,000 MBNA people, family                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | opportunities to make its                                                                                                                                                                                                                                                                                                                                                                                                 
|members, and friends participated in the Walks, raising $4 million in donations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | education and community                                                                                                                                                                                                                                                                                                                                                                                                   
|to fund MBNAs grant and scholarship programs. MBNA provides a corporate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | programs as effective as possible.                                                                                                                                                                                                                                                                                                                                                                                        
|donation, and since 1993, MBNAs senior managers have made $16 million in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | In the fourth quarter of                                                                                                                                                                                                                                                                                                                                                                                                  
|personal donations to the Foundation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 2000, in response to                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | discussions with many high                                                                                                                                                                                                                                                                                                                                                                                                
|As a company, MBNA does a great deal for the communitybut it is not just                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | school students and                                                                                                                                                                                                                                                                                                                                                                                                       
|the company alone. In addition to their time, individual people who work here                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | community leaders in                                                                                                                                                                                                                                                                                                                                                                                                      
|donated more than $60 million to these causes in recent years as well.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Wilmington, Delaware,                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | the Foundation developed                                                                                                                                                                                                                                                                                                                                                                                                  
|These are some of the activities of our Foundation, but we are also
        involved in many other things, including housing for the elderly, medical care,
        the visual and the performing arts, conservation and preservation, and
        community grants. The following list represents just a few of the organizations
        where MBNA volunteer and financial support is making a                                                                                                                                                                                                             |  | a new scholarship program
to support Delaware high                                                                                                                                                                                                                                                                                                                                                                        
|difference: Big Brothers/Big Sisters; Benedictine Foundation; Brady Center; Latin American
        Community Center; Home Counselors, Inc.; Boys and Girls Clubs; Food Bank; Easter
        Seals Friendship House; Ministry
        of Caring; Meals on Wheels; Special Olympics; West End Neighborhood House;
        Stella Maris; Habitat for Humanity; Junior Achievement; Literacy Volunteers of
        America; Ronald McDonald House; and the YMCA. For additional information on the MBNA Foundation and its activities, a
        Foundation annual report is available by calling 1-800-362-6255. |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | school students who were
interested in attending one
of the 91 Historically Black
Colleges and Universities
(HBCUs) throughout the
country. In the first year
of the program, $1 million in
MBNA scholarships enabled
70 Delaware students to
attend HBCUs. During
the year, our president,
Charles M. Cawley, received
the Thurgood Marshall
Scholarship Fund Corporate
Leadership Award on behalf
of the people of MBNA.




Think of Yourself as a
Customer | 27






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##### 



|                                                                    |  |                                                                    |  |                                                                      |  |                        
|------------------------------------------------------------------- |  | ------------------------------------------------------------------ |  | -------------------------------------------------------------------- |  | -----------------------
|                                                                    |  | MBNA Marketing
        Systems
        Headquarters                |  | 901 Washington Ave
        Portland, ME 04103
        (800) 626-2488 |  |                        
|United States                                                       |  |                                                                    |  |                                                                      |  | Canada                 
|Headquarters                                                        |  | 32 Washington St.                                                  |  | 18 Green Hill Dr.                                                    |  |                        
|                                                                    |  | Camden, ME 04843                                                   |  | Presque Isle, ME 04769                                               |  | 1600 James Naismith Dr.
|MBNA Corporation                                                    |  | (800) 386-6262                                                     |  | (800) 545-2977                                                       |  | Gloucester, Ontario    
|Wilmington, DE 19884                                                |  |                                                                    |  |                                                                      |  | K1B 5N8                
|(800) 441-7048                                                      |  | MBNA Marketing                                                     |  | 12 Water St.                                                         |  | (888) 871-6262         
|                                                                    |  | Systems                                                            |  | Rockland, ME 04841                                                   |  |                        
|United States                                                       |  | Offices                                                            |  | (800) 386-6262                                                       |  | 1000 de la Gauchetière 
|Regional Offices                                                    |  |                                                                    |  |                                                                      |  | Suite 4300             
|                                                                    |  | 1075 Silver Lake Blvd                                              |  | 100 Main St.                                                         |  | Montréal, Québec       
|75 Enterprise, Suite 200                                            |  | Dover, DE 19904                                                    |  | Suite 303                                                            |  | H3B 4W5                
|Aliso Viejo, CA 92656                                               |  | (800) 346-2620                                                     |  | Dover, NH 03820                                                      |  | (514) 390-2150         
|(888) 874-6262                                                      |  |                                                                    |  | (800) 330-5929                                                       |  |                        
|1501 Yamato Rd.
        Boca Raton, FL 33431
        (800) 841-6845 |  | 400 Christiana Rd.
        Newark, DE 19713
        (800) 441-7048 |  | 320 University Ave.
        Newark, NJ 07102
        (888) 652-6262  |  | Ireland                
|                                                                    |  | 1501 Yamato Rd.                                                    |  |                                                                      |  |                        
|210 Town Park Drive                                                 |  | Boca Raton, FL 33431                                               |  | 388 S. Main St.                                                      |  | 46 St. Stephens Green 
|Kennesaw, GA 30144                                                  |  | (800) 841-6845                                                     |  | Akron, OH 44311                                                      |  | Dublin 2, Ireland      
|(678) 797-7500                                                      |  |                                                                    |  | (800) 731-9260                                                       |  | (011) 353-1-619-6000   
|                                                                    |  | 210 Town Park Drive                                                |  |                                                                      |  |                        
|11333 McCormick Rd.                                                 |  | Kennesaw, GA 30144                                                 |  | 25875 Science Park Dr.                                               |  | Dublin Road            
|Hunt Valley, MD 21031                                               |  | (678) 797-7500                                                     |  | Beachwood, OH 44122                                                  |  | Carrick-on-Shannon     
|(888) 680-6945                                                      |  |                                                                    |  | (800) 410-6262                                                       |  | Co Leitrim, Ireland    
|                                                                    |  | 11333 McCormick Rd.                                                |  |                                                                      |  | (011) 353-7-856-044    
|1 Hatley Rd.                                                        |  | Hunt Valley, MD 21031                                              |  | 2568 Park Centre Blvd.                                               |  |                        
|Belfast, ME 04915                                                   |  | (888) 680-6945                                                     |  | State College, PA 16801                                              |  |                        
|(800) 843-3526                                                      |  |                                                                    |  | (800) 471-6262                                                       |  |                        
|                                                                    |  | 5 Industrial Pkwy.                                                 |  |                                                                      |  |                        
|320 University Ave                                                  |  | Brunswick, ME 04011                                                |  | 16001 N. Dallas Pkwy.                                                |  | United Kingdom         
|Newark, NJ 07102                                                    |  | (800) 645-6682                                                     |  | Dallas, TX 75248                                                     |  |                        
|(888) 652-6262                                                      |  |                                                                    |  | (800) 435-9672                                                       |  | Stansfield House       
|                                                                    |  | 274 Front St.                                                      |  |                                                                      |  | Chester Business Park  
|9 W. 57th St.                                                       |  | Farmington, ME 04938                                               |  |                                                                      |  | Wrexham Rd.            
|New York, NY 10019                                                  |  | (888) 465-3110                                                     |  |                                                                      |  | CH4 9QQ                
|(800) 746-6262                                                      |  |                                                                    |  |                                                                      |  | Stansfield House       
|                                                                    |  | 50 Pleasant St.                                                    |  |                                                                      |  | (011) 44-1244-672000   
|25875 Science Park Dr.                                              |  | Fort Kent, ME 04743                                                |  |                                                                      |  |                        
|Beachwood, OH 44122                                                 |  | (888) 336-6262                                                     |  |                                                                      |  | 86 Jermyn St.          
|(800) 410-6262                                                      |  |                                                                    |  |                                                                      |  | London SW1Y 6JD        
|                                                                    |  | 16 Godfrey Dr.                                                     |  |                                                                      |  | United Kingdom         
|16001 N. Dallas Pkwy.                                               |  | Orono, ME 04473                                                    |  |                                                                      |  | (011) 44-207-389-6200  
|Dallas, TX 75248                                                    |  | (800) 503-6262                                                     |  |                                                                      |  |                        
|(800) 435-9672                                                      |  |                                                                    |  |                                                                      |  |                        





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##### 



MBNA Corporation and Subsidiaries

|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |             |            | 
|----------------------------------------------------------------------------- | ----------------------------- | ------------------- | ---------- | ----------- | ---------- | ---- | ---------- | ----------- | ---------- | - | ---------- | ----------- | ---------- | 
|Ten-Year Statistical Summary                                                  |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                             
|dollars in
thousands, except per share amounts                                |                               |                     |            |             |            |     
|                                                                             
|Year Ended December 31,                                                       |                               | 2001                |            | 2000        |            | 1999
|                                                                             
|Income Statement Data for the Year (a)                                        |                               |                     |            |             |            |      |            |             |            |   |            |            
|Net interest income                                                           |                               | $                   | 1,391,037  |             |            | $    | 1,178,632  |             |            | $ | 1,011,234  |            
|Provision for possible credit losses                                          |                               |                     | 1,140,615  |             |            |      | 547,309    |             |            |   | 636,614    |            
|Other operating income                                                        |                               |                     | 6,939,619  |             |            |      | 5,136,786  |             |            |   | 4,358,052  |            
|Other operating expense                                                       |                               |                     | 4,474,831  |             |            |      | 3,647,702  |             |            |   | 3,077,708  |            
|Net income                                                                    |                               |                     | 1,694,291  |             |            |      | 1,312,532  |             |            |   | 1,024,423  |            
|Per Common Share Data for the Year                                            |                               |                     |            |             |            |      |            |             |            |   |            |            
|Earnings (b)                                                                  |                               | $                   | 1.97       |             |            | $    | 1.58       |             |            | $ | 1.26       |            
|Earningsassuming dilution (b)                                                |                               |                     | 1.92       |             |            |      | 1.53       |             |            |   | 1.21       |            
|Dividends                                                                     |                               |                     | .36        |             |            |      | .32        |             |            |   | .28        |            
|Book value                                                                    |                               |                     | 8.90       |             |            |      | 7.53       |             |            |   | 4.97       |            
|Ratios                                                                        |                               |                     |            |             |            |      |            |             |            |   |            |            
|Return on average total assets                                                |                               |                     | 4.16       | %           |            |      | 3.94       | %           |            |   | 3.62       | %          
|Return on average stockholders equity                                        |                               |                     | 24.07      |             |            |      | 25.79      |             |            |   | 27.18      |            
|Average receivables to average deposits                                       |                               |                     | 80.88      |             |            |      | 85.79      |             |            |   | 85.33      |            
|Stockholders equity to total assets                                          |                               |                     | 17.16      |             |            |      | 17.13      |             |            |   | 13.61      |            
|Loan receivables (c):                                                         |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Delinquency (d)               |                     |            | 4.64        |            |      |            | 3.89        |            |   |            | 3.82        |           
|                                                                              | Net credit losses (a)         |                     |            | 4.20        |            |      |            | 3.38        |            |   |            | 3.65        |           
|Managed loans (c):                                                            |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Delinquency                   |                     |            | 5.09        |            |      |            | 4.49        |            |   |            | 4.45        |           
|                                                                              | Net credit losses             |                     |            | 4.74        |            |      |            | 4.39        |            |   |            | 4.33        |           
|                                                                              | Net interest margin (e)       |                     |            | 8.42        |            |      |            | 7.08        |            |   |            | 7.42        |           
|Managed Loan Data                                                             |                               |                     |            |             |            |      |            |             |            |   |            |            
|At year end:                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Loans held for securitization |                     | $          | 9,929,948   |            |      | $          | 8,271,933   |            |   | $          | 9,692,616   |           
|                                                                              | Loan portfolio                |                     |            | 14,703,616  |            |      |            | 11,682,904  |            |   |            | 7,971,093   |           
|                                                                              | Securitized loans             |                     |            | 72,862,487  |            |      |            | 68,835,884  |            |   |            | 54,591,804  |           
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              |                               | Total managed loans |            | $           | 97,496,051 |      |            | $           | 88,790,721 |   |            | $           | 72,255,513 | 
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|Average for the year:                                                         |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Loans held for securitization |                     | $          | 6,909,840   |            |      | $          | 8,129,333   |            |   | $          | 4,071,394   |           
|                                                                              | Loan portfolio                |                     |            | 13,429,548  |            |      |            | 9,588,815   |            |   |            | 10,351,101  |           
|                                                                              | Securitized loans             |                     |            | 70,560,600  |            |      |            | 59,726,838  |            |   |            | 49,706,760  |           
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              |                               | Total managed loans |            | $           | 90,899,988 |      |            | $           | 77,444,986 |   |            | $           | 64,129,255 | 
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|For the year:                                                                 |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Sales and cash advance volume |                     | $          | 142,261,636 |            |      | $          | 125,683,731 |            |   | $          | 105,806,935 |           
|Managed Income Statement Data for the Year (a)                                |                               |                     |            |             |            |      |            |             |            |   |            |            
|Net interest income                                                           |                               | $                   | 8,204,142  |             |            | $    | 5,837,109  |             |            | $ | 5,187,801  |            
|Provision for possible credit losses                                          |                               |                     | 4,592,629  |             |            |      | 3,348,289  |             |            |   | 2,885,149  |            
|Other operating income                                                        |                               |                     | 3,578,528  |             |            |      | 3,279,289  |             |            |   | 2,430,020  |            
|Other operating expense                                                       |                               |                     | 4,474,831  |             |            |      | 3,647,702  |             |            |   | 3,077,708  |            
|Net income                                                                    |                               |                     | 1,694,291  |             |            |      | 1,312,532  |             |            |   | 1,024,423  |            
|Balance Sheet Data at Year End (a)                                            |                               |                     |            |             |            |      |            |             |            |   |            |            
|Investment securities and money market instruments                            |                               | $                   | 6,577,734  |             |            | $    | 5,255,615  |             |            | $ | 4,572,052  |            
|Loans held for securitization                                                 |                               |                     | 9,929,948  |             |            |      | 8,271,933  |             |            |   | 9,692,616  |            
|Credit card loans                                                             |                               |                     | 8,261,575  |             |            |      | 7,798,772  |             |            |   | 6,060,564  |            
|Other consumer loans                                                          |                               |                     | 6,442,041  |             |            |      | 3,884,132  |             |            |   | 1,910,529  |            
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Total loan portfolio          |                     |            | 14,703,616  |            |      |            | 11,682,904  |            |   |            | 7,971,093   |           
|Reserve for possible credit losses                                            |                               |                     | (833,423   | )           |            |      | (527,573   | )           |            |   | (516,261   | )          
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Net loan portfolio            |                     |            | 13,870,193  |            |      |            | 11,155,331  |            |   |            | 7,454,832   |           
|Total assets                                                                  |                               |                     | 45,447,945 |             |            |      | 38,678,096 |             |            |   | 30,859,132 |            
|Total deposits                                                                |                               |                     | 27,094,745 |             |            |      | 24,343,595 |             |            |   | 18,714,753 |            
|Long-term debt and bank notes                                                 |                               |                     | 6,867,033  |             |            |      | 5,735,635  |             |            |   | 5,708,880  |            
|Stockholders equity                                                          |                               |                     | 7,798,718  |             |            |      | 6,627,278  |             |            |   | 4,199,443  |            
|Average Balance Sheet Data for the Year (a)                                   |                               |                     |            |             |            |      |            |             |            |   |            |            
|Investment securities and money market instruments                            |                               | $                   | 6,560,000  |             |            | $    | 5,082,598  |             |            | $ | 5,797,141  |            
|Loans held for securitization                                                 |                               |                     | 6,909,840  |             |            |      | 8,129,333  |             |            |   | 4,071,394  |            
|Credit card loans                                                             |                               |                     | 7,887,115  |             |            |      | 6,784,742  |             |            |   | 8,184,713  |            
|Other consumer loans                                                          |                               |                     | 5,542,433  |             |            |      | 2,804,073  |             |            |   | 2,166,388  |            
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Total loan portfolio          |                     |            | 13,429,548  |            |      |            | 9,588,815   |            |   |            | 10,351,101  |           
|Reserve for possible credit losses                                            |                               |                     | (656,654   | )           |            |      | (549,033   | )           |            |   | (416,627   | )          
|                                                                              |                               |                     |            |             |            |      |            |             |            |   |            |            
|                                                                              | Net loan portfolio            |                     |            | 12,772,894  |            |      |            | 9,039,782   |            |   |            | 9,934,474   |           
|Total assets                                                                  |                               |                     | 40,764,316 |             |            |      | 33,299,176 |             |            |   | 28,310,222 |            
|Total deposits                                                                |                               |                     | 25,147,782 |             |            |      | 20,654,087 |             |            |   | 16,901,334 |            
|Long-term debt and bank notes                                                 |                               |                     | 6,309,446  |             |            |      | 5,699,638  |             |            |   | 5,974,276  |            
|Stockholders equity                                                          |                               |                     | 7,039,986  |             |            |      | 5,088,882  |             |            |   | 3,769,539  |            
|Weighted average common shares outstanding (000)                              |                               |                     | 851,830    |             |            |      | 820,551    |             |            |   | 801,020    |            
|Weighted average common shares outstanding and common stock equivalents (000) |                               |                     | 876,153    |             |            |      | 846,535    |             |            |   | 837,083    |            



---

|(a) |  | In December 2001, MBNA Corporation (the Corporation) elected to amend its
securitization agreements to transfer the legal right to recoveries from
charged-off securitized loans from the Corporation to the securitization
transaction cash flows. Previously, the Corporation recognized these recoveries
in the reserve for possible credit losses and provision for possible credit
losses. The Corporation now includes these recoveries in accounts receivable
from securitization and other operating income. For purposes of comparability,
certain prior period amounts have been reclassified. This reclassification did
not affect the Corporations net income, earnings per common share, or managed
loan quality ratios.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Earnings per common share is computed using net income applicable to common
stock and weighted average common shares outstanding, whereas earnings per
common shareassuming dilution includes the potential dilutive effect of common
stock equivalents in accordance with Statement of Financial Accounting
Standards No. 128, Earnings per Share.
The Corporations common stock equivalents are solely related to employee and
director stock options. The Corporation has no other common stock equivalents.                                                                                                                                                                                                                     

30 | Think of Yourself as a Customer





---



##### 



| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|
| |  | 1998 |            |   | 1997 |   |            | 1996 |  |   | 1995       |   |  | 1994 |            |   | 1993 |   |            | 1992 | 
|
| |  | $    | 806,404    |   |      | $ | 731,376    |      |  | $ | 640,477    |   |  | $    | 544,226    |   |      | $ | 532,108    |      |  | $ | 474,323    |   |  | $ | 357,515    |  
| |  |      | 463,372    |   |      |   | 349,493    |      |  |   | 275,477    |   |  |      | 173,875    |   |      |   | 132,853    |      |  |   | 115,969    |   |  |   | 113,398    |  
| |  |      | 3,318,237  |   |      |   | 2,863,346  |      |  |   | 1,993,176  |   |  |      | 1,460,317  |   |      |   | 1,037,956  |      |  |   | 757,142    |   |  |   | 593,369    |  
| |  |      | 2,407,204  |   |      |   | 2,223,121  |      |  |   | 1,626,882  |   |  |      | 1,246,067  |   |      |   | 996,110    |      |  |   | 924,872    |   |  |   | 565,467    |  
| |  |      | 776,266    |   |      |   | 622,500    |      |  |   | 474,495    |   |  |      | 353,099    |   |      |   | 266,593    |      |  |   | 207,796    |   |  |   | 172,732    |  
| |  | $    | 1.01       |   |      | $ | .80        |      |  | $ | .61        |   |  | $    | .47        |   |      | $ | .35        |      |  | $ | .28        |   |  | $ | .23        |  
| |  |      | .97        |   |      |   | .76        |      |  |   | .59        |   |  |      | .46        |   |      |   | .35        |      |  |   | .27        |   |  |   | .23        |  
| |  |      | .24        |   |      |   | .21        |      |  |   | .19        |   |  |      | .17        |   |      |   | .14        |      |  |   | .13        |   |  |   | .12        |  
| |  |      | 2.90       |   |      |   | 2.34       |      |  |   | 1.87       |   |  |      | 1.48       |   |      |   | 1.22       |      |  |   | 1.02       |   |  |   | .88        |  
| |  |      | 3.38       | % |      |   | 3.25       | %    |  |   | 3.26       | % |  |      | 3.09       | % |      |   | 3.16       | %    |  |   | 3.15       | % |  |   | 2.96       | %
| |  |      | 36.91      |   |      |   | 35.56      |      |  |   | 34.46      |   |  |      | 35.51      |   |      |   | 32.70      |      |  |   | 30.01      |   |  |   | 28.55      |  
| |  |      | 86.04      |   |      |   | 88.82      |      |  |   | 92.50      |   |  |      | 91.60      |   |      |   | 93.05      |      |  |   | 85.34      |   |  |   | 69.98      |  
| |  |      | 9.27       |   |      |   | 9.25       |      |  |   | 10.00      |   |  |      | 9.56       |   |      |   | 9.51       |      |  |   | 10.51      |   |  |   | 10.25      |  
| |  |      | 3.86       |   |      |   | 3.93       |      |  |   | 3.59       |   |  |      | 3.11       |   |      |   | 2.60       |      |  |   | 3.03       |   |  |   | 3.78       |  
| |  |      | 3.42       |   |      |   | 3.16       |      |  |   | 2.68       |   |  |      | 2.31       |   |      |   | 2.30       |      |  |   | 2.73       |   |  |   | 3.15       |  
| |  |      | 4.62       |   |      |   | 4.59       |      |  |   | 4.28       |   |  |      | 3.70       |   |      |   | 3.03       |      |  |   | 3.27       |   |  |   | 3.99       |  
| |  |      | 4.31       |   |      |   | 3.97       |      |  |   | 3.35       |   |  |      | 2.74       |   |      |   | 2.59       |      |  |   | 2.97       |   |  |   | 3.33       |  
| |  |      | 7.47       |   |      |   | 7.50       |      |  |   | 7.62       |   |  |      | 7.42       |   |      |   | 8.16       |      |  |   | 8.47       |   |  |   | 7.22       |  
| |  | $    | 1,692,268  |   |      | $ | 2,900,198  |      |  | $ | 2,469,974  |   |  | $    | 3,168,427  |   |      | $ | 2,299,026  |      |  | $ | 741,869    |   |  | $ | 678,000    |  
| |  |      | 11,776,099 |   |      |   | 8,261,876  |      |  |   | 7,659,078  |   |  |      | 4,967,491  |   |      |   | 3,407,974  |      |  |   | 3,725,509  |   |  |   | 3,300,650  |  
| |  |      | 46,172,739 |   |      |   | 38,217,786 |      |  |   | 28,494,481 |   |  |      | 18,575,786 |   |      |   | 13,036,864 |      |  |   | 7,891,140  |   |  |   | 5,881,479  |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  | $    | 59,641,106 |   |      | $ | 49,379,860 |      |  | $ | 38,623,533 |   |  | $    | 26,711,704 |   |      | $ | 18,743,864 |      |  | $ | 12,358,518 |   |  | $ | 9,860,129  |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  | $    | 2,577,482  |   |      | $ | 2,875,212  |      |  | $ | 2,529,484  |   |  | $    | 2,269,362  |   |      | $ | 1,330,011  |      |  | $ | 642,750    |   |  | $ | 733,473    |  
| |  |      | 9,352,807  |   |      |   | 7,563,301  |      |  |   | 6,174,095  |   |  |      | 4,792,536  |   |      |   | 4,000,271  |      |  |   | 3,425,935  |   |  |   | 2,659,305  |  
| |  |      | 40,970,936 |   |      |   | 32,746,963 |      |  |   | 22,514,014 |   |  |      | 15,440,499 |   |      |   | 9,462,401  |      |  |   | 6,596,387  |   |  |   | 5,528,394  |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  | $    | 52,901,225 |   |      | $ | 43,185,476 |      |  | $ | 31,217,593 |   |  | $    | 22,502,397 |   |      | $ | 14,792,683 |      |  | $ | 10,665,072 |   |  | $ | 8,921,172  |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  | $    | 82,968,874 |   |      | $ | 66,399,425 |      |  | $ | 48,666,129 |   |  | $    | 34,272,909 |   |      | $ | 25,078,918 |      |  | $ | 17,889,747 |   |  | $ | 14,523,570 |  
| |  | $    | 4,313,576  |   |      | $ | 3,523,987  |      |  | $ | 2,598,437  |   |  | $    | 1,849,475  |   |      | $ | 1,343,217  |      |  | $ | 1,017,574  |   |  | $ | 756,096    |  
| |  |      | 2,333,461  |   |      |   | 1,732,218  |      |  |   | 1,087,742  |   |  |      | 627,832    |   |      |   | 393,202    |      |  |   | 321,576    |   |  |   | 303,497    |  
| |  |      | 1,681,154  |   |      |   | 1,453,460  |      |  |   | 847,481    |   |  |      | 609,025    |   |      |   | 487,196    |      |  |   | 419,498    |   |  |   | 384,887    |  
| |  |      | 2,407,204  |   |      |   | 2,223,121  |      |  |   | 1,626,882  |   |  |      | 1,246,067  |   |      |   | 996,110    |      |  |   | 924,872    |   |  |   | 565,467    |  
| |  |      | 776,266    |   |      |   | 622,500    |      |  |   | 474,495    |   |  |      | 353,099    |   |      |   | 266,593    |      |  |   | 207,796    |   |  |   | 172,732    |  
| |  | $    | 5,440,939  |   |      | $ | 4,594,709  |      |  | $ | 3,194,664  |   |  | $    | 2,669,402  |   |      | $ | 2,269,081  |      |  | $ | 1,440,684  |   |  | $ | 1,345,995  |  
| |  |      | 1,692,268  |   |      |   | 2,900,198  |      |  |   | 2,469,974  |   |  |      | 3,168,427  |   |      |   | 2,299,026  |      |  |   | 741,869    |   |  |   | 678,000    |  
| |  |      | 8,975,051  |   |      |   | 5,830,221  |      |  |   | 5,722,299  |   |  |      | 4,090,553  |   |      |   | 2,882,232  |      |  |   | 2,949,995  |   |  |   | 2,659,007  |  
| |  |      | 2,801,048  |   |      |   | 2,431,655  |      |  |   | 1,936,779  |   |  |      | 876,938    |   |      |   | 525,742    |      |  |   | 775,514    |   |  |   | 641,643    |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  |      | 11,776,099 |   |      |   | 8,261,876  |      |  |   | 7,659,078  |   |  |      | 4,967,491  |   |      |   | 3,407,974  |      |  |   | 3,725,509  |   |  |   | 3,300,650  |  
| |  |      | (296,474   | ) |      |   | (211,744   | )    |  |   | (184,720   | ) |  |      | (134,295   | ) |      |   | (123,335   | )    |  |   | (113,310   | ) |  |   | (108,435   | )
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  |      | 11,479,625 |   |      |   | 8,050,132  |      |  |   | 7,474,358  |   |  |      | 4,833,196  |   |      |   | 3,284,639  |      |  |   | 3,612,199  |   |  |   | 3,192,215  |  
| |  |      | 25,806,260 |   |      |   | 21,305,513 |      |  |   | 17,035,342 |   |  |      | 13,228,889 |   |      |   | 9,671,858  |      |  |   | 7,319,756  |   |  |   | 6,454,511  |  
| |  |      | 15,407,040 |   |      |   | 12,913,213 |      |  |   | 10,151,686 |   |  |      | 8,608,914  |   |      |   | 6,632,489  |      |  |   | 5,241,883  |   |  |   | 4,568,791  |  
| |  |      | 5,939,025  |   |      |   | 5,478,917  |      |  |   | 3,950,358  |   |  |      | 2,657,600  |   |      |   | 1,687,357  |      |  |   | 779,553    |   |  |   | 470,601    |  
| |  |      | 2,391,035  |   |      |   | 1,970,050  |      |  |   | 1,704,308  |   |  |      | 1,265,058  |   |      |   | 919,578    |      |  |   | 769,131    |   |  |   | 661,290    |  
| |  | $    | 4,905,943  |   |      | $ | 3,851,867  |      |  | $ | 2,927,351  |   |  | $    | 2,451,783  |   |      | $ | 1,684,316  |      |  | $ | 1,364,350  |   |  | $ | 1,572,911  |  
| |  |      | 2,577,482  |   |      |   | 2,875,212  |      |  |   | 2,529,484  |   |  |      | 2,269,362  |   |      |   | 1,330,011  |      |  |   | 642,750    |   |  |   | 733,473    |  
| |  |      | 6,820,538  |   |      |   | 5,456,349  |      |  |   | 4,907,814  |   |  |      | 4,160,230  |   |      |   | 3,207,110  |      |  |   | 2,735,191  |   |  |   | 2,050,487  |  
| |  |      | 2,532,269  |   |      |   | 2,106,952  |      |  |   | 1,266,281  |   |  |      | 632,306    |   |      |   | 793,161    |      |  |   | 690,744    |   |  |   | 608,818    |  
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  |      | 9,352,807  |   |      |   | 7,563,301  |      |  |   | 6,174,095  |   |  |      | 4,792,536  |   |      |   | 4,000,271  |      |  |   | 3,425,935  |   |  |   | 2,659,305  |  
| |  |      | (256,676   | ) |      |   | (204,765   | )    |  |   | (155,768   | ) |  |      | (128,403   | ) |      |   | (118,538   | )    |  |   | (111,253   | ) |  |   | (105,900   | )
| |  |      |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |            |   |  |   |            |  
| |  |      | 9,096,131  |   |      |   | 7,358,536  |      |  |   | 6,018,327  |   |  |      | 4,664,133  |   |      |   | 3,881,733  |      |  |   | 3,314,682  |   |  |   | 2,553,405  |  
| |  |      | 22,982,349 |   |      |   | 19,125,282 |      |  |   | 14,571,288 |   |  |      | 11,425,721 |   |      |   | 8,432,511  |      |  |   | 6,596,419  |   |  |   | 5,829,052  |  
| |  |      | 13,866,645 |   |      |   | 11,752,887 |      |  |   | 9,408,843  |   |  |      | 7,709,840  |   |      |   | 5,728,432  |      |  |   | 4,767,669  |   |  |   | 4,847,911  |  
| |  |      | 5,873,122  |   |      |   | 4,639,430  |      |  |   | 3,029,250  |   |  |      | 2,212,591  |   |      |   | 1,199,520  |      |  |   | 537,609    |   |  |   | 116,301    |  
| |  |      | 2,103,043  |   |      |   | 1,750,459  |      |  |   | 1,377,072  |   |  |      | 994,287    |   |      |   | 815,243    |      |  |   | 692,460    |   |  |   | 605,079    |  
| |  |      | 751,856    |   |      |   | 751,837    |      |  |   | 751,812    |   |  |      | 751,839    |   |      |   | 751,840    |      |  |   | 751,840    |   |  |   | 752,360    |  
| |  |      | 789,421    |   |      |   | 789,801    |      |  |   | 778,473    |   |  |      | 770,464    |   |      |   | 762,515    |      |  |   | 760,118    |   |  |   | 760,187    |  



---

|(c) |  | In December 2000, the Corporation implemented the Federal Financial
Institutions Examination Councils (FFIEC) revised policy on the
classification of consumer loans. Without the one-time FFIEC adjustment, loan
delinquency and managed loan delinquency would have been 4.19% and 4.94%,
respectively, at December 31, 2000, and loan receivable net credit losses,
managed net credit losses, and managed net interest margin would have been
3.03%, 3.94%, and 7.14%, respectively, for the year ended December 31, 2000.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) |  | Loan delinquency does not include loans held for securitization or
securitized loans.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(e) |  | Managed net interest margin is presented on a fully taxable equivalent
basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                    






Think of Yourself as a Customer | 31






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##### 



MBNA Corporation and Subsidiaries

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

---

This discussion is intended to further the readers understanding of the
consolidated financial statements, financial condition, and results of
operations of MBNA Corporation. It should be read in conjunction with the
consolidated financial statements, notes, and tables included in this report.
For purposes of comparability, certain prior period amounts have been
reclassified. The reclassification did not affect the Corporations net income,
earnings per common share, or managed loan quality ratios.

INTRODUCTION

MBNA Corporation (the Corporation), a bank holding company located in
Wilmington, Delaware, is the parent company of MBNA America Bank, N.A. (the
Bank), a national bank and the Corporations principal subsidiary. The Bank
has two wholly owned foreign bank subsidiaries, MBNA Europe Bank Limited (MBNA

Europe) located in the United Kingdom and MBNA Canada Bank (MBNA Canada)
located in Canada. Through the Bank, the Corporation is the largest independent
credit card lender in the world and is the leading issuer of endorsed credit
cards, marketed primarily to members of associations and customers of
financial institutions. In addition to its credit card lending, the Corporation
also makes other consumer loans and offers insurance and deposit products. The
Corporation is also the parent of MBNA America (Delaware), N.A. (MBNA
Delaware), which offers home equity loans and business card products.

The Corporations primary business is giving our Customers the ability to have
what they need today and pay for it out of future income by lending money
through credit card and other consumer loans. The Corporation obtains funds to
make these loans to its Customers primarily through raising deposits, the
issuance of short-term and long-term debt, and the process of asset
securitization. Asset securitization removes loan receivables from the
consolidated statement of financial condition through the sale of loan
receivables to a trust. The trust sells securities backed by those loan
receivables to investors. The trusts are independent of the Corporation and the
Corporation has no control over the trusts. The Corporation receives interest
and fee income from its loan Customers, which the Corporation uses to pay
operating and business development expenses, cover its credit losses, and pay
interest expense to its depositors, creditors, and investors for the use of
their funds.

The Corporation generates interest and other income through finance charges
assessed on outstanding loan receivables, securitization income, interchange
income, credit card and other fees, insurance income, and interest earned on
investment securities, money market instruments, and other interest-earning
assets. The Corporations primary costs are the costs of funding its loan
receivables, investment securities, and other assets, which include interest
paid on deposits, short-term borrowings, and long-term debt and bank notes;
credit losses; royalties paid to endorsing organizations and financial
institutions; business development and operating expenses; and income taxes.

EARNINGS SUMMARY

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Net income for 2001 increased 29.1% to $1.7 billion or $1.92 per common share
from $1.3 billion or $1.53 per common share in 2000. Net income for 2000
increased 28.1% from $1.0 billion or $1.21 per common share in 1999. Earnings
per common share amounts are presented assuming dilution.
The overall growth in earnings for 2001 was primarily attributable to the
growth in the Corporations managed loans outstanding and an increase in the
managed net interest margin, offset by higher credit losses and other operating
expenses. Managed loans consist of the Corporations loans held for
securitization, loan portfolio, and securitized loans. The Corporations
average managed loans increased 17.4% to $90.9 billion for 2001 from $77.4
billion for 2000. Total managed loans at December 31, 2001 were $97.5 billion,
an $8.7 billion increase from December 31, 2000. The increase in the managed
net interest margin to 8.42% in 2001 from 7.08% in 2000 reflects actions by the
Federal Open Market Committee (FOMC) of the Federal Reserve throughout 2001
which impacted overall market interest rates and decreased the Corporations
on-balance-sheet and securitization funding costs. During 2001, the Corporation
acquired 439 new endorsements from organizations and added 9.5 million new
accounts. The Corporations average managed loans increased 20.8% for 2000 to
$77.4 billion from 1999 levels. Total managed loans at December 31, 2000 were
$88.8 billion, a $16.5 billion increase from December 31, 1999. The growth in
managed loans for 2000 includes the $5.7 billion acquisition of the consumer
and commercial revolving credit loan portfolio from First Union Corporation in
September 2000. The managed net interest margin decreased for 2000 to 7.08%
from 7.42% in 1999. During 2000, the Corporation acquired 459 new | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 



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##### 



MBNA Corporation and Subsidiaries

endorsements
from organizations and added 13.7 million new accounts. The growth in managed
loans for 2001 and 2000 was a result of the Corporations continued marketing
efforts and loan portfolio acquisitions.

The Corporation continues to be an active participant in the asset
securitization market. Asset securitization removes loan receivables from the
consolidated statement of financial condition by the sale of loan receivables
to investors, generally through a trust, that qualifies as a sale under
generally accepted accounting principles. The Corporation continues to own and
service the accounts that generate the loan receivables sold to the trust.
Asset securitization converts interest income, interchange income, credit card
and other fees, insurance income, and recoveries in excess of interest paid to
investors, credit losses, and other trust expenses into securitization income.
The Corporation had $72.9 billion of securitized loans at December 31, 2001 and
$68.8 billion of securitized loans at December 31, 2000. During 2001, the
Corporation securitized $12.4 billion of credit card loan receivables, as
compared to $15.8 billion of credit card and other consumer loan receivables
during 2000. In addition, the Corporation assumed $3.9 billion of previously
securitized credit card loan receivables during 2000 as part of the acquisition
of the consumer and commercial revolving credit loan portfolio from First Union
Corporation.

The Corporations return on average total assets for 2001 increased to 4.16%
from 3.94% for 2000 and 3.62% for 1999. The increases in the return on average
total assets are a result of the Corporations net income growing faster than
its average total assets as a result of asset securitization. The Corporations
return on average stockholders equity was 24.07% for 2001, as compared to
25.79% for 2000 and 27.18% for 1999. The lower return on average stockholders
equity during 2001 and 2000 was primarily a result of an increase in average
stockholders equity from the issuance of 50 million shares of common stock in
August 2000 for $1.6 billion, net of issuance costs.

NET INTEREST INCOME

Net interest income represents interest income on total interest-earning
assets, on a fully taxable equivalent basis where appropriate, less interest
expense on total interest-bearing liabilities. Table 3 illustrates the impact
that rate and volume changes had on the Corporations net interest income for
the years presented. Fully taxable equivalent basis represents the income on
total interest-earning assets that is either tax-exempt or taxed at a reduced
rate, adjusted to give effect to the prevailing incremental federal income tax
rate, and adjusted for nondeductible carrying costs and state income taxes,
where applicable. Yield calculations, where appropriate, include these
adjustments.

Net interest income, on a fully taxable equivalent basis, increased $211.7
million to $1.4 billion for 2001 from 2000. Average interest-earning assets
increased $4.3 billion for 2001 from 2000, primarily as a result of an increase
in average loan receivables of $2.6 billion. The yield on average
interest-earning assets decreased 68 basis points to 11.50% for 2001 from 2000.
Average interest-bearing liabilities increased $4.9 billion for 2001 from 2000,
primarily as a result of an increase of $4.3 billion in average
interest-bearing deposits. The decrease in the rate paid on average
interest-bearing liabilities of 63 basis points to 5.82% for 2001 from 6.45% in
2000 reflects actions by the FOMC throughout 2001 which impacted overall market
interest rates and lowered the Corporations cost of funds. The net impact of
the changes in interest rates on the Corporations net interest income was a
$60.6 million increase in 2001, compared to a decrease of $72.5 million in
2000.

Net interest income, on a fully taxable equivalent basis, increased $167.8
million to $1.2 billion for 2000 from 1999. Average interest-earning assets
increased $2.7 billion for 2000 from 1999. The yield on average
interest-earning assets increased 96 basis points to 12.18% for 2000 from 1999,
primarily as a result of a change in the mix of interest-earning assets to
higher yielding loan receivables from lower yielding investment securities and
money market instruments. Average interest-bearing liabilities increased $3.3
billion for 2000 from 1999 resulting from an increase of $3.6 billion in
average domestic interest-bearing deposits, which were used to fund the
increase in average interest-earning assets, accounts receivable from
securitization, and the value of acquired Customer accounts. The rate paid on
average interest-bearing liabilities increased 66 basis points to 6.45% for
2000 from 1999 which reflected actions by the FOMC throughout 2000 which
impacted overall market interest rates and raised the Corporations cost of
funds.

The Corporations net interest margin, on a fully taxable equivalent basis, was
5.00% for 2001, as compared to 5.01% for 2000 and 4.86% for 1999. The net
interest margin represents net interest income on a fully taxable equivalent
basis expressed as a percentage of average total interest-earning assets. The
actions by the FOMC throughout 2001 which impacted overall market rates did not
have as large an effect on the Corporations net interest margin
as on the Corporations managed net interest margin, since the Corporations
on-balance-sheet interest-bearing liabilities have a higher percentage of
fixed-rate funding sources and are therefore less sensitive to interest rate
changes than the Corporations securitization transactions, which primarily
have variable rates.



Think of Yourself as a Customer | 33




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##### 



MBNA Corporation and Subsidiaries

The Corporations on-balance-sheet interest-bearing
liabilities fund the Corporations loan receivables as well as its lower
yielding investment securities and money market instruments and
noninterest-earning assets, thereby reducing net interest income and the net
interest margin. The Corporations securitization transactions are used to fund
the Corporations securitized loans.

INVESTMENT SECURITIES AND MONEY MARKET INSTRUMENTS

The Corporation seeks to maintain its investment securities and money market
instruments position at a level appropriate for the Corporations liquidity
needs. The Corporations average investment securities and average money market
instruments are affected by the timing of receipt of funds from asset
securitizations, deposits, loan payments, long-term debt and bank notes, and
maturities of investment securities. Funds received from these sources are
generally invested in short-term, liquid money market instruments and
investment securities available-for-sale until the funds are needed for loan
growth and other liquidity needs. In addition, the Corporation increased its
liquidity position in the fourth quarter of 2001 in anticipation of possible
market disruptions in response to the tragic events on September 11, 2001.
Average investment securities and money market instruments as a percentage of
average interest-earning assets were 23.5% for 2001, compared to 21.5% for 2000
and 27.8% for 1999.

Interest income on investment securities for 2001, on a fully taxable
equivalent basis, decreased to $169.4 million from 2000. The decrease in
interest income on investment securities for 2001 was a result of an 82 basis
point decrease in the yield earned on average investment securities, offset by
an increase in average investment securities of $269.4 million for 2001 from
2000. Interest income on investment securities, on a fully taxable equivalent
basis, increased to $180.9 million in 2000 from 1999. The increase in interest
income on investment securities for 2000 was primarily the result of a $524.2
million increase in average investment securities from 1999. In addition, the
yield earned on average investment securities increased 50 basis points for
2000 from 1999.

Money market instruments include interest-earning time deposits in other banks
and federal funds sold and securities purchased under resale agreements.
Interest income on money market instruments was $128.0 million for 2001 as
average money market instruments increased $1.2 billion for 2001. This higher
level of average money market instruments was offset by a decrease of 235 basis
points in the yield earned on average money market instruments from 2000.
Interest income on money market instruments decreased $40.3 million to $127.2
million for 2000. The decrease in interest income on money market instruments
for 2000 was primarily a result of a decrease of $1.2 billion in average money
market instruments from 1999, offset by a 118 basis point increase in the yield
earned on these instruments.

The increase in average investment securities and the decline in average money
market instruments for 2000 was primarily a result of the Corporation
reinvesting funds during the fourth quarter of 1999 from maturing money market
instruments into U.S. Treasury obligations, included in the investment
securities available-for-sale portfolio, as part of the Corporations Year 2000
readiness planning. During 1999, average money market instruments were also
higher than normal as a result of the temporary investment of the net proceeds
from the issuance of common stock by the Corporation in January 1999, until
used to complete the acquisition of the credit card business of PNC Bank, N.A.
in March 1999 and for other general corporate purposes.

Note F to the audited consolidated financial statements provides further detail
regarding the Corporations investment securities.

OTHER INTEREST-EARNING ASSETS

Interest income on other interest-earning assets increased $22.7 million to
$117.4 million for 2001 from 2000, as compared to an increase of $17.2 million
to $94.7 million for 2000 from 1999 as a result of increases in the level of
other interest-earning assets. The Corporation adopted Emerging Issues Task
Force Issue 99-20, Recognition of Interest Income and Impairment on Purchased
and Retained Beneficial Interests in Securitized Financial Assets (EITF
99-20) on April 1, 2001. As a result, the Corporation now records accretion of
interest income related to beneficial interests retained in a securitization
transaction accounted for as a sale as interest income in the Corporations
consolidated statement of income. This income was previously recorded as
securitization income in the Corporations consolidated statement of income.
The Corporation includes these retained beneficial interests in accounts
receivable from securitization on the consolidated statement of financial
condition. The implementation of EITF 99-20 did not impact the Corporations
consolidated net income.

LOAN RECEIVABLES

Loan receivables consist of the Corporations loans held for
securitization and loan portfolio.

Interest income generated by the Corporations loan receivables increased
$322.1 million to $2.8 billion for 2001 from 2000. The increase for 2001 was
primarily the result of an increase in average loan receivables of $2.6 billion
from 2000. The yield earned by the Corporation for 2001 on these receivables
decreased 21 basis points to 13.73%.



---





---



##### 



MBNA Corporation and Subsidiaries

During 2000, interest income on loan receivables increased $510.6 million to
$2.5 billion from 1999. The increase in interest income during 2000 was
primarily the result of a $3.3 billion increase in average loan receivables.
The yield earned by the Corporation for 2000 on these receivables increased 35
basis points to 13.94%.

Table 1 presents the Corporations loan receivables at year end distributed by
loan type, excluding securitized loans. Loan receivables increased 23.4% to
$24.6 billion at December 31, 2001, as compared to $20.0 billion and $17.7
billion at December 31, 2000 and 1999, respectively.

Domestic credit card loan receivables increased to $14.4 billion at December
31, 2001, from $13.0 billion at December 31, 2000 and 1999. The increase in
domestic credit card loan receivables was a result of growth in the
Corporations net loan originations, portfolio acquisitions, and previously
securitized loans amortizing back into the Corporations loan portfolio, offset
by the securitization of loan receivables. The Corporation acquired $706.7
million of domestic credit card loan receivables during 2001. In addition, the
Corporation securitized $10.8 billion of domestic credit card loan receivables,
while $7.9 billion of previously securitized domestic credit card loan
receivables amortized back into the Corporations loan portfolio during 2001.

During 2000, domestic credit card loan receivables remained unchanged from 1999
as domestic credit card loan originations through marketing programs and
domestic credit card loan
portfolio acquisitions were offset by a net increase in securitized domestic
credit card loan receivables. The Corporation acquired $3.1 billion of domestic
credit card loan receivables during 2000. As part of the 2000 acquisition
activity, the Corporation acquired the consumer and commercial revolving credit
loan portfolio from First Union Corporation, of which $1.6 billion of domestic
credit card loan receivables were recorded. In addition, the Corporation
assumed $3.9 billion of previously securitized domestic credit card loans as
part of the First Union Corporation portfolio acquisition.



During 2000, the
Corporation securitized $12.5 billion of domestic credit card loan receivables,
while $5.2 billion of previously securitized domestic credit card loan
receivables amortized back into the Corporations loan portfolio. The yield on
average domestic credit card loan receivables was 13.61% for 2001, as compared
to 13.99% for 2000 and 13.49% for 1999.

Domestic other consumer loan receivables increased to $6.1 billion at December
31, 2001, compared to $3.8 billion and $2.3 billion at December 31, 2000 and
1999, respectively. The increase in domestic other consumer loan receivables
during 2001 and 2000 was a result of loan growth in the Corporations lines of
credit accessed through checks and sales finance accounts. In addition,
domestic other consumer loan receivables increased during 2000 as a result of
the consumer loan portfolio acquisitions of $465.3 million, which included
$251.4 million from First Union Corporation. The yield on average domestic
other consumer loan receivables was 15.01% for 2001, as compared to 15.03% for
2000 and 14.06%

Table 1: Loan Receivables Distribution

---

dollars in thousands|




|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |      |       |  
|--------------------------------- | -------------- | -------------------------------------------- | --------- | --------- | ---------- | ---- | ---- | ---- | ----- | - | --------- | --------- | ---------- |  | ---- | ---- | ----- | - | --------- | --------- | ---------- |  | --- | ---- | ----- | -
|December 31,                      |                | 2001                                         |           | 2000      |            | 1999
|                                 
|Loans Held for Securitization (a) |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|Domestic:                         |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  | Credit card    |                                              | $         | 7,943,965 |            |      |      | 32.2 | %     |   | $         | 6,396,652 |            |  |      | 32.1 | %     |   | $         | 7,835,429 |            |  |     | 44.3 | %    
|                                  | Other consumer |                                              |           | 1,032,697 |            |      |      | 4.2  |       |   |           | 1,022,756 |            |  |      | 5.1  |       |   |           | 1,001,271 |            |  |     | 5.7  |      
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  |                | Total domestic loans held for
securitization |           |           | 8,976,662  |      |      |      | 36.4  |   |           |           | 7,419,408  |  |      |      | 37.2  |   |           |           | 8,836,700  |  |     |      | 50.0  |  
|Foreign (b)                       |                |                                              | 953,286   |           |            |      | 3.9  |      |       |   | 852,525   |           |            |  | 4.3  |      |       |   | 855,916   |           |            |  | 4.9 |     
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  |                | Total loans held for
securitization          |           |           | 9,929,948  |      |      |      | 40.3  |   |           |           | 8,271,933  |  |      |      | 41.5  |   |           |           | 9,692,616  |  |     |      | 54.9  |  
|Loan Portfolio                    |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|Domestic:                         |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  | Credit card    |                                              |           | 6,439,471 |            |      |      | 26.1 |       |   |           | 6,612,913 |            |  |      | 33.1 |       |   |           | 5,116,381 |            |  |     | 28.9 |      
|                                  | Other consumer |                                              |           | 5,094,198 |            |      |      | 20.7 |       |   |           | 2,799,289 |            |  |      | 14.0 |       |   |           | 1,268,019 |            |  |     | 7.2  |      
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  |                | Total domestic loan portfolio                |           |           | 11,533,669 |      |      |      | 46.8  |   |           |           | 9,412,202  |  |      |      | 47.1  |   |           |           | 6,384,400  |  |     |      | 36.1  |  
|Foreign (b)                       |                |                                              | 3,169,947 |           |            |      | 12.9 |      |       |   | 2,270,702 |           |            |  | 11.4 |      |       |   | 1,586,693 |           |            |  | 9.0 |     
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  |                | Total loan portfolio                         |           |           | 14,703,616 |      |      |      | 59.7  |   |           |           | 11,682,904 |  |      |      | 58.5  |   |           |           | 7,971,093  |  |     |      | 45.1  |  
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     
|                                  |                | Total loan receivables                       |           | $         | 24,633,564 |      |      |      | 100.0 | % |           | $         | 19,954,837 |  |      |      | 100.0 | % |           | $         | 17,663,709 |  |     |      | 100.0 | %
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |      |      |       |   |           |           |            |  |     |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |      |       |  
|--------------------------------- | -------------- | -------------------------------------------- | --------- | --------- | ---------- |  | --- | ---- | ----- | - | ------- | --------- | ---------- |  | --- | ---- | ----- | -
|December 31,                      |                | 1998                                         |           | 1997     
|                                 
|Loans Held for Securitization (a) |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|Domestic:                         |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  | Credit card    |                                              | $         | 1,135,004 |            |  |     | 8.4  | %     |   | $       | 2,297,400 |            |  |     | 20.6 | %    
|                                  | Other consumer |                                              |           | 114,747   |            |  |     | .9   |       |   |         |          |            |  |     |     |      
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total domestic loans held for
securitization |           |           | 1,249,751  |  |     |      | 9.3   |   |         |           | 2,297,400  |  |     |      | 20.6  |  
|Foreign (b)                       |                |                                              | 442,517   |           |            |  | 3.3 |      |       |   | 602,798 |           |            |  | 5.4 |     
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loans held for
securitization          |           |           | 1,692,268  |  |     |      | 12.6  |   |         |           | 2,900,198  |  |     |      | 26.0  |  
|Loan Portfolio                    |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|Domestic:                         |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  | Credit card    |                                              |           | 7,981,106 |            |  |     | 59.2 |       |   |         | 5,475,933 |            |  |     | 49.0 |      
|                                  | Other consumer |                                              |           | 2,748,511 |            |  |     | 20.4 |       |   |         | 2,187,216 |            |  |     | 19.6 |      
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total domestic loan portfolio                |           |           | 10,729,617 |  |     |      | 79.6  |   |         |           | 7,663,149  |  |     |      | 68.6  |  
|Foreign (b)                       |                |                                              | 1,046,482 |           |            |  | 7.8 |      |       |   | 598,727 |           |            |  | 5.4 |     
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loan portfolio                         |           |           | 11,776,099 |  |     |      | 87.4  |   |         |           | 8,261,876  |  |     |      | 74.0  |  
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loan receivables                       |           | $         | 13,468,367 |  |     |      | 100.0 | % |         | $         | 11,162,074 |  |     |      | 100.0 | %
|                                  |                |                                              |           |           |            |  |     |      |       |   |         |           |            |  |     |     

---



|(a) |  | Loans held for securitization includes the lesser of loans eligible for
securitization or sale, or loans which management intends to securitize or sell
within one year, and loans which were originated through certain endorsing
organizations or financial institutions who have the contractual right to
purchase the loans from the Corporation at fair value.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Note U to the audited consolidated financial statements provides the
foreign loan distribution between credit card and other consumer loans.                                                                                                                                                                                                                       



Think of Yourself as a Customer| 35






---



##### 



MBNA Corporation and Subsidiaries

Table 2: Statements of Average Balances, Yields and Rates, Income or Expense

---



|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |         |           | 
|---------------------------------- | --------------------------------- | ------------------------------------------------------------------- | ---------- | --------------------------------------------------- | --------- | --------- | ---------- | ------ | ---- | ---------- | ----- | ------- | ------- | ------- | --------- | ---------- | --------- | --------- | ---------- | ----- | ---- | ----- | ----- | ------ | ------- | ------- | --------- | 
|Years Ended December 31,           |                                   | 2001                                                                |            | 2000                                               
|                                  
|                                   |                                   |                                                                     |            |                                                     |           | Average   |            | Yield/ |      | Income     |       | Average |         | Yield/  |           | Income    
|                                   |                                   |                                                                     |            |                                                     |           | Balance   |            | Rate   |      | or Expense |       | Balance |         | Rate    |           | or Expense
|                                   |                                  
|Assets                             |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|Interest-earning assets:           |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   | Money market instruments:         |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |        
|                                   |                                   | Interest-earning time deposits in other
banks:                      |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |        
|                                   |                                   |                                                                     | Domestic   |                                                     | $         | 1,199     |            |        |      | 3.59       | %     |         | $       | 43      |           |            | $         | 9,562     |            |       |      | 5.65  | %     |        | $       | 540     |          
|                                   |                                   |                                                                     | Foreign    |                                                     |           | 1,690,774 |            |        |      | 4.22       |       |         |         | 71,298  |           |            |           | 1,324,770 |            |       |      | 6.28  |       |        |         | 83,187  |          
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total interest-earning time deposits
in other banks |           |           | 1,691,973  |        |      |            | 4.22  |         |         |         | 71,341    |            |           |           | 1,334,332  |       |      |       | 6.27  |        |         |         | 83,727    | 
|                                   |                                   | Federal funds sold and securities purchased
under resale agreements |            |                                                     | 1,526,879 |           |            |        | 3.71 |            |       |         | 56,651  |         |           |            | 676,512   |           |            |       | 6.43 |       |       |        | 43,486  |        
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total money market instruments                      |           |           | 3,218,852  |        |      |            | 3.98  |         |         |         | 127,992   |            |           |           | 2,010,844  |       |      |       | 6.33  |        |         |         | 127,213   | 
|                                   | Investment securities (a):        |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |        
|                                   |                                   | Taxable                                                             |            |                                                     | 3,238,438 |           |            |        | 5.08 |            |       |         | 164,577 |         |           |            | 2,969,987 |           |            |       | 5.86 |       |       |        | 174,109 |        
|                                   |                                   | Tax-exempt (b)                                                      |            |                                                     | 102,710   |           |            |        | 4.68 |            |       |         | 4,807   |         |           |            | 101,767   |           |            |       | 6.65 |       |       |        | 6,763   |        
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total investment securities                         |           |           | 3,341,148  |        |      |            | 5.07  |         |         |         | 169,384   |            |           |           | 3,071,754  |       |      |       | 5.89  |        |         |         | 180,872   | 
|                                   | Other interest-earning assets
(a) |                                                                     |            | 978,190                                             |           |           |            | 12.00  |      |            |       | 117,383 |         |         |           | 788,996    |           |           |            | 12.00 |      |       |       | 94,680 |        
|                                   | Loan receivables:                 |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |        
|                                   |                                   | Loans held for
securitization:                                      |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |        
|                                   |                                   |                                                                     | Domestic:  |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |         |          
|                                   |                                   |                                                                     |            | Credit card                                         |           |           | 5,178,099  |        |      |            | 14.09 |         |         |         | 729,534   |            |           |           | 6,052,151  |       |      |       | 14.25 |        |         |         | 862,372   | 
|                                   |                                   |                                                                     |            | Other consumer                                      |           |           | 605,683    |        |      |            | 15.11 |         |         |         | 91,536    |            |           |           | 1,043,722  |       |      |       | 15.62 |        |         |         | 163,037   | 
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total domestic loans held for
securitization        |           |           | 5,783,782  |        |      |            | 14.20 |         |         |         | 821,070   |            |           |           | 7,095,873  |       |      |       | 14.45 |        |         |         | 1,025,409 | 
|                                   |                                   |                                                                     | Foreign    |                                                     |           | 1,126,058 |            |        |      | 13.17      |       |         |         | 148,349 |           |            |           | 1,033,460 |            |       |      | 13.20 |       |        |         | 136,383 |          
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total loans held for securitization                 |           |           | 6,909,840  |        |      |            | 14.03 |         |         |         | 969,419   |            |           |           | 8,129,333  |       |      |       | 14.29 |        |         |         | 1,161,792 | 
|                                   |                                   | Loan portfolio:                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |        
|                                   |                                   |                                                                     | Domestic:  |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |        |         |         |          
|                                   |                                   |                                                                     |            | Credit card                                         |           |           | 6,368,297  |        |      |            | 13.22 |         |         |         | 841,783   |            |           |           | 5,706,303  |       |      |       | 13.71 |        |         |         | 782,454   | 
|                                   |                                   |                                                                     |            | Other consumer                                      |           |           | 4,388,008  |        |      |            | 14.99 |         |         |         | 657,818   |            |           |           | 1,988,794  |       |      |       | 14.72 |        |         |         | 292,829   | 
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total domestic loan portfolio                       |           |           | 10,756,305 |        |      |            | 13.94 |         |         |         | 1,499,601 |            |           |           | 7,695,097  |       |      |       | 13.97 |        |         |         | 1,075,283 | 
|                                   |                                   |                                                                     | Foreign    |                                                     |           | 2,673,243 |            |        |      | 12.08      |       |         |         | 323,006 |           |            |           | 1,893,718 |            |       |      | 12.30 |       |        |         | 232,886 |          
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total loan portfolio                                |           |           | 13,429,548 |        |      |            | 13.57 |         |         |         | 1,822,607 |            |           |           | 9,588,815  |       |      |       | 13.64 |        |         |         | 1,308,169 | 
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total loan receivables                              |           |           | 20,339,388 |        |      |            | 13.73 |         |         |         | 2,792,026 |            |           |           | 17,718,148 |       |      |       | 13.94 |        |         |         | 2,469,961 | 
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total interest-earning assets                       |           |           | 27,877,578 |        |      |            | 11.50 |         |         |         | 3,206,785 |            |           |           | 23,589,742 |       |      |       | 12.18 |        |         |         | 2,872,726 | 
|Cash and due from banks            |                                   |                                                                     | 744,798    |                                                     |           |           |            |        |      |            |       |         |         |         | 676,007   |            |           |           |            |       |      |       |       |       
|Premises and equipment,
net        |                                   |                                                                     | 1,972,000  |                                                     |           |           |            |        |      |            |       |         |         |         | 1,695,014 |            |           |           |            |       |      |       |       |       
|Other assets                       |                                   |                                                                     | 10,826,594 |                                                     |           |           |            |        |      |            |       |         |         |         | 7,887,446 |            |           |           |            |       |      |       |       |       
|Reserve for possible credit
losses |                                   |                                                                     | (656,654   | )                                                   |           |           |            |        |      |            |       |         |         |         | (549,033  | )          |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       
|                                   |                                   |                                                                     |            | Total assets                                        |           | $         | 40,764,316 |        |      |            |       |         |         |         |           |            |           | $         | 33,299,176 |       |      |       |       |        |         |         |           | 
|                                   |                                   |                                                                     |            |                                                     |           |           |            |        |      |            |       |         |         |         |           |            |           |           |            |       |      |       |       |       



---



##### 



|Liabilities and Stockholders
Equity |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|------------------------------------ | -------------------------- | ---------------------------------- | ------------------------------------- | ------------------------------------------ | - | ---------- | ---------- |  |  | ---- | ---- |  |  | --------- | --------- |  | - | ---------- | ---------- |  |  | ---- | ---- | 
|Interest-bearing
liabilities:        |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     | Interest-bearing deposits: |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            | Domestic:                          |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Time deposits                         |                                            | $ | 17,999,374 |            |  |  | 6.43 |      |  |  | 1,157,995 |           |  | $ | 14,502,004 |            |  |  | 6.39 |      | 
|                                     |                            |                                    | Money market deposit
accounts         |                                            |   | 5,534,407  |            |  |  | 4.51 |      |  |  | 249,425   |           |  |   | 4,615,183  |            |  |  | 6.17 |      | 
|                                     |                            |                                    | Interest-bearing transaction
accounts |                                            |   | 43,675     |            |  |  | 3.46 |      |  |  | 1,513     |           |  |   | 39,635     |            |  |  | 5.15 |      | 
|                                     |                            |                                    | Savings accounts                      |                                            |   | 16,967     |            |  |  | 2.99 |      |  |  | 508       |           |  |   | 9,208      |            |  |  | 5.09 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total domestic interest-bearing
deposits   |   |            | 23,594,423 |  |  |      | 5.97 |  |  |           | 1,409,441 |  |   |            | 19,166,030 |  |  |      | 6.34 | 
|                                     |                            | Foreign:                           |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Time deposits                         |                                            |   | 701,937    |            |  |  | 5.02 |      |  |  | 35,265    |           |  |   | 801,631    |            |  |  | 5.73 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total interest-bearing deposits            |   |            | 24,296,360 |  |  |      | 5.95 |  |  |           | 1,444,706 |  |   |            | 19,967,661 |  |  |      | 6.31 | 
|                                     | Borrowed funds:            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            | Short-term borrowings:             |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Domestic                              |                                            |   | 383,638    |            |  |  | 4.39 |      |  |  | 16,858    |           |  |   | 88,415     |            |  |  | 6.11 |      | 
|                                     |                            |                                    | Foreign                               |                                            |   | 179,993    |            |  |  | 4.39 |      |  |  | 7,908     |           |  |   | 179,917    |            |  |  | 5.79 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total short-term borrowings                |   |            | 563,631    |  |  |      | 4.39 |  |  |           | 24,766    |  |   |            | 568,332    |  |  |      | 6.01 | 
|                                     |                            | Long-term debt and bank notes
(c): |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Domestic                              |                                            |   | 4,620,270  |            |  |  | 5.23 |      |  |  | 241,805   |           |  |   | 4,610,744  |            |  |  | 7.03 |      | 
|                                     |                            |                                    | Foreign                               |                                            |   | 1,689,176  |            |  |  | 6.09 |      |  |  | 102,788   |           |  |   | 1,088,894  |            |  |  | 6.71 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total long-term debt and bank notes        |   |            | 6,309,446  |  |  |      | 5.46 |  |  |           | 344,593   |  |   |            | 5,699,638  |  |  |      | 6.97 | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total borrowed funds                       |   |            | 6,873,077  |  |  |      | 5.37 |  |  |           | 369,359   |  |   |            | 6,267,970  |  |  |      | 6.88 | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total interest-bearing liabilities         |   |            | 31,169,437 |  |  |      | 5.82 |  |  |           | 1,814,065 |  |   |            | 26,235,631 |  |  |      | 6.45 | 
|Noninterest-bearing
deposits         |                            |                                    | 851,422                               |                                            |   |            |            |  |  |      |      |  |  |           | 686,426   |  |   |            |            |  |  |      |      | 
|Other liabilities                    |                            |                                    | 1,703,471                             |                                            |   |            |            |  |  |      |      |  |  |           | 1,288,237 |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total liabilities                          |   |            | 33,724,330 |  |  |      |      |  |  |           |           |  |   |            | 28,210,294 |  |  |      |      | 
|Stockholders equity                 |                            |                                    | 7,039,986                             |                                            |   |            |            |  |  |      |      |  |  |           | 5,088,882 |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total liabilities and
stockholders equity |   | $          | 40,764,316 |  |  |      |      |  |  |           |           |  |   | $          | 33,299,176 |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Net interest income                        |   |            |            |  |  |      |      |  |  | $         | 1,392,720 |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      |  |  |           |           |  |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Net interest margin                        |   |            |            |  |  |      | 5.00 |  |  |           |           |  |   |            |            |  |  |      | 5.01 | 
|                                     |                            |                                    |                                       | Interest rate spread                       |   |            |            |  |  |      | 5.68 |  |  |           |           |  |   |            |            |  |  |      | 5.73 | 



---



##### 



[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |        |         |         |           | 
|---------------------------------- | --------------------------------- | ------------------------------------------------------------------- | --------- | --------------------------------------------------- | --------- | --------- | ---------- | ------ | ---- | ---------- | ----- | ------ | ------- | ------- | --------- | 
|Year Ended December 31,            |                                   | 1999                                                               
|                                  
|                                   |                                   |                                                                     |           |                                                     |           | Average   |            | Yield/ |      | Income    
|                                   |                                   |                                                                     |           |                                                     |           | Balance   |            | Rate   |      | or Expense
|                                   |                                   |                                                                     |           |                                                     |           |          
|Assets                             |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|Interest-earning assets:           |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   | Money market instruments:         |                                                                     |           |                                                     |           |           |            |        |      |            |       |        |        
|                                   |                                   | Interest-earning time deposits in other banks:                      |           |                                                     |           |           |            |        |      |            |       |        |         |        
|                                   |                                   |                                                                     | Domestic  |                                                     | $         | 3,450     |            |        |      | 3.91       | %     |        | $       | 135     |          
|                                   |                                   |                                                                     | Foreign   |                                                     |           | 2,309,914 |            |        |      | 5.20       |       |        |         | 120,099 |          
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total interest-earning time deposits
in other banks |           |           | 2,313,364  |        |      |            | 5.20  |        |         |         | 120,234   | 
|                                   |                                   | Federal funds sold and securities purchased
under resale agreements |           |                                                     | 936,265   |           |            |        | 5.05 |            |       |        | 47,264  |        
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total money market instruments                      |           |           | 3,249,629  |        |      |            | 5.15  |        |         |         | 167,498   | 
|                                   | Investment securities (a):        |                                                                     |           |                                                     |           |           |            |        |      |            |       |        |        
|                                   |                                   | Taxable                                                             |           |                                                     | 2,451,511 |           |            |        | 5.38 |            |       |        | 131,818 |        
|                                   |                                   | Tax-exempt (b)                                                      |           |                                                     | 96,001    |           |            |        | 5.75 |            |       |        | 5,519   |        
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total investment securities                         |           |           | 2,547,512  |        |      |            | 5.39  |        |         |         | 137,337   | 
|                                   | Other interest-earning assets (a) |                                                                     |           | 645,576                                             |           |           |            | 12.00  |      |            |       | 77,469 |        
|                                   | Loan receivables:                 |                                                                     |           |                                                     |           |           |            |        |      |            |       |        |        
|                                   |                                   | Loans held for securitization:                                      |           |                                                     |           |           |            |        |      |            |       |        |         |        
|                                   |                                   |                                                                     | Domestic: |                                                     |           |           |            |        |      |            |       |        |         |         |          
|                                   |                                   |                                                                     |           | Credit card                                         |           |           | 2,644,375  |        |      |            | 13.66 |        |         |         | 361,186   | 
|                                   |                                   |                                                                     |           | Other consumer                                      |           |           | 518,921    |        |      |            | 13.76 |        |         |         | 71,384    | 
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total domestic loans held for
securitization        |           |           | 3,163,296  |        |      |            | 13.67 |        |         |         | 432,570   | 
|                                   |                                   |                                                                     | Foreign   |                                                     |           | 908,098   |            |        |      | 13.52      |       |        |         | 122,735 |          
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total loans held for securitization                 |           |           | 4,071,394  |        |      |            | 13.64 |        |         |         | 555,305   | 
|                                   |                                   | Loan portfolio:                                                     |           |                                                     |           |           |            |        |      |            |       |        |         |        
|                                   |                                   |                                                                     | Domestic: |                                                     |           |           |            |        |      |            |       |        |         |         |          
|                                   |                                   |                                                                     |           | Credit card                                         |           |           | 7,183,094  |        |      |            | 13.43 |        |         |         | 964,912   | 
|                                   |                                   |                                                                     |           | Other consumer                                      |           |           | 1,988,622  |        |      |            | 14.14 |        |         |         | 281,117   | 
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total domestic loan portfolio                       |           |           | 9,171,716  |        |      |            | 13.59 |        |         |         | 1,246,029 | 
|                                   |                                   |                                                                     | Foreign   |                                                     |           | 1,179,385 |            |        |      | 13.40      |       |        |         | 158,034 |          
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total loan portfolio                                |           |           | 10,351,101 |        |      |            | 13.56 |        |         |         | 1,404,063 | 
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total loan receivables                              |           |           | 14,422,495 |        |      |            | 13.59 |        |         |         | 1,959,368 | 
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total interest-earning assets                       |           |           | 20,865,212 |        |      |            | 11.22 |        |         |         | 2,341,672 | 
|Cash and due from banks            |                                   |                                                                     | 541,644   |                                                     |           |           |            |        |      |            |       |       
|Premises and equipment, net        |                                   |                                                                     | 1,651,977 |                                                     |           |           |            |        |      |            |       |       
|Other assets                       |                                   |                                                                     | 5,668,016 |                                                     |           |           |            |        |      |            |       |       
|Reserve for possible credit losses |                                   |                                                                     | (416,627  | )                                                   |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       
|                                   |                                   |                                                                     |           | Total assets                                        |           | $         | 28,310,222 |        |      |            |       |        |         |         |           | 
|                                   |                                   |                                                                     |           |                                                     |           |           |            |        |      |            |       |       



---



##### 



|Liabilities and Stockholders Equity |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|------------------------------------ | -------------------------- | ---------------------------------- | ------------------------------------- | ------------------------------------------ | - | ---------- | ---------- |  |  | ---- | ---- | 
|Interest-bearing liabilities:        |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     | Interest-bearing deposits: |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            | Domestic:                          |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Time deposits                         |                                            | $ | 11,193,882 |            |  |  | 5.90 |      | 
|                                     |                            |                                    | Money market deposit accounts         |                                            |   | 4,308,305  |            |  |  | 5.01 |      | 
|                                     |                            |                                    | Interest-bearing transaction accounts |                                            |   | 36,895     |            |  |  | 4.27 |      | 
|                                     |                            |                                    | Savings accounts                      |                                            |   | 37,808     |            |  |  | 4.33 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total domestic interest-bearing deposits   |   |            | 15,576,890 |  |  |      | 5.65 | 
|                                     |                            | Foreign:                           |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Time deposits                         |                                            |   | 742,210    |            |  |  | 5.33 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total interest-bearing deposits            |   |            | 16,319,100 |  |  |      | 5.63 | 
|                                     | Borrowed funds:            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            | Short-term borrowings:             |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Domestic                              |                                            |   | 441,993    |            |  |  | 5.67 |      | 
|                                     |                            |                                    | Foreign                               |                                            |   | 222,383    |            |  |  | 5.08 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total short-term borrowings                |   |            | 664,376    |  |  |      | 5.47 | 
|                                     |                            | Long-term debt and bank notes (c): |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    | Domestic                              |                                            |   | 5,450,998  |            |  |  | 6.18 |      | 
|                                     |                            |                                    | Foreign                               |                                            |   | 523,278    |            |  |  | 6.88 |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total long-term debt and bank notes        |   |            | 5,974,276  |  |  |      | 6.24 | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total borrowed funds                       |   |            | 6,638,652  |  |  |      | 6.16 | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total interest-bearing liabilities         |   |            | 22,957,752 |  |  |      | 5.79 | 
|Noninterest-bearing deposits         |                            |                                    | 582,234                               |                                            |   |            |            |  |  |      |      | 
|Other liabilities                    |                            |                                    | 1,000,697                             |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total liabilities                          |   |            | 24,540,683 |  |  |      |      | 
|Stockholders equity                 |                            |                                    | 3,769,539                             |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Total liabilities and
stockholders equity |   | $          | 28,310,222 |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Net interest income                        |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       |                                            |   |            |            |  |  |      |      | 
|                                     |                            |                                    |                                       | Net interest margin                        |   |            |            |  |  |      | 4.86 | 
|                                     |                            |                                    |                                       | Interest rate spread                       |   |            |            |  |  |      | 5.43 | 

---



|(a) |  | Average balances for investment securities available-for-sale and other
interest-earning assets are based on market values; if these securities were
carried at amortized cost, there would not be a material impact on the net
interest margin.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The fully taxable equivalent adjustment for the years ended December 31,
2001, 2000, and 1999, was $1,683, $2,367, and $1,932, respectively.                                                                                                    
|   
|(c) |  | Includes the impact of interest rate swap agreements and foreign exchange
swap agreements used to change a portion of fixed-rate funding sources to
floating-rate funding sources.                                                              

---





---



##### 



MBNA Corporation and Subsidiaries

Table 3: Rate-Volume Variance Analysis (a)

---



|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |        |         |          |  
|----------------------------- | ------------------------------ | ------------------------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ------ | ------- | -------- | ---- | ------- | ------- | -------- | - | ------ | ------- | -------- | -
|Year Ended December 31,       |                                | 2001 Compared to 2000                                              
|                             
|                              |                                |                                                                     |                                       |                                                     |        | Volume  |          | Rate |         | Total  
|Interest-Earning Assets       |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|Money market instruments:     |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                | Interest-earning time deposits in other banks:                      |                                       |                                                     |        |         |          |      |         |         |          |   |        |        
|                              |                                |                                                                     | Domestic                              |                                                     | $      | (351    | )        |      | $       | (146    | )        |   | $      | (497    | )       
|                              |                                |                                                                     | Foreign                               |                                                     |        | 19,534  |          |      |         | (31,423 | )        |   |        | (11,889 | )       
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total interest-earning time deposits in other banks |        |         | 19,183   |      |         |         | (31,569  | ) |        |         | (12,386  | )
|                              |                                | Federal funds sold and securities purchased under resale agreements |                                       |                                                     | 37,368 |         |          |      | (24,203 | )       |          |   | 13,165 |        
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total money market instruments                      |        |         | 56,551   |      |         |         | (55,772  | ) |        |         | 779      |  
|Investment securities:        |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                | Taxable                                                             |                                       |                                                     | 14,890 |         |          |      | (24,422 | )       |          |   | (9,532 | )      
|                              |                                | Tax-exempt                                                          |                                       |                                                     | 62     |         |          |      | (2,018  | )       |          |   | (1,956 | )      
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total investment securities                         |        |         | 14,952   |      |         |         | (26,440  | ) |        |         | (11,488  | )
|Other interest-earning assets |                                |                                                                     | 22,703                                |                                                     |        |         |         |      |         |         | 22,703   |  
|Loan receivables:             |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                | Loans held for securitization:                                      |                                       |                                                     |        |         |          |      |         |         |          |   |        |        
|                              |                                |                                                                     | Domestic:                             |                                                     |        |         |          |      |         |         |          |   |        |         |         
|                              |                                |                                                                     |                                       | Credit card                                         |        |         | (123,245 | )    |         |         | (9,593   | ) |        |         | (132,838 | )
|                              |                                |                                                                     |                                       | Other consumer                                      |        |         | (66,360  | )    |         |         | (5,141   | ) |        |         | (71,501  | )
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total domestic loans held for securitization        |        |         | (189,605 | )    |         |         | (14,734  | ) |        |         | (204,339 | )
|                              |                                |                                                                     | Foreign                               |                                                     |        | 12,199  |          |      |         | (233    | )        |   |        | 11,966  |         
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total loans held for securitization                 |        |         | (177,406 | )    |         |         | (14,967  | ) |        |         | (192,373 | )
|                              |                                | Loan portfolio:                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |        |        
|                              |                                |                                                                     | Domestic:                             |                                                     |        |         |          |      |         |         |          |   |        |         |         
|                              |                                |                                                                     |                                       | Credit card                                         |        |         | 88,279   |      |         |         | (28,950  | ) |        |         | 59,329   |  
|                              |                                |                                                                     |                                       | Other consumer                                      |        |         | 359,577  |      |         |         | 5,412    |   |        |         | 364,989  |  
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total domestic loan portfolio                       |        |         | 447,856  |      |         |         | (23,538  | ) |        |         | 424,318  |  
|                              |                                |                                                                     | Foreign                               |                                                     |        | 94,258  |          |      |         | (4,138  | )        |   |        | 90,120  |         
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total loan portfolio                                |        |         | 542,114  |      |         |         | (27,676  | ) |        |         | 514,438  |  
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total loan receivables                              |        |         | 364,708  |      |         |         | (42,643  | ) |        |         | 322,065  |  
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total interest income                               |        |         | 458,914  |      |         |         | (124,855 | ) |        |         | 334,059  |  
|                             
|Interest-Bearing Liabilities  |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|Interest-bearing deposits:    |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              | Domestic:                      |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |       
|                              |                                |                                                                     | Time deposits                         |                                                     |        | 224,970 |          |      |         | 5,728   |          |   |        | 230,698 |         
|                              |                                |                                                                     | Money market deposit accounts         |                                                     |        | 50,229  |          |      |         | (85,625 | )        |   |        | (35,396 | )       
|                              |                                |                                                                     | Interest-bearing transaction accounts |                                                     |        | 192     |          |      |         | (720    | )        |   |        | (528    | )       
|                              |                                |                                                                     | Savings accounts                      |                                                     |        | 286     |          |      |         | (247    | )        |   |        | 39      |         
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total domestic interest-bearing deposits            |        |         | 275,677  |      |         |         | (80,864  | ) |        |         | 194,813  |  
|                              | Foreign:                       |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |       
|                              |                                |                                                                     | Time deposits                         |                                                     |        | (5,360  | )        |      |         | (5,322  | )        |   |        | (10,682 | )       
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total interest-bearing deposits                     |        |         | 270,317  |      |         |         | (86,186  | ) |        |         | 184,131  |  
|Borrowed funds:               |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              | Short-term borrowings:         |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |       
|                              |                                |                                                                     | Domestic                              |                                                     |        | (289    | )        |      |         | (6,592  | )        |   |        | (6,881  | )       
|                              |                                |                                                                     | Foreign                               |                                                     |        | 4       |          |      |         | (2,509  | )        |   |        | (2,505  | )       
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total short-term borrowings                         |        |         | (285     | )    |         |         | (9,101   | ) |        |         | (9,386   | )
|                              | Long-term debt and bank notes: |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |   |       
|                              |                                |                                                                     | Domestic                              |                                                     |        | 668     |          |      |         | (82,818 | )        |   |        | (82,150 | )       
|                              |                                |                                                                     | Foreign                               |                                                     |        | 37,067  |          |      |         | (7,324  | )        |   |        | 29,743  |         
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total long-term debt and bank notes                 |        |         | 37,735   |      |         |         | (90,142  | ) |        |         | (52,407  | )
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total borrowed funds                                |        |         | 37,450   |      |         |         | (99,243  | ) |        |         | (61,793  | )
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Total interest expense                              |        |         | 307,767  |      |         |         | (185,429 | ) |        |         | 122,338  |  
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  
|                              |                                |                                                                     |                                       | Net interest income                                 |        | $       | 151,147  |      |         | $       | 60,574   |   |        | $       | 211,721  |  
|                              |                                |                                                                     |                                       |                                                     |        |         |          |      |         |         |          |  



---



##### 



[Additional columns below]

[Continued from above table, first column(s) repeated]

|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |        |         |          |  
|----------------------------- | ------------------------------ | ------------------------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ------- | ------- | -------- | ---- | ------ | ------- | ------- | - | ------ | ------- | -------- | -
|Year Ended December 31,       |                                | 2000 Compared to 1999                                              
|                              |                                |                                                                    
|                              |                                |                                                                     |                                       |                                                     |         | Volume  |          | Rate |        | Total  
|Interest-Earning Assets       |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|Money market instruments:     |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                | Interest-earning time deposits in other banks:                      |                                       |                                                     |         |         |          |      |        |         |         |   |        |        
|                              |                                |                                                                     | Domestic                              |                                                     | $       | 324     |          |      | $      | 81      |         |   | $      | 405     |         
|                              |                                |                                                                     | Foreign                               |                                                     |         | (58,376 | )        |      |        | 21,464  |         |   |        | (36,912 | )       
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total interest-earning time deposits in other banks |         |         | (58,052  | )    |        |         | 21,545  |   |        |         | (36,507  | )
|                              |                                | Federal funds sold and securities purchased under resale agreements |                                       |                                                     | (14,918 | )       |          |      | 11,140 |         |         |   | (3,778 | )      
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total money market instruments                      |         |         | (72,970  | )    |        |         | 32,685  |   |        |         | (40,285  | )
|Investment securities:        |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                | Taxable                                                             |                                       |                                                     | 29,642  |         |          |      | 12,649 |         |         |   | 42,291 |        
|                              |                                | Tax-exempt                                                          |                                       |                                                     | 346     |         |          |      | 898    |         |         |   | 1,244  |        
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total investment securities                         |         |         | 29,988   |      |        |         | 13,547  |   |        |         | 43,535   |  
|Other interest-earning assets |                                |                                                                     | 17,211                                |                                                     |         |         |         |      |        |         | 17,211  |  
|Loan receivables:             |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                | Loans held for securitization:                                      |                                       |                                                     |         |         |          |      |        |         |         |   |        |        
|                              |                                |                                                                     | Domestic:                             |                                                     |         |         |          |      |        |         |         |   |        |         |         
|                              |                                |                                                                     |                                       | Credit card                                         |         |         | 484,922  |      |        |         | 16,264  |   |        |         | 501,186  |  
|                              |                                |                                                                     |                                       | Other consumer                                      |         |         | 80,821   |      |        |         | 10,832  |   |        |         | 91,653   |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total domestic loans held for securitization        |         |         | 565,743  |      |        |         | 27,096  |   |        |         | 592,839  |  
|                              |                                |                                                                     | Foreign                               |                                                     |         | 16,602  |          |      |        | (2,954  | )       |   |        | 13,648  |         
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total loans held for securitization                 |         |         | 582,345  |      |        |         | 24,142  |   |        |         | 606,487  |  
|                              |                                | Loan portfolio:                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |        |        
|                              |                                |                                                                     | Domestic:                             |                                                     |         |         |          |      |        |         |         |   |        |         |         
|                              |                                |                                                                     |                                       | Credit card                                         |         |         | (202,121 | )    |        |         | 19,663  |   |        |         | (182,458 | )
|                              |                                |                                                                     |                                       | Other consumer                                      |         |         | 24       |      |        |         | 11,688  |   |        |         | 11,712   |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total domestic loan portfolio                       |         |         | (202,097 | )    |        |         | 31,351  |   |        |         | (170,746 | )
|                              |                                |                                                                     | Foreign                               |                                                     |         | 88,788  |          |      |        | (13,936 | )       |   |        | 74,852  |         
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total loan portfolio                                |         |         | (113,309 | )    |        |         | 17,415  |   |        |         | (95,894  | )
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total loan receivables                              |         |         | 469,036  |      |        |         | 41,557  |   |        |         | 510,593  |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total interest income                               |         |         | 443,265  |      |        |         | 87,789  |   |        |         | 531,054  |  
|Interest-Bearing Liabilities  |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|Interest-bearing deposits:    |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              | Domestic:                      |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |       
|                              |                                |                                                                     | Time deposits                         |                                                     |         | 207,978 |          |      |        | 58,386  |         |   |        | 266,364 |         
|                              |                                |                                                                     | Money market deposit accounts         |                                                     |         | 16,202  |          |      |        | 52,914  |         |   |        | 69,116  |         
|                              |                                |                                                                     | Interest-bearing transaction accounts |                                                     |         | 123     |          |      |        | 344     |         |   |        | 467     |         
|                              |                                |                                                                     | Savings accounts                      |                                                     |         | (1,415  | )        |      |        | 248     |         |   |        | (1,167  | )       
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total domestic interest-bearing deposits            |         |         | 222,888  |      |        |         | 111,892 |   |        |         | 334,780  |  
|                              | Foreign:                       |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |       
|                              |                                |                                                                     | Time deposits                         |                                                     |         | 3,291   |          |      |        | 3,078   |         |   |        | 6,369   |         
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total interest-bearing deposits                     |         |         | 226,179  |      |        |         | 114,970 |   |        |         | 341,149  |  
|Borrowed funds:               |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              | Short-term borrowings:         |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |       
|                              |                                |                                                                     | Domestic                              |                                                     |         | (3,181  | )        |      |        | 1,873   |         |   |        | (1,308  | )       
|                              |                                |                                                                     | Foreign                               |                                                     |         | (2,330  | )        |      |        | 1,453   |         |   |        | (877    | )       
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total short-term borrowings                         |         |         | (5,511   | )    |        |         | 3,326   |   |        |         | (2,185   | )
|                              | Long-term debt and bank notes: |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |   |       
|                              |                                |                                                                     | Domestic                              |                                                     |         | (55,676 | )        |      |        | 42,903  |         |   |        | (12,773 | )       
|                              |                                |                                                                     | Foreign                               |                                                     |         | 37,965  |          |      |        | (935    | )       |   |        | 37,030  |         
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total long-term debt and bank notes                 |         |         | (17,711  | )    |        |         | 41,968  |   |        |         | 24,257   |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total borrowed funds                                |         |         | (23,222  | )    |        |         | 45,294  |   |        |         | 22,072   |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Total interest expense                              |         |         | 202,957  |      |        |         | 160,264 |   |        |         | 363,221  |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  
|                              |                                |                                                                     |                                       | Net interest income                                 |         | $       | 240,308  |      |        | $       | (72,475 | ) |        | $       | 167,833  |  
|                              |                                |                                                                     |                                       |                                                     |         |         |          |      |        |         |         |  

---



|(a) |  | The rate-volume variance for each category has been allocated on a
consistent basis between rate and volume variances based on the percentage of
the rate or volume variance to the sum of the two absolute variances.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

for 1999. The Corporations domestic other consumer loans
typically have higher delinquency and charge-off rates than
the Corporations domestic credit card loans. As a result, the Corporation
generally charges higher interest rates on its domestic other consumer loans
than on its domestic credit card loans.

In 2001, the Corporations domestic other consumer loans also increased as the
Corporation elected to fund certain receivables through two on-balance-sheet
financings totaling $1.0 billion, which are included in short-term borrowings
in the Corporations consolidated statement of financial condition. The growth
in the Corporations domestic other consumer loans for 2000 was offset by the
securitization of $1.6 billion of domestic other consumer loans.

The Corporation originates and sells home equity loans through MBNA Delaware.
The net gains realized by the Corporation from the sale of its home equity
loans were not material to the Corporations consolidated statement of income
for 2001, 2000, and 1999.

Foreign loan receivables increased $1.0 billion to $4.1 billion at December 31,
2001, as compared to $3.1 billion at December 31, 2000, and $2.4 billion at
December 31, 1999. The growth in



Think of Yourself as a Customer | 37




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##### 



MBNA Corporation and Subsidiaries

foreign loan receivables for 2001 and 2000 was
primarily a result of marketing programs at the Corporations two foreign bank
subsidiaries, MBNA Europe and MBNA Canada. During 2001, MBNA Europe acquired
approximately $396.2 million of credit card loan receivables. The Corporation
securitized approximately $1.5 billion of foreign credit card loan receivables
in 2001, offset by $420.9 million of previously securitized foreign loans which
amortized back into the Corporations loan portfolio or matured. The
Corporation securitized approximately $1.7 billion of foreign credit card loan
receivables in 2000, offset by $301.4 million of previously securitized foreign
loans which amortized or matured. The yield on average foreign loan receivables
was 12.41% for 2001, as compared to 12.62% and 13.45% for 2000 and 1999,
respectively. The decline in the yield on average foreign loan receivables
reflects reduced rates offered on MBNA Europes loan products to attract and
retain Customers and grow loan receivables during 2000.

Note G to the audited consolidated financial statements provides further detail
regarding the Corporations loan receivables.

DEPOSITSTotal interest expense on deposits was $1.4 billion for 2001, compared to $1.3
billion for 2000. The increase in interest expense on deposits of $184.1
million during 2001 was primarily the result of a $4.3 billion increase in
average interest-bearing deposits, offset by a 36 basis point decrease in the
rate paid on average interest-bearing deposits. The decrease in the rate paid
on average interest-bearing deposits reflects actions by the FOMC throughout
2001 which impacted overall market interest rates and decreased the
Corporations on-balance-sheet funding costs.

The Corporations money market deposit accounts are variable rate products. In
addition, the Corporations foreign time deposits, although fixed-rate in
nature, generally mature within one year. Therefore, the lower market interest
rates in 2001 decreased the rate paid on average money market deposit accounts
and average foreign time deposits during the twelve months ended December 31,
2001, as compared to 2000. However, the Corporations domestic time deposits
are primarily fixed-rate deposits with maturities that range from six months to
five years, thus lower market interest rates in 2001 did not lower the average
rate paid on the Corporations average domestic time deposits in 2001, as
compared to 2000.

Total interest expense on deposits increased to $1.3 billion for 2000, compared
to $919.4 million for 1999. The increase in interest expense on deposits during
2000 was primarily the result of a $3.6 billion increase in average
interest-bearing deposits, in addition to a 68 basis point increase in the rate
paid on average interest-bearing deposits. The increase in the rate paid on
average interest-bearing deposits reflects actions by the FOMC throughout 2000
and 1999 which impacted overall market interest rates and increased the
Corporations on-balance-sheet funding costs.

The increases in average interest-bearing deposits for 2001 and 2000 were a
result of the Corporations continued emphasis on marketing domestic
certificates of deposit and money market deposit accounts to members of certain
endorsing organizations, as well as obtaining other domestic deposits through
the use of third-party intermediaries, to fund loan and other asset growth and
to diversify funding sources.

BORROWED FUNDSBorrowed funds include both short-term borrowings and long-term debt and bank
notes.

Interest expense on short-term borrowings decreased to $24.8 million for 2001,
compared to $34.2 million and $36.3 million for 2000 and 1999, respectively.
The decrease in interest expense on short-term borrowings for 2001 was
primarily a result of a decrease of 162 basis points in the rate paid on
average short-term borrowings which reflected the decrease in market rates
throughout 2001. The decrease in interest expense on short-term borrowings for
2000 was primarily a result of a decrease of $96.0 million in average
short-term borrowings, offset by a 54 basis point increase in the rate paid on
average short-term borrowings.

Note K to the audited consolidated financial statements provides further detail
regarding the Corporations short-term borrowings.

Interest expense on long-term debt and bank notes decreased to $344.6 million
for 2001, as compared to $397.0 million for 2000 and $372.7 million for 1999.
The decrease in interest expense on long-term debt and bank notes during 2001
was primarily a result of a decrease in the rate paid on average long-term debt
and bank notes of 151 basis points, offset by an increase in average long-term
debt and bank notes of $609.8 million. Interest expense on foreign long-term
debt and bank notes increased to $102.8 million for 2001, as compared to $73.0
million for 2000, as a result of an increase in average foreign long-term debt
and bank notes of $600.3 million, as MBNA Europe and MBNA Canada issued
additional long-term debt and bank notes to provide a long-term source of
funding. Interest expense on domestic long-term debt and bank notes decreased
$82.2 million during 2001 as a result of a decrease of 180 basis points in the
rate paid on average domestic long-term debt and bank notes, as compared to
2000. The increase in interest expense on long-term debt and bank notes for
2000 was primarily a result of a $37.0 million increase in interest expense on
foreign long-term debt and bank notes, as MBNA Europe and MBNA Canada issued
additional long-term debt and bank notes. Interest expense on domestic
long-term debt and bank notes decreased $12.8 million during 2000 as a result
of a decrease of $840.3 million in average domestic long-term debt and bank
notes, offset by an increase of 85 basis points in the rate paid on average
domestic long-term debt and bank notes, as compared to 1999.

The Corporation uses interest rate swap agreements and foreign exchange swap
agreements to change a portion of fixed-rate long-term debt and bank notes to
floating-rate long-term debt and bank notes to better match the rate
sensitivity of the Corporations assets. The Corporation also uses foreign
exchange swap agreements to minimize its foreign currency exchange risk on a
portion of long-term debt and bank notes issued by MBNA Europe. The decrease in
the rate paid, including the impact of interest rate swap agreements, on the
Corporations long-term debt and bank notes reflects the decline in market
interest rates throughout 2001.

Note L to the audited consolidated financial statements provides further detail
regarding the Corporations long-term debt and bank notes.



---





---



##### 



MBNA Corporation and Subsidiaries

OTHER OPERATING INCOME
Total other operating income increased 35.1% or $1.8 billion to $6.9 billion
for 2001 from 2000. The increase in other operating income was primarily
attributable to a $1.7 billion or 38.4% increase in securitization income for
2001, which grew to $6.0 billion. The increase in securitization income for
2001 was the result of a $10.8 billion or 18.1% increase in average securitized
loans from 2000. Also, the securitized net interest margin increased to 9.79%,
as compared to 7.90% for 2000, primarily as a result of a decrease in the rate
paid to investors in the Corporations securitization transactions. The 189
basis point increase in the securitized net interest margin contributed
approximately $1.1 billion to the increase in securitization income for 2001.
The decrease in the rate paid to investors on the Corporations securitization
transactions, which generally reset on a monthly basis, reflects actions by the
FOMC throughout 2001 which impacted overall market interest rates. The increase
in the securitized net interest margin was partially offset by an increase in
the charge-off rate in the Corporations securitized loans. Securitized net
credit losses as a percentage of average securitized loans was 4.89% for 2001
and 4.69% for 2000.

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Total other operating income increased 17.9% or $778.7 million to $5.1 billion
for 2000 from 1999. The increase in other operating income was primarily
attributable to a $532.8 million or 14.0% increase in securitization income for
2000, which grew to $4.3 billion. The increase in securitization income for
2000 was the result of a $10.0 billion or 20.2% increase in average securitized
loans from 1999, offset by an increase in the rate paid to investors in the
Corporations securitized loans.
Credit card fees were $295.1 million for 2001 as compared to $289.5 million for
2000 and $199.5 million for 1999. Credit card fees include annual, late,
overlimit, returned check, cash advance, and other miscellaneous fees earned on
the Corporations credit card loans. The increase of 45.1% in credit card fees
for 2000 was a result of the growth in the Corporations loan receivables,
accounts, and the number of fees assessed. Also, loan servicing fees related to
securitized loans which are included in securitization income, credit card
fees, and other income increased for 2000 from 1999, as a result of the
Corporation increasing its fees charged to credit card and other consumer loan
Customers during the first three months of 1999.

Included in securitization income is the net incremental change in the
interest-only strip receivable which the Corporation recognizes from the
securitization of loans in accordance with Statement of Financial Accounting
Standards No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities- a Replacement of FASB Statement No. 125
(Statement No. 140). The interest-only strip receivable represents the
contractual right to receive from the trust interest and other revenue less
certain costs over the estimated life of securitized loans. The Corporation
uses certain key assumptions and estimates in determining the value of the
interest-only strip receivable. These key assumptions and estimates include
projections concerning interest income, late fees, charged-off loan recoveries,
gross credit losses, contractual servicing fees, and the coupon paid to the
investors which are used to determine the excess spread to be received by the
Corporation over the estimated life of the securitized loans. Other key
assumptions and estimates used by the Corporation include projected loan
payment rates, which are used to determine the estimated life of the
securitized loans, and an appropriate discount rate. Based
on these key assumptions and estimates and the Corporations securitization
activity, the net incremental change in the interest-only strip receivable for
all securitization transactions recognized by the Corporation in securitization
income, net of securitization transaction costs, was a $204.2 million increase
in 2001, a $22.3 million increase in 2000, and a $104.1 million increase in
1999. The Corporation reviews the key assumptions and estimates used in
determining the fair value of the interest-only strip receivable on a quarterly
basis. If these assumptions change or actual results differ from projected
results, the interest-only strip receivable and securitization income would be
affected.

The increase in the net incremental change in the interest-only strip
receivable in 2001 as compared to 2000 was primarily a result of an increase in
the projected excess spread assumption. The increase in the projected excess
spread assumption was primarily a result of anticipated lower funding costs
used in the assumption at the end of 2001 as compared to 2000. The lower
anticipated funding costs reflect actions by the FOMC throughout 2001 which
impacted overall market interest rates, as the rates paid to the investors in
the Corporations securitized loans are primarily variable in nature. The lower
anticipated funding costs were partially offset by lower projected interest
income yields on securitized loans and higher projected charge-off rates. In
addition, investor principal in securitized loans increased $3.9 billion in
2001 from 2000, further contributing to the increase in the net incremental
change in the interest-only strip receivable.

Note J to the audited consolidated financial statements provides further detail
regarding the sensitivity to changes to the key assumptions and estimates used
in determining the interest-only strip receivable.

Interchange income is a fee paid by a merchant bank to the card-issuing bank
through the interchange network as compensation for risk, grace period, and
other operating costs. Such fees are set annually by MasterCard International
Inc. and Visa U.S.A. Inc. Interchange income increased $14.8 million to $301.0
million in 2001 from 2000. Interchange income also increased $65.9 million to
$286.2 million in 2000 from 1999. The increases in interchange income were
primarily a result of the increases in cardholder sales volume. In addition,
interchange rates set by MasterCard International Inc. and Visa U.S.A. Inc.
increased in April 1999.

The Corporations insurance income primarily relates to fees received for
marketing credit related life and disability insurance and debt cancellation
contracts. The Corporation also receives fees for marketing automobile,
annuity, and life and health insurance products. The amount of insurance income
recorded is generally based on insurance policies and debt cancellation
contracts in force.



Think of Yourself as a Customer | 39






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##### 



MBNA Corporation and Subsidiaries

The Corporation recognizes insurance income over the policy
or contract period as earned. Insurance income increased $60.2 million to
$145.3 million for 2001, as compared to 2000. The increase in insurance income
was primarily a result of the introduction of debt cancellation contracts in
the first quarter of 2001.

Insurance income increased $25.5 million to $85.1 million for 2000, as compared
to 1999. During 1999, the Corporation began marketing automobile insurance to
the Corporations Customers underwritten by an independent third-party.

Other income increased to $209.6 million for 2001, as compared to $149.8
million in 2000 and $85.2 million in 1999. The increase in other income in 2001
is a result of an increase in other fee income generated from the Corporations
other consumer loan products and the Corporation earning incentive payments
from MasterCard International Inc. and Visa U.S.A. Inc. for meeting certain
market share incentive targets. Other fee income includes late fees, overlimit
fees, check transaction fees, and other miscellaneous fees on the Corporations
other consumer loans.

The increase in other income for 2000 was primarily a result of the Corporation
earning incentive payments from MasterCard International Inc. and Visa U.S.A.
Inc. for meeting certain market share incentive targets.

OTHER OPERATING EXPENSETotal other operating expense increased 22.7% to $4.5 billion for 2001,
compared to an increase of 18.5% to $3.6 billion for 2000. The growth in other
operating expense reflects the Corporations continued investment in
attracting, servicing, and retaining domestic and foreign credit card and other
consumer loan Customers. The Corporation added 9.5 million new accounts in
2001, compared to 13.7 million new accounts in 2000 and 12.5 million new
accounts in 1999. The Corporation added 439 new endorsements from organizations
during 2001, compared to 459 new endorsements in 2000 and 400 new endorsements
in 1999.

Salaries and employee benefits increased $309.9 million to $1.8 billion for
2001 and $249.9 million to $1.5 billion for 2000. The increases in salaries and
employee benefits primarily reflect the increased number of people to service
the Corporations higher number of Customers and increases in employee
compensation levels. At December 31, 2001, the Corporation had approximately
25,400 full-time equivalent employees, as compared to 22,700 full-time
equivalent employees at December 31, 2000 and 19,900 full-time equivalent
employees at December 31, 1999.

The growth in other operating expense for 2001 and 2000 also includes
amortization of intangible assets, which increased $108.6 million to $381.8
million for 2001, as compared to an increase of $102.6 million to $273.2
million for 2000. The increases in amortization of intangible assets were the
result of portfolio acquisitions including the acquisition of the consumer and
commercial revolving credit loan portfolio from First Union Corporation in
2000, the credit card business of PNC Bank, N.A., and the credit card portfolio
of SunTrust Banks in 1999.

The Corporation reviews the carrying value of its intangible assets for
impairment on a quarterly basis. The intangible assets, which consist primarily
of the value of acquired Customer accounts, are carried at the lower of net
book value or estimated fair value with the estimated fair value determined by
discounting the expected future cash flows from the use of the asset at an
appropriate discount rate. The Corporation performs this valuation quarterly
based on the size and nature of the intangible asset. For intangible assets
that are not considered material, the Corporation performs this calculation by
grouping the assets by year of acquisition. The Corporation makes certain
estimates and assumptions that affect the determination of the fair value of
the intangible assets. These estimates and assumptions include levels of
account activation, active account attrition, funding costs, credit loss
experience, servicing costs, growth in average account balances, interest and
fees assessed on loans, and other factors. Significant changes in these
estimates and assumptions could result in an impairment of the intangible asset
and a write down of the carrying value of the intangible asset.

In June 2001, Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets (Statement No. 142), was issued. The effective
date for Statement No. 142 is for fiscal years beginning after December 15,
2001. In accordance with Statement No. 142, goodwill and intangible assets
determined to have indefinite lives will no longer be amortized, but will
instead be subject to an annual impairment test. At December 31, 2001, the
Corporation did not have a material amount of goodwill or intangible assets
with indefinite lives or any other nonamortizing intangible asset. Other
separately identifiable intangible assets, which for the Corporation are
primarily the value of acquired Customer accounts, will continue to be
amortized over their estimated useful lives. The Corporation currently
amortizes the value of acquired Customer accounts over a period that is
generally limited to ten years. In accordance with Statement No. 142, the
Corporation completed an analysis of the associated benefits
of the value of its acquired Customer accounts. As a result, the Corporation
will extend the amortization period of the value of acquired Customer accounts,
generally to 15 years, to better match their estimated useful lives. The change
in estimated useful lives upon the implementation of Statement No. 142 will
decrease amortization expense related to the Corporations existing
intangible assets in future periods and will not have a material impact on the
Corporations consolidated financial statements.

Note A to the audited consolidated financial statements provides further detail
regarding the Corporations intangible assets.

The growth in other operating expense for 2000 also reflects an increase in
loan receivable fraud losses of $61.4 million to $164.0 million from 1999. The
increase in loan receivable fraud losses for 2000 was a result of the
Corporation experiencing higher counterfeit accounts, never received accounts,
and fraudulent transactions occurring through mail order and phone order.

Note R to the audited consolidated financial statements provides further detail
regarding the Corporations other operating expenses.



---





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##### 



MBNA Corporation and Subsidiaries

INCOME TAXESThe Corporation recognized applicable income taxes of $1.0 billion for 2001,
compared to $807.9 million for 2000 and $630.5 million for 1999. These amounts
represent an effective tax rate of 37.6% for 2001 and 38.1% for 2000 and 1999.
Note T to the audited consolidated financial statements reconciles reported
applicable income taxes to the amount computed by applying the federal
statutory rate to income before income taxes.

LOAN QUALITYThe Corporations loan quality at any time reflects, among other factors, the
credit quality of the Corporations credit card and other consumer loans, the
general economic conditions, the success of the Corporations collection
efforts, the composition of the Corporations loans between credit card and
other consumer loans, and the seasoning of the Corporations loans. As new
loans season, the delinquency and charge-off rates on these loans generally
rise and then stabilize. The Corporations financial results are sensitive to
changes in delinquencies and net credit losses related to the Corporations
loans. During an economic downturn delinquencies and net credit losses are more
likely to increase. These trends are considered in establishing the reserve for
possible credit losses.

DELINQUENCIESThe entire balance of an account is contractually delinquent if the minimum
payment is not received by the specified date on the Customers billing
statement. Delinquency as a percentage of the Corporations loan portfolio was
4.64% at December 31, 2001, compared with 3.89% and 3.82% at December 31, 2000
and 1999, respectively. The Corporations delinquency as a percentage of
managed loans was 5.09% at December 31, 2001, compared to 4.49% and 4.45% at
December 31, 2000 and 1999, respectively. In February 1999, the Federal
Financial Institutions Examination Council (FFIEC) revised its policy on the
classification of consumer loans. The revised policy established uniform
guidelines for the charge off of loans to delinquent, bankrupt, and deceased
borrowers, for charge off of fraudulent accounts, and for re-aging delinquent
accounts. The Corporation implemented the FFIECs guidelines in December 2000
by accelerating the charge-off of some delinquent loans. The one-time FFIEC
adjustment did not have a material impact on the Corporations consolidated
statement of income for the year ended December 31, 2000. Without the
acceleration of charge off of some delinquent accounts as a result of the
implementation of the revised FFIEC policy, loan portfolio delinquency and
managed loan delinquency would have been 4.19% and 4.94%, respectively, at
December 31, 2000.

Delinquent loans are presented in Table 4 for the Corporations loan portfolio,
excluding loans held for securitization, and the Corporations managed loans.

Loan delinquency on the domestic credit card loan portfolio was 4.58% at
December 31, 2001, as compared to 4.22% and 4.14% at December 31, 2000 and
1999, respectively. Loan delinquency on the domestic other consumer loan
portfolio was 5.96% at December 31, 2001, as compared to 4.47% and 4.67% at

Table 4: Delinquent Loans (a)

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|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |  
|--------------------------------------------- | --------------- | -------------- | -------------- | --------- | --------- | --------- |  | ---- | ---- | ---- | ---------- | --------- | --------- | --------- |  | ---- | ---- | ---- | ---------- | --------- | --------- | --------- |  | ---- | ---- | ---- | -
|December 31,                                  |                 | 2001           |                |           |           |           |  | 2000 |      |      |            |           |           | 1999      |  |      |      |     
|                                             
|Loan Portfolio                                |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|Loan portfolio outstanding                    |                 | $              | 14,703,616     |           |           |           |  |      |      | $    | 11,682,904 |           |           |           |  |      |      | $    | 7,971,093  |           |           |           |  |     
|Loan portfolio delinquent:                    |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              | 30 to 59 days   |                | $              | 260,421   |           |           |  | 1.77 | %    |      | $          | 176,128   |           |           |  | 1.51 | %    |      | $          | 105,667   |           |           |  | 1.33 | %   
|                                              | 60 to 89 days   |                |                | 145,061   |           |           |  | .99  |      |      |            | 95,859    |           |           |  | .82  |      |      |            | 60,452    |           |           |  | .76  |     
|                                              | 90 or more days |                |                | 276,277   |           |           |  | 1.88 |      |      |            | 182,955   |           |           |  | 1.56 |      |      |            | 138,531   |           |           |  | 1.73 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              |                 |                | Total          |           | $         | 681,759   |  |      |      | 4.64 | %          |           | $         | 454,942   |  |      |      | 3.89 | %          |           | $         | 304,650   |  |      |      | 3.82 | %
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|Loan portfolio delinquent by
geographic area: |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              | Domestic:       |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |      |     
|                                              |                 | Credit card    |                | $         | 294,901   |           |  |      | 4.58 | %    |            | $         | 279,347   |           |  |      | 4.22 | %    |            | $         | 211,976   |           |  |      | 4.14 | %   
|                                              |                 | Other consumer |                |           | 303,365   |           |  |      | 5.96 |      |            |           | 125,043   |           |  |      | 4.47 |      |            |           | 59,163    |           |  |      | 4.67 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              |                 |                | Total domestic |           |           | 598,266   |  |      |      | 5.19 |            |           |           | 404,390   |  |      |      | 4.30 |            |           |           | 271,139   |  |      |      | 4.25 |  
|                                              | Foreign         |                |                | 83,493    |           |           |  | 2.63 |      |      |            | 50,552    |           |           |  | 2.23 |      |      |            | 33,511    |           |           |  | 2.11 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              |                 |                | Total          |           | $         | 681,759   |  |      |      | 4.64 |            |           | $         | 454,942   |  |      |      | 3.89 |            |           | $         | 304,650   |  |      |      | 3.82 |  
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|Managed Loans                                 |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|Managed loans outstanding                     |                 | $              | 97,496,051     |           |           |           |  |      |      | $    | 88,790,721 |           |           |           |  |      |      | $    | 72,255,513 |           |           |           |  |     
|Managed loans delinquent:                     |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              | 30 to 59 days   |                | $              | 1,816,893 |           |           |  | 1.86 | %    |      | $          | 1,492,296 |           |           |  | 1.68 | %    |      | $          | 1,110,127 |           |           |  | 1.54 | %   
|                                              | 60 to 89 days   |                |                | 1,039,861 |           |           |  | 1.07 |      |      |            | 846,762   |           |           |  | .95  |      |      |            | 648,272   |           |           |  | .90  |     
|                                              | 90 or more days |                |                | 2,105,707 |           |           |  | 2.16 |      |      |            | 1,647,480 |           |           |  | 1.86 |      |      |            | 1,458,497 |           |           |  | 2.01 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              |                 |                | Total          |           | $         | 4,962,461 |  |      |      | 5.09 | %          |           | $         | 3,986,538 |  |      |      | 4.49 | %          |           | $         | 3,216,896 |  |      |      | 4.45 | %
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|Managed loans delinquent by
geographic area:  |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              | Domestic:       |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |      |     
|                                              |                 | Credit card    |                | $         | 3,779,113 |           |  |      | 5.05 | %    |            | $         | 3,187,131 |           |  |      | 4.52 | %    |            | $         | 2,657,974 |           |  |      | 4.52 | %   
|                                              |                 | Other consumer |                |           | 811,159   |           |  |      | 6.86 |      |            |           | 546,049   |           |  |      | 5.74 |      |            |           | 364,897   |           |  |      | 5.83 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     
|                                              |                 |                | Total domestic |           |           | 4,590,272 |  |      |      | 5.29 |            |           |           | 3,733,180 |  |      |      | 4.67 |            |           |           | 3,022,871 |  |      |      | 4.65 |  
|                                              | Foreign         |                |                | 372,189   |           |           |  | 3.45 |      |      |            | 253,358   |           |           |  | 2.87 |      |      |            | 194,025   |           |           |  | 2.70 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |      |     
|                                              |                 |                | Total          |           | $         | 4,962,461 |  |      |      | 5.09 |            |           | $         | 3,986,538 |  |      |      | 4.49 |            |           | $         | 3,216,896 |  |      |      | 4.45 |  
|                                              |                 |                |                |           |           |           |  |      |      |      |            |           |           |           |  |      |      |      |            |           |           |           |  |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |      |      |      |  
|--------------------------------------------- | --------------- | -------------- | -------------- | --------- | --------- | --------- |  | ---- | ---- | ---- | ---------- | ------- | --------- | --------- |  | ---- | ---- | ---- | -
|December 31,                                  |                 | 1998           |                |           |           |           |  | 1997 |      |      |            |        
|                                             
|Loan Portfolio                                |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|Loan portfolio outstanding                    |                 | $              | 11,776,099     |           |           |           |  |      |      | $    | 8,261,876  |         |           |           |  |     
|Loan portfolio delinquent:                    |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              | 30 to 59 days   |                | $              | 166,352   |           |           |  | 1.41 | %    |      | $          | 125,870 |           |           |  | 1.52 | %   
|                                              | 60 to 89 days   |                |                | 93,699    |           |           |  | .80  |      |      |            | 64,275  |           |           |  | .78  |     
|                                              | 90 or more days |                |                | 194,472   |           |           |  | 1.65 |      |      |            | 134,865 |           |           |  | 1.63 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total          |           | $         | 454,523   |  |      |      | 3.86 | %          |         | $         | 325,010   |  |      |      | 3.93 | %
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|Loan portfolio delinquent by
geographic area: |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              | Domestic:       |                |                |           |           |           |  |      |      |      |            |         |           |           |  |      |     
|                                              |                 | Credit card    |                | $         | 337,886   |           |  |      | 4.23 | %    |            | $       | 252,764   |           |  |      | 4.62 | %   
|                                              |                 | Other consumer |                |           | 86,438    |           |  |      | 3.14 |      |            |         | 60,703    |           |  |      | 2.78 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total domestic |           |           | 424,324   |  |      |      | 3.95 |            |         |           | 313,467   |  |      |      | 4.09 |  
|                                              | Foreign         |                |                | 30,199    |           |           |  | 2.89 |      |      |            | 11,543  |           |           |  | 1.93 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total          |           | $         | 454,523   |  |      |      | 3.86 |            |         | $         | 325,010   |  |      |      | 3.93 |  
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|Managed Loans                                 |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|Managed loans outstanding                     |                 | $              | 59,641,106     |           |           |           |  |      |      | $    | 49,379,860 |         |           |           |  |     
|Managed loans delinquent:                     |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              | 30 to 59 days   |                | $              | 995,902   |           |           |  | 1.67 | %    |      | $          | 884,177 |           |           |  | 1.79 | %   
|                                              | 60 to 89 days   |                |                | 555,468   |           |           |  | .93  |      |      |            | 439,597 |           |           |  | .89  |     
|                                              | 90 or more days |                |                | 1,203,947 |           |           |  | 2.02 |      |      |            | 941,910 |           |           |  | 1.91 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total          |           | $         | 2,755,317 |  |      |      | 4.62 | %          |         | $         | 2,265,684 |  |      |      | 4.59 | %
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|Managed loans delinquent by
geographic area:  |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              | Domestic:       |                |                |           |           |           |  |      |      |      |            |         |           |           |  |      |     
|                                              |                 | Credit card    |                | $         | 2,361,726 |           |  |      | 4.83 | %    |            | $       | 2,024,866 |           |  |      | 4.83 | %   
|                                              |                 | Other consumer |                |           | 253,137   |           |  |      | 4.31 |      |            |         | 173,485   |           |  |      | 3.75 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total domestic |           |           | 2,614,863 |  |      |      | 4.78 |            |         |           | 2,198,351 |  |      |      | 4.72 |  
|                                              | Foreign         |                |                | 140,454   |           |           |  | 2.86 |      |      |            | 67,333  |           |           |  | 2.41 |     
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     
|                                              |                 |                | Total          |           | $         | 2,755,317 |  |      |      | 4.62 |            |         | $         | 2,265,684 |  |      |      | 4.59 |  
|                                              |                 |                |                |           |           |           |  |      |      |      |            |         |           |           |  |     

---

|(a) |  | In December 2000, the Corporation implemented the FFIECs revised policy on
the classification of consumer loans. Without the one-time FFIEC adjustment,
loan portfolio delinquency and managed loan delinquency would have been 4.19%
and 4.94%, respectively, at December 31, 2000.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Think of Yourself as a Customer | 41






---



##### 



MBNA Corporation and Subsidiaries

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | December 31, 2000 and 1999,
respectively. Loan delinquency on the foreign loan portfolio was 2.63% at
December 31, 2001, as compared to 2.23% and 2.11% at December 31, 2000 and
1999, respectively. The overall increase in delinquency rates is a result of
the current economic conditions. In addition, the increases in delinquency in
the domestic other consumer loan and foreign loan portfolios are a result of
the seasoning of the Customer accounts. The delinquency rate on the
Corporations foreign loans is typically lower than the delinquency rate on the
Corporations domestic credit card loans. The Corporations domestic other
consumer loans typically have a higher delinquency and charge-off rate than the
Corporations domestic credit card loans. As a result, the Corporation
generally charges higher interest rates on domestic other consumer loans.
|
| |  | The Corporation may modify the terms of its credit card and other consumer loan
agreements with borrowers who have experienced financial difficulties, by
either reducing their interest rate or placing them on nonaccrual status. These
other nonperforming loans are presented in Table 5 for the Corporations loan
portfolio, excluding loans held for securitization, and managed loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

NET CREDIT LOSSES


|The Corporations net credit losses include the principal amount of losses
charged off less current period recoveries and exclude accrued interest and
fees and fraud losses. The Corporation records current period recoveries on
loans previously charged off in the reserve for possible credit losses. The
Corporation sells charged-off loans and records the proceeds received from
these sales as recoveries. Accrued interest and fees are charged to current
earnings when the loan is charged off. The Corporations policy is to charge
off open-end delinquent retail loans by the end of the month in which the
account becomes 180 days contractually past due, closed-end delinquent retail
loans by the end of the month in which they become 120 days contractually past
due, and bankrupt accounts within 60 days of receiving notification from the
bankruptcy courts. The Corporation charges off deceased accounts when the loss
is determined.                                                                                                          |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|In December 2001, the Corporation
elected to amend its securitization
agreements to transfer the legal right to recoveries from charged-off
securitized loans from the Corporation to the securitization transaction cash
flows. Previously, the Corporation recognized these recoveries in the reserve
for possible credit losses. As a result of the amendment, the Corporation now
recognizes recoveries from charged-off securitized loans in the related trusts
in accordance with their respective contractual agreements. For comparability
purposes, certain prior period amounts have been reclassified to reflect the
impact of the amendment. This reclassification did not affect the Corporations
managed loan quality ratios.
Net credit losses during 2001 were $855.0 million, compared to $599.6 million
for 2000 and $526.5 million for 1999. The increase in net credit losses during
2001 from 2000 reflects a weakening economy, an increase in the Corporations
loan receivables, an increase in the percentage of other consumer loans to
total loan |  | 

Table 5: Other Nonperforming Loans

---

|                                |                                                           |                                 |         |           |           |      |         |           |           |      |         |           |           |   |        |           |           |   |        |         |         | 
|------------------------------- | --------------------------------------------------------- | ------------------------------- | ------- | --------- | --------- | ---- | ------- | --------- | --------- | ---- | ------- | --------- | --------- | - | ------ | --------- | --------- | - | ------ | ------- | ------- | 
|December 31,                    |                                                           | 2001                            |         | 2000      |           | 1999 |         | 1998      |           | 1997
|                               
|Loan Portfolio
Nonaccrual loans |                                                           | $                               | 17,459  |           |           | $    | 22,574  |           |           | $    | 12,245  |           |           | $ | 3,182  |           |           | $ | 2,520  |        
|                                | Reduced-rate loans                                        |                                 |         | 299,541   |           |      |         | 238,747   |           |      |         | 153,082   |           |   |        | 157,737   |           |   |        | 114,218 |        
|                                |                                                           |                                 |         |           |           |      |         |           |           |      |         |           |           |   |        |           |           |   |        |        
|                                |                                                           | Total other nonperforming loans |         | $         | 317,000   |      |         | $         | 261,321   |      |         | $         | 165,327   |   |        | $         | 160,919   |   |        | $       | 116,738 | 
|                                |                                                           |                                 |         |           |           |      |         |           |           |      |         |           |           |   |        |           |           |   |        |        
|                                | Other nonperforming loans as a % of ending loan portfolio |                                 |         | 2.16      | %         |      |         | 2.24      | %         |      |         | 2.07      | %         |   |        | 1.37      | %         |   |        | 1.41    | %      
|Managed Loans
Nonaccrual loans  |                                                           | $                               | 173,825 |           |           | $    | 190,553 |           |           | $    | 116,696 |           |           | $ | 19,283 |           |           | $ | 15,908 |        
|                                | Reduced-rate loans                                        |                                 |         | 2,360,392 |           |      |         | 1,948,217 |           |      |         | 1,696,489 |           |   |        | 1,177,107 |           |   |        | 856,811 |        
|                                |                                                           |                                 |         |           |           |      |         |           |           |      |         |           |           |   |        |           |           |   |        |        
|                                |                                                           | Total other nonperforming loans |         | $         | 2,534,217 |      |         | $         | 2,138,770 |      |         | $         | 1,813,185 |   |        | $         | 1,196,390 |   |        | $       | 872,719 | 
|                                |                                                           |                                 |         |           |           |      |         |           |           |      |         |           |           |   |        |           |           |   |        |        
|                                | Other nonperforming loans as a % of ending managed loans  |                                 |         | 2.60      | %         |      |         | 2.41      | %         |      |         | 2.51      | %         |   |        | 2.01      | %         |   |        | 1.77    | %      

---



---



---



##### 



MBNA Corporation and Subsidiaries

Table 6: Reserve for Possible Credit Losses

---

|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |         |          |          |  
|-------------------------------------------------------------------- | ------------------------------------- | --------- | -------------- | ------------------------------------------ | --------- | -------- | ---------- | -------- | ------- | -------- | ---------- | -------- | ------- | -------- | ---------- | -------- | ------- | -------- | ---------- | -------- | ------- | -------- | -------- | -
|December 31,                                                         |                                       | 2001      |                | 2000                                       |           | 1999     |            | 1998     |         | 1997    
|                                                                    
|Reserve for possible credit losses, beginning of year                |                                       | $         | 527,573        |                                            |           | $        | 516,261    |          |         | $        | 296,474    |          |         | $        | 211,744    |          |         | $        | 184,720    |         
|                                                                     | Reserves acquired                     |           |                | 20,748                                     |           |          |            | 64,726   |         |          |            | 109,757  |         |          |            | 29,932   |         |          |            | 7,975    |        
|                                                                     | Provision for possible credit losses: |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |        
|                                                                     |                                       | Domestic  |                |                                            | 1,028,047 |          |            |          | 477,630 |          |            |          | 590,558 |          |            |          | 439,648 |          |            |          | 348,530 |         
|                                                                     |                                       | Foreign   |                |                                            | 112,568   |          |            |          | 69,679  |          |            |          | 46,056  |          |            |          | 23,724  |          |            |          | 963     |         
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     |                                       |           |                | Total provision for possible credit losses |           |          | 1,140,615  |          |         |          | 547,309    |          |         |          | 636,614    |          |         |          | 463,372    |          |         |          | 349,493  |  
|                                                                     | Foreign currency translation          |           |                | (499                                       | )         |          |            | (1,081   | )       |          |            | (96      | )       |          |            | (125     | )       |          |            | (203     | )      
|                                                                     | Credit losses:                        |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |        
|                                                                     |                                       | Domestic: |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |         |         
|                                                                     |                                       |           | Credit card    |                                            |           | (541,072 | )          |          |         | (435,134 | )          |          |         | (422,504 | )          |          |         | (330,952 | )          |          |         | (294,608 | )       
|                                                                     |                                       |           | Other consumer |                                            |           | (265,829 | )          |          |         | (138,892 | )          |          |         | (104,268 | )          |          |         | (86,407  | )          |          |         | (57,970  | )       
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     |                                       |           |                | Total domestic credit losses               |           |          | (806,901   | )        |         |          | (574,026   | )        |         |          | (526,772   | )        |         |          | (417,359   | )        |         |          | (352,578 | )
|                                                                     |                                       | Foreign   |                |                                            | (117,572  | )        |            |          | (72,831 | )        |            |          | (41,157 | )        |            |          | (22,754 | )        |            |          | (6,964  | )       
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     |                                       |           |                | Total credit losses                        |           |          | (924,473   | )        |         |          | (646,857   | )        |         |          | (567,929   | )        |         |          | (440,113   | )        |         |          | (359,542 | )
|                                                                     | Recoveries:                           |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |        
|                                                                     |                                       | Domestic: |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |          |         |         
|                                                                     |                                       |           | Credit card    |                                            |           | 38,174   |            |          |         | 29,367   |            |          |         | 27,356   |            |          |         | 23,244   |            |          |         | 24,708   |         
|                                                                     |                                       |           | Other consumer |                                            |           | 11,938   |            |          |         | 8,811    |            |          |         | 7,611    |            |          |         | 5,193    |            |          |         | 3,858    |         
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     |                                       |           |                | Total domestic recoveries                  |           |          | 50,112     |          |         |          | 38,178     |          |         |          | 34,967     |          |         |          | 28,437     |          |         |          | 28,566   |  
|                                                                     |                                       | Foreign   |                |                                            | 19,347    |          |            |          | 9,037   |          |            |          | 6,474   |          |            |          | 3,227   |          |            |          | 735     |         
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     |                                       |           |                | Total recoveries                           |           |          | 69,459     |          |         |          | 47,215     |          |         |          | 41,441     |          |         |          | 31,664     |          |         |          | 29,301   |  
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|                                                                     | Net credit losses                     |           |                | (855,014                                   | )         |          |            | (599,642 | )       |          |            | (526,488 | )       |          |            | (408,449 | )       |          |            | (330,241 | )      
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|Reserve for possible credit losses, end of year                      |                                       | $         | 833,423        |                                            |           | $        | 527,573    |          |         | $        | 516,261    |          |         | $        | 296,474    |          |         | $        | 211,744    |         
|                                                                     |                                       |           |                |                                            |           |          |            |          |         |          |            |          |         |          |            |          |         |          |            |         
|Net credit losses as a % of average loan receivables                 |                                       |           | 4.20           | %                                          |           |          | 3.38       | %        |         |          | 3.65       | %        |         |          | 3.42       | %        |         |          | 3.16       | %       
|Reserve for possible credit losses as a % of ending loan receivables |                                       |           | 3.38           |                                            |           |          | 2.64       |          |         |          | 2.92       |          |         |          | 2.20       |          |         |          | 1.90       |         
|Ending loan receivables                                              |                                       | $         | 24,633,564     |                                            |           | $        | 19,954,837 |          |         | $        | 17,663,709 |          |         | $        | 13,468,367 |          |         | $        | 11,162,074 |         
|Average loan receivables                                             |                                       |           | 20,339,388     |                                            |           |          | 17,718,148 |          |         |          | 14,422,495 |          |         |          | 11,930,289 |          |         |          | 10,438,513 |         

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##### 



receivables, and the continuing seasoning of the Corporations
accounts. The increase in net credit losses for 2000 was primarily the result
of the implementation of the revised FFIEC policy as the Corporation
accelerated charge off of some delinquent accounts. Without the acceleration of
charge off of some delinquent accounts as a result of the implementation of the
revised FFIEC policy, the Corporations net credit losses for 2000 would have
remained relatively unchanged from 1999.

Net credit losses as a percentage of average loan receivables were 4.20% for
the year ended December 31, 2001, compared to 3.38% for 2000 and 3.65% for
1999. The Corporations managed net credit losses as a percentage of average
managed loans for the year ended December 31, 2001 were 4.74%, compared to
4.39% for 2000 and 4.33% for 1999. Without the acceleration of charge off of
some delinquent accounts as a result of the implementation of the revised FFIEC
policy, net credit losses as a percentage of average loan receivables would
have been 3.03% and managed net credit losses as a percentage of average
managed loans would have been 3.94% for the year ended December 31, 2000.

Net charge-offs on domestic credit card loan receivables were 4.36% for 2001,
as compared to 3.45% and 4.02% for 2000 and 1999, respectively. Net charge-offs
on domestic other consumer loan receivables were 5.08% for 2001, as compared to
4.29% and 3.85% for 2000 and 1999, respectively. Net charge-offs on foreign
loan receivables were 2.59% for 2001, as compared to 2.18% and 1.66% for 2000
and 1999, respectively.

RESERVE AND PROVISION FOR POSSIBLE CREDIT LOSSESThe Corporation maintains the reserve for possible credit losses at an amount
sufficient to absorb losses inherent in the Corporations loan receivables
based on a projection of probable future net credit losses on the Corporations
loan receivables. The Corporations net credit losses include the principal
balance of loans charged off less current period recoveries and exclude accrued
interest and fees and fraud losses. The Corporation regularly performs a
migration analysis of delinquent and current accounts in order to determine an
appropriate reserve for possible credit losses. A migration analysis is a
technique used to estimate the likelihood that a loan receivable will progress
through the various delinquency stages and ultimately charge off. In completing
the analysis of the adequacy of the reserve for possible credit losses, the
impact of economic conditions on the borrowers ability to repay, past
collection experience, the risk characteristics and composition of the
portfolio, and other factors are considered. Significant changes in these
factors could impact the establishment of an appropriate reserve for possible
credit losses. A provision is charged against earnings to maintain the reserve
for possible credit losses at an appropriate level.

The Corporations reserve for possible credit losses increased $305.8 million
during 2001 to $833.4 million at December 31, 2001, as compared to $527.6
million at December 31, 2000 and $516.3 million at December 31, 1999. The
provision for possible credit losses for the year ended December 31, 2001 was
$1.1 billion, compared to $547.3 million in 2000 and $636.6 million in 1999.



Think of Yourself as a Customer | 43




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##### 



MBNA Corporation and Subsidiaries

Table 7: Allocation of Reserve for Possible Credit Losses

---



|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |        |         |         |  |     |      |       |  
|------------ | -------------- | ------------------------------------------- | ------ | ------- | ------- | ---- | --- | ---- | ----- | - | ------ | ------- | ------- |  | --- | ---- | ----- | - | ------ | ------- | ------- |  | --- | ---- | ----- | -
|December 31, |                | 2001                                        |        | 2000    |         | 1999
|            
|Domestic:    |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |        |         |         |  |     |     
|             | Credit card    |                                             | $      | 578,995 |         |      |     | 69.5 | %     |   | $      | 396,806 |         |  |     | 75.2 | %     |   | $      | 428,847 |         |  |     | 83.1 | %    
|             | Other consumer |                                             |        | 203,040 |         |      |     | 24.3 |       |   |        | 102,350 |         |  |     | 19.4 |       |   |        | 63,801  |         |  |     | 12.3 |      
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |        |         |         |  |     |     
|             |                | Domestic reserve for possible
credit losses |        |         | 782,035 |      |     |      | 93.8  |   |        |         | 499,156 |  |     |      | 94.6  |   |        |         | 492,648 |  |     |      | 95.4  |  
|Foreign      |                |                                             | 51,388 |         |         |      | 6.2 |      |       |   | 28,417 |         |         |  | 5.4 |      |       |   | 23,613 |         |         |  | 4.6 |     
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |        |         |         |  |     |     
|             |                | Reserve for possible credit losses          |        | $       | 833,423 |      |     |      | 100.0 | % |        | $       | 527,573 |  |     |      | 100.0 | % |        | $       | 516,261 |  |     |      | 100.0 | %
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |        |         |         |  |     |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|             |                |                                             |        |         |         |  |     |      |       |   |       |         |         |  |     |      |       |  
|------------ | -------------- | ------------------------------------------- | ------ | ------- | ------- |  | --- | ---- | ----- | - | ----- | ------- | ------- |  | --- | ---- | ----- | -
|December 31, |                | 1998                                        |        | 1997   
|            
|Domestic:    |                |                                             |        |         |         |  |     |      |       |   |       |         |         |  |     |     
|             | Credit card    |                                             | $      | 224,006 |         |  |     | 75.5 | %     |   | $     | 179,070 |         |  |     | 84.6 | %    
|             | Other consumer |                                             |        | 60,132  |         |  |     | 20.3 |       |   |       | 26,334  |         |  |     | 12.4 |      
|             |                |                                             |        |         |         |  |     |      |       |   |       |         |         |  |     |     
|             |                | Domestic reserve for possible
credit losses |        |         | 284,138 |  |     |      | 95.8  |   |       |         | 205,404 |  |     |      | 97.0  |  
|Foreign      |                |                                             | 12,336 |         |         |  | 4.2 |      |       |   | 6,340 |         |         |  | 3.0 |     
|             |                |                                             |        |         |         |  |     |      |       |   |       |         |         |  |     |     
|             |                | Reserve for possible credit losses          |        | $       | 296,474 |  |     |      | 100.0 | % |       | $       | 211,744 |  |     |      | 100.0 | %
|             |                |                                             |        |         |         |  |     |      |       |   |       |         |         |  |     |     

---

The increase in the reserve for possible credit losses and the related
provision for possible credit losses from 2000 primarily reflects a weakening
economy as demonstrated by the increase
in the Corporations delinquency and net credit losses. The Corporation also
anticipates an increase in the dollar amount
of future net credit losses as the Corporation has experienced
an increase in the number of bankruptcy filings, as well as an increase in the
Corporations loan receivables. As a result, the Corporation has increased its
reserve for possible credit losses.

The Corporation records acquired reserves for current period loan portfolio
acquisitions. During 2001, the Corporation recorded $20.7 million of acquired
reserves, while the Corporation recorded $64.7 million of acquired reserves in
connection with the acquisition of the consumer and commercial revolving credit
loan portfolio from First Union Corporation and other loan portfolios in 2000.
In 1999, the Corporation recorded $109.8 million of acquired reserves in
connection with the acquisition of the credit card business from PNC Bank,
N.A., the credit card loan portfolio from SunTrust Banks, and other loan
portfolios.

Table 6 presents an analysis of the Corporations reserve for possible credit
losses. The reserve for possible credit losses is a general allowance
applicable to the Corporations loan portfolio and does not include an
allocation for credit risk related to securitized loans. Net credit losses on
securitized loans are absorbed directly by the related trusts under their
respective contractual agreements and do not affect the reserve for possible
credit losses. The incremental loan receivable charge-offs from the
implementation of the revised FFIEC policy in 2000 were recorded as a reduction
to the reserve for possible credit losses. The incremental securitized loan
charge-offs from the implementation of the revised FFIEC policy in 2000 were
already included by the Corporation in determining the interest-only strip
receivable recorded in accordance with Statement No. 140.

CAPITAL ADEQUACY
The Corporation is subject to risk-based capital guidelines adopted by the
Federal Reserve Board for bank holding companies. The Bank and MBNA Delaware
are also subject to similar capital requirements adopted by the Office of the
Comptroller of the Currency. Under these requirements, the federal bank
regulatory agencies have established quantitative measures to ensure that
minimum thresholds for Tier 1 Capital, Total Capital, and Leverage ratios are
maintained. Failure to meet these minimum capital requirements can initiate
certain mandatory, and possible additional discretionary, actions by the
federal bank regulators that, if undertaken, could have a direct material
effect on the Corporations, the Banks, and MBNA Delawares consolidated
financial statements. Under the capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Corporation, the Bank, and MBNA
Delaware must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices.

The Corporations, the Banks, and MBNA Delawares capital amounts and
classification are also subject to qualitative judgments by the federal bank
regulators about components, risk weightings, and

Table 8: Regulatory Capital Ratios

---

|                              |          |      |  |       |   |  |              |       |   |              |  |         |  |      |                  |  | 
|----------------------------- | -------- | ---- |  | ----- | - |  | ------------ | ----- | - | ------------ |  | ------- |  | ---- | ---------------- |  | 
|                              |          |      |  |       |   |  |              |       |   |              |  | Minimum |  |      | Well-Capitalized |  | 
|December 31,                  |          | 2001 |  | 2000  |   |  | Requirements |       |   | Requirements |  |        
|                             
|MBNA Corporation              |          |      |  |       |   |  |              |       |   |              |  |         |  |      |                  | 
|                              | Tier 1   |      |  | 15.99 | % |  |              | 14.98 | % |              |  |         |  | 4.00 | %                |  | 
|                              | Total    |      |  | 17.97 |   |  |              | 16.61 |   |              |  |         |  | 8.00 |                  |  | 
|                              | Leverage |      |  | 18.12 |   |  |              | 17.30 |   |              |  |         |  | 4.00 |                  |  | 
|MBNA America Bank, N.A.       |          |      |  |       |   |  |              |       |   |              |  |         |  |      |                  | 
|                              | Tier 1   |      |  | 13.14 |   |  |              | 10.78 |   |              |  |         |  | 4.00 |                  |  | 
|                              | Total    |      |  | 15.13 |   |  |              | 12.44 |   |              |  |         |  | 8.00 |                  |  | 
|                              | Leverage |      |  | 15.00 |   |  |              | 12.79 |   |              |  |         |  | 4.00 |                  |  | 
|MBNA America (Delaware), N.A. |          |      |  |       |   |  |              |       |   |              |  |         |  |      |                  | 
|                              | Tier 1   |      |  | 18.24 |   |  |              | 20.88 |   |              |  |         |  | 4.00 |                  |  | 
|                              | Total    |      |  | 19.28 |   |  |              | 21.84 |   |              |  |         |  | 8.00 |                  |  | 
|                              | Leverage |      |  | 18.49 |   |  |              | 62.74 |   |              |  |         |  | 4.00 |                  |  | 

---

|(a) |  | Not applicable for bank holding companies.
|--- |  | ------------------------------------------



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---



##### 



MBNA Corporation and Subsidiaries

other factors. At December 31, 2001 and 2000, the Corporations, the Banks,
and MBNA Delawares capital
exceeded all minimum regulatory requirements to which they are subject, and the
Bank and MBNA Delaware were well-capitalized as defined under the federal
bank regulatory guidelines. The risk-based capital ratios, shown in Table 8,
have been computed in accordance with regulatory accounting practices.

In November 2001, the FFIEC published revised risk-based capital guidelines to
address the treatment of recourse obligations, retained interests and direct
credit substitutes that expose banks and bank holding companies to credit risk.
The revised guidelines treat recourse obligations and direct credit substitutes
more consistently than the agencies current risk-based capital standards, and
introduce a credit ratings-based approach to assigning risk weights within a
securitization. The revised guidelines also impose a dollar-for-dollar
capital charge on retained interests and a concentration limit on the
interest-only strip receivable, a subset of retained interests. The revised
guidelines are effective for all transactions settled on or after January 1,
2002. For transactions entered into before January 1, 2002, the Corporation may
elect early adoption for any provision of the revised guidelines that results
in reduced capital requirements, and may delay adoption until December 31, 2002
for any provision that results in increased capital requirements. The revised
guidelines when adopted will result in increased capital requirements for the
Corporation and the Bank. If the increased capital requirements had been in
effect at December 31, 2001, the Corporation would have remained adequately
capitalized and the Bank would have remained well-capitalized for regulatory
capital purposes. MBNA Delawares regulatory capital ratios would be
unaffected.

Other than the FFIECs revised risk-based capital guidelines, there are no
conditions or events that have occurred since December 31, 2001 that have
changed the Banks or MBNA Delawares regulatory capital classification.

In August 2000, the Corporation issued 50 million shares of common stock,
raising $1.6 billion of capital, net of issuance costs. The Corporation
contributed $750.0 million of the net proceeds from this offering to the Bank
to complete the acquisition of the consumer and commercial revolving credit
loan portfolio from First Union Corporation. The Corporation used the remaining
proceeds from the common stock offering for other general corporate purposes.

The Corporation utilizes different capital securities in its overall capital
structure to meet its regulatory capital needs. At December 31, 2001 and 2000,
the Corporation had $566.3 million (par value) issued and outstanding of
guaranteed preferred beneficial interests in Corporations junior subordinated
deferrable interest debentures, which mature in 2026 and 2027. The Bank had
$450.0 million (par value) of subordinated notes outstanding at December 31,
2001 and 2000. These notes mature in 2002 and 2008. The Corporation also had
4.5 million shares of 71/2% Cumulative Preferred Stock, Series A, and 4.0
million shares of Adjustable Rate Cumulative Preferred Stock, Series B, both
with a $25 stated value per share, outstanding at December 31, 2001 and 2000.

The guaranteed preferred beneficial interests in Corporations junior
subordinated deferrable interest debentures and preferred stock both qualify as
regulatory capital under the Federal Reserve Boards guidelines and enhance the
Corporations regulatory capital. The Banks subordinated notes, subject to the
timing of their maturity, qualify as regulatory capital under the Office of the
Comptroller of the Currencys guidelines and enhance the Banks and the
Corporations regulatory capital. The guaranteed preferred beneficial interests
in Corporations junior subordinated deferrable interest debentures, preferred
stock, and the subordinated notes also provide a long-term source of funds.

As of January 15, 2001, the shares of the Series A Preferred Stock are
redeemable, in whole or in part, solely at the option of the Corporation, while
as of October 15, 2001, the shares of the Series B Preferred Stock are
redeemable, in whole or in part, solely at the option of the Corporation.
Shares of the Series A and Series B Preferred Stock are not convertible into
other securities of the Corporation. Dividends on the preferred stock are
cumulative from the date of original issue and are payable quarterly.

Note Q to the audited consolidated financial statements provides further detail
regarding the Corporations capital adequacy.

DIVIDEND LIMITATIONS

The payment of dividends in the future and the amount of such dividends, if
any, will be at the discretion of the Corporations Board of Directors. The
payment of preferred and common stock dividends by the Corporation may be
limited by certain factors, including regulatory capital requirements, broad
enforcement powers of the federal bank regulatory agencies, and tangible net
worth maintenance requirements under the Corporations revolving credit
facilities. The payment of common stock dividends may also be limited by the
terms of the Corporations preferred stock. If the Corporation has not paid
scheduled dividends on the preferred stock, or declared the dividends and set
aside funds for payment, the Corporation may not declare or pay any cash
dividends on the common stock. In addition, if the Corporation defers interest
payments for consecutive periods covering 10 semiannual periods or 20
consecutive quarterly periods, depending on the series, on its guaranteed
preferred beneficial interests in Corporations junior subordinated deferrable
interest debentures, the Corporation may not be permitted to declare or pay any
cash dividends on the Corporations capital stock or interest on debt
securities that have equal or lower priority than the junior subordinated
deferrable interest debentures. During 2001, the Corporation declared dividends
on its preferred stock of $14.1 million and on its common stock of $306.7
million.

Table 9 presents the Corporations return on average total assets and
stockholders equity and other equity ratios, including the Corporations
dividend payout ratio.

Table 9: Return on Average Total Assets and Stockholders Equity

---

|                                                     |  |      |       |      |  |      |       |   |  |  |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|Year Ended December 31,                              |  | 2001 |       | 2000 |  | 1999
|                                                    
|Return on average total assets                       |  |      | 4.16  | %    |  |      | 3.94  | % |  |  | 3.62  | %
|Return on average stockholders equity               |  |      | 24.07 |      |  |      | 25.79 |   |  |  | 27.18 |  
|Average stockholders equity to average
total assets |  |      | 17.27 |      |  |      | 15.28 |   |  |  | 13.32 |  
|Dividend payout ratio                                |  |      | 18.75 |      |  |      | 20.92 |   |  |  | 23.14 |  
|                                                    



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Think of Yourself as a Customer | 45



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##### 



MBNA Corporation and Subsidiaries

On January 10, 2002, the Corporations Board of Directors declared a quarterly
dividend of $.10 per common share, payable April 1, 2002 to stockholders of
record as of March 15, 2002. Also on January 10, 2002, the Corporations Board
of Directors declared a quarterly dividend of $.46875 per share on the 71/2%
Cumulative Preferred Stock, Series A, and a quarterly dividend of $.3438 per
share on the Adjustable Rate Cumulative Preferred Stock, Series B. The
preferred stock dividends are payable April 15, 2002 to stockholders of record
as of March 29, 2002.

The Corporation is a legal entity separate and distinct from its banking and
other subsidiaries. The primary source of funds for payment of preferred and
common stock dividends by the Corporation is dividends received from the Bank.
The amount of dividends that a national bank may declare in any year is subject
to certain regulatory restrictions. Generally, dividends declared in a given
year by a national bank are limited to its net profit, as defined by regulatory
agencies, for that year, combined with its retained net income for the
preceding two years, less any required transfers to surplus or to a fund for
the retirement of any preferred stock. In addition, a national bank may not pay
any dividends in an amount greater than its undivided profit. Under current
regulatory practice, national banks may pay dividends only out of current
operating earnings. Also, a national bank may not declare dividends if such
declaration would leave the bank inadequately capitalized. Therefore, the
ability of the Bank to declare dividends will depend on its future net income
and capital requirements. At December 31, 2001, the amount of retained earnings
available for declaration and payment of dividends from the Bank to the
Corporation was $3.2 billion. Payment of dividends by the Bank to the
Corporation, however, can be further limited by federal bank regulatory
agencies.

The Banks payment of dividends to the Corporation may also be limited by a
tangible net worth requirement under the senior syndicated revolving credit
facility. This facility was not drawn upon at December 31, 2001. If this
facility had been drawn upon at December 31, 2001, the amount of retained
earnings available for declaration of dividends would have been further limited
to $1.5 billion.

LIQUIDITY AND RATE SENSITIVITY
The Corporation seeks to maintain prudent levels of liquidity, interest rate
risk, and foreign currency exchange rate risk.

LIQUIDITY MANAGEMENT
Liquidity management is the process by which the Corporation manages the use
and availability of various funding sources to meet its current and future
operating needs. These needs change as loans grow, securitizations amortize,
debt and other deposits mature, and payments on other obligations are made.
Because the characteristics of the Corporations assets and liabilities change,
liquidity management is a dynamic process, affected by the pricing and maturity
of investment securities, loans, deposits, securitizations, and other assets
and liabilities.

To facilitate liquidity management, the Corporation uses a variety of funding
sources to establish a maturity pattern that provides a prudent mixture of
short-term and long-term funds. The Corporation obtains funds through deposits
and debt issuance, and uses securitization of the Corporations loan
receivables as a major funding alternative. At December 31, 2001, the
Corporation funded approximately 74.7% of its managed loans through
securitization transactions. In addition, further liquidity is provided to the
Corporation through committed facilities.



The consumer asset-backed securitization market in the United States currently
exceeds $1 trillion, with approximately $268 billion of asset-backed securities
issued during 2001. An additional $122 billion of consumer asset-backed
securities were issued in the European markets during 2001. The Corporation is
a leading issuer in these markets, which have remained stable through adverse
conditions. Despite the size and relative stability of these markets and the
Corporations position as a leading issuer, if these markets experience
difficulties the Corporation may be unable to securitize its loan receivables
or to do so at favorable pricing levels. Factors affecting the Corporations
ability to securitize its loan receivables or to do so at favorable pricing
levels include the overall credit quality of the Corporations securitized
loans, the stability of the market for securitization transactions, and the
legal, regulatory, accounting and tax environments governing securitization
transactions. The Corporation believes these events are not likely to



---





---



##### 



MBNA Corporation and Subsidiaries

occur. If the Corporation was unable
to continue to securitize its loan receivables at current levels, the
Corporation would use its investment securities and money market instruments in
addition to alternative funding sources to fund increases in loan receivables
and meet its other liquidity needs. The resulting change in the Corporations
current liquidity sources could potentially subject the Corporation to certain
risks. These risks would include an increase in the Corporations cost of
funds, an increase in the reserve for possible credit losses and the provision
for possible credit losses as more loans would remain on the Corporations
consolidated statement of financial condition, and lower loan growth if the
Corporation were unable to find alternative and cost-effective funding sources.
In addition, if the Corporation could not continue to remove the loan
receivables from the Corporations statement of financial condition, the
Corporation would possibly need to raise additional capital to support loan and
asset growth, provide additional credit enhancement, and meet the minimum
regulatory capital requirements.

The Bank, MBNA Europe, and the Corporation arranged a $2.5 billion senior
syndicated revolving credit facility in April 2000. The facility consists of a
senior unsecured $2.5 billion revolving credit facility, committed through
March 2004, available to the Bank and MBNA Europe with sublimit availability in
an amount of $300.0 million for the Corporation. The Bank will unconditionally
and irrevocably guarantee the obligations of MBNA Europe. The facility replaced
the Banks prior $2.0 billion syndicated revolving credit facility.

Advances from the $2.5 billion senior syndicated revolving credit facility are
subject to covenants and conditions customary in a transaction of this kind.
These conditions include requirements for both the Corporation and the Bank to
maintain a minimum level of consolidated tangible net worth. These conditions
also require the Bank to not permit its managed loan receivables 90 days or
more past due plus nonaccruing receivables to exceed 6% of managed receivables,
as defined by the agreement, and to maintain its regulatory capital ratios at
or above regulatory minimum requirements. In addition, these conditions require
that the Corporation not permit its double leverage ratio (defined as the sum
of the Corporations intangible assets and investment in subsidiaries divided
by total stockholders equity) to exceed 1.25. The facility may be used for
general corporate purposes and was not drawn upon at December 31, 2001. At
December 31, 2001, the ratio of the Banks managed loan receivables 90 days or
more past due plus nonaccruing receivables to managed receivables was 2.38%,
the Corporations double leverage ratio was .96, and the level of consolidated
tangible net worth exceeded the minimum level required. The Corporations
double leverage ratio indicates that the Corporations investment in its
subsidiaries are not funded with borrowings.

Table 10: Maturities of Deposits

---

|                                        |                |        |           |            |  |       |           |           |  |   |            |            | 
|--------------------------------------- | -------------- | ------ | --------- | ---------- |  | ----- | --------- | --------- |  | - | ---------- | ---------- | 
|December 31, 2001                       |                | Direct |           | Other      |  | Total
|                                       
|Three months or less                    |                | $      | 9,454,107 |            |  | $     | 1,303,456 |           |  | $ | 10,757,563 |           
|Over three months through
twelve months |                |        | 5,056,473 |            |  |       | 1,794,737 |           |  |   | 6,851,210  |           
|Over one year through
five years        |                |        | 4,911,282 |            |  |       | 4,564,054 |           |  |   | 9,475,336  |           
|Over five years                         |                |        | 10,636    |            |  |       |          |           |  |   | 10,636     |           
|                                        |                |        |           |            |  |       |           |           |  |   |            |           
|                                        | Total deposits |        | $         | 19,432,498 |  |       | $         | 7,662,247 |  |   | $          | 27,094,745 | 
|                                        |                |        |           |            |  |       |           |           |  |   |            |           

---

Funding programs established by the Corporation include medium-term notes and
senior notes. At December 31, 2001,
the Corporation had $1.1 billion in senior medium-term notes outstanding that
mature in varying amounts from 2002 to 2004, as compared to $1.0 billion at
December 31, 2000. In addition, the Corporation had $100.0 million in senior
notes outstanding at December 31, 2001 and 2000 that mature in 2005. The
Corporation expects to pay the interest on both the senior medium-term notes
and senior notes from dividends and
other payments received from the Bank.

Funding programs established by the Corporations bank subsidiaries include
deposits, bank notes, medium-term notes, deposit notes, and committed
facilities.

Total deposits at December 31, 2001 were $27.1 billion, compared to $24.3
billion and $18.7 billion at December 31, 2000 and 1999, respectively. The
increase in deposits from 2000 was the result of a $3.3 billion increase in
direct deposits offset by $511.5 million decrease in other deposits. Direct
deposits are deposits marketed to and received from individual Customers
without the use of a third-party intermediary. Other deposits are deposits
generally obtained through the use of a third-party intermediary. The increase
in deposits from 1999 was the result of a $3.2 billion increase in direct
deposits and a $2.4 billion increase in other deposits. The increases in direct
deposits were primarily the result of the Corporations emphasis on marketing
its deposit products and offering competitive rates. Also, during 2000 the
Corporation increased its use of other deposits as a cost-effective funding
source. Table 10 provides the maturities of the Corporations deposits at
December 31, 2001. Included in the deposit maturity category of three months or
less are money market deposit accounts, noninterest-bearing deposits,
interest-bearing transaction accounts, and savings accounts totaling $7.3
billion.

In addition, Table 11 presents the maturity distribution of the Corporations
domestic time deposits in amounts of $100,000 or more for the three most recent
years. The Corporation also had $836.5 million of foreign time deposits and
$127.7 million

Table 11: Domestic Time Deposits of $100,000 or More (a)

---

|                                      |       |      |           |           |  |  |      |       |   |   |           |           |  |      |      |       |   |   |         |           |  |  |      |       |  
|------------------------------------- | ----- | ---- | --------- | --------- |  |  | ---- | ----- | - | - | --------- | --------- |  | ---- | ---- | ----- | - | - | ------- | --------- |  |  | ---- | ----- | -
|December 31,                          |       | 2001 |           |           |  |  |      | 2000  |   |   |           |           |  | 1999 |      |       |   |  
|                                     
|Three months or less                  |       | $    | 643,012   |           |  |  | 19.0 | %     |   | $ | 503,160   |           |  |      | 17.7 | %     |   | $ | 438,018 |           |  |  | 20.5 | %    
|Over three months through six months  |       |      | 745,978   |           |  |  | 22.0 |       |   |   | 580,873   |           |  |      | 20.5 |       |   |   | 429,521 |           |  |  | 20.1 |      
|Over six months through twelve months |       |      | 827,575   |           |  |  | 24.4 |       |   |   | 676,613   |           |  |      | 23.8 |       |   |   | 618,406 |           |  |  | 29.0 |      
|Over twelve months                    |       |      | 1,172,604 |           |  |  | 34.6 |       |   |   | 1,078,286 |           |  |      | 38.0 |       |   |   | 649,351 |           |  |  | 30.4 |      
|                                      |       |      |           |           |  |  |      |       |   |   |           |           |  |      |      |       |   |   |         |           |  |  |      |      
|                                      | Total |      | $         | 3,389,169 |  |  |      | 100.0 | % |   | $         | 2,838,932 |  |      |      | 100.0 | % |   | $       | 2,135,296 |  |  |      | 100.0 | %
|                                      |       |      |           |           |  |  |      |       |   |   |           |           |  |      |      |       |   |   |         |           |  |  |      |      

---



|(a) |  | This table excludes deposits obtained by a third-party intermediary in
amounts of $100,000 or more which were subsequently distributed to individuals
in denominations of less than $100,000.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Think of Yourself as a Customer | 47




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##### 



MBNA Corporation and Subsidiaries

of foreign noninterest-bearing deposits at December 31, 2001.
The majority of the foreign time deposits were in amounts in excess of $100,000
and mature within one year.

An additional source of funding for the Bank is provided by the global bank
note program. Notes may be issued under this program with maturities of one
week or more from the date of issue. During 2001, the Bank issued $600.0
million of bank notes, compared to $635.0 million in 2000. At December 31,
2001, the Bank had $2.5 billion of bank notes outstanding, as compared to $2.4
billion of bank notes outstanding at December 31, 2000. The bank notes are
included in long-term debt and bank notes on the Corporations consolidated
statement of financial condition.

The Bank has a $750.0 million warehouse facility committed through March 2002.
The Bank may take advances under the facility subject to covenants and
conditions customary in a transaction of this kind. The Bank intends to renew
the warehouse facility through March 2003. This facility may be used for
general corporate purposes and was not drawn upon at December 31, 2001.

MBNA Europe had $1.7 billion and $768.3 million of euro medium-term notes
outstanding at December 31, 2001 and 2000, respectively. These euro medium-term
notes are issued in various foreign currencies, and are unconditionally and
irrevocably guaranteed in respect to all payments by the Bank.

MBNA Canada had CAD$390.6 million (approximately $245.6 million) of short-term
deposit notes outstanding at December 31, 2001 and CAD$652.0 million
(approximately $410.0 million) of medium-term deposit notes outstanding at
December 31, 2001. MBNA Canada had CAD$190.0 million (approximately $126.9
million) of short-term deposit notes outstanding and CAD$570.1 million
(approximately $380.7 million) of medium-term deposit notes outstanding at
December 31, 2000. The deposit notes are unconditionally
and irrevocably guaranteed as to payment of principal and
interest by the Bank.

MBNA Europe has a £325.0 million (approximately $470.9 million at December 31,
2001) multi-currency syndicated revolving credit facility committed until June
2005. MBNA Europe may take advances under the facility subject to covenants and
conditions customary in a transaction of this kind, including requirements for
tangible net worth and account delinquencies. This facility is unconditionally
and irrevocably guaranteed by the Bank. The facility may be used for general
corporate purposes and was not drawn upon at December 31, 2001.

MBNA Canada has a CAD$350.0 million (approximately $220.1 million at December
31, 2001) multi-currency syndicated revolving credit facility committed through
July 2004.
This facility replaced MBNA Canadas prior CAD$300.0 million multi-currency
syndicated revolving credit facility. In addition, MBNA Canada has a CAD$50.0
million (approximately $31.4 million at December 31, 2001) credit facility
committed through March 2002. MBNA Canada intends to renew the CAD$50.0 million
credit facility. MBNA Canada may take advances under the facilities subject to
covenants and conditions customary in a transaction of this kind. These
facilities are unconditionally and irrevocably guaranteed by the Bank. These
facilities may be used for general corporate purposes and were not drawn upon
at December 31, 2001.

Table 12 provides a summary of the Corporations estimated liquidity
requirements at December 31, 2001.

During 2001 and 2000, the Corporation had net loan originations of $9.2 billion
and $9.8 billion, respectively. At December 31, 2001, the Corporation had
outstanding lines of credit of $560.9 billion committed to its Customers. Of
that total commitment, $463.4 billion was unused. While this amount represents
the total available lines of credit to Customers, the Corporation has not
experienced and does not anticipate that all of its Customers will exercise
their entire available line of credit at any given point in time. The
Corporation has the right to reduce or cancel these available lines of credit
at any time.

The Corporation also held $3.5 billion in investment securities and $3.0
billion in money market instruments at December 31, 2001, compared to $3.1
billion in investment securities and $2.2 billion in money market instruments
at December 31, 2000. The investment securities primarily consist of
high-quality, AAA-rated securities, most of which can be used as collateral
under repurchase agreements. Of the investment securities at December 31, 2001,
$1.1 billion is anticipated to mature within twelve months. The Corporations
investment securities available-for-sale portfolio, which consists primarily of
U.S. Treasury obligations or short-term and

Table 12: Summary of Estimated Liquidity Requirements

---

|                                                             |                                        |   |                                  |            |           |   |              |            |       |   |            |            |  |   |            |             | 
|------------------------------------------------------------ | -------------------------------------- | - | -------------------------------- | ---------- | --------- | - | ------------ | ---------- | ----- | - | ---------- | ---------- |  | - | ---------- | ----------- | 
|                                                             |                                        |   | Estimated Liquidity Requirements |            |           |   |             
|                                                             |                                        |   | at December 31, 2001             |            |           |   |             
|                                                            
|                                                             |                                        |   | Within 1 Year                    |            | 15 Years |   | Over 5 Years |            | Total
|                                                             |                                        |   |                                  |            |           |   |              |            |      
|Deposits                                                     |                                        | $ | 17,608,773                       |            |           | $ | 9,475,336    |            |       | $ | 10,636     |            |  | $ | 27,094,745 |            
|Short-term borrowings                                        |                                        |   | 1,774,816                        |            |           |   |             |            |       |   |           |            |  |   | 1,774,816  |            
|Long-term debt and bank notes (par value)                    |                                        |   | 1,789,241                        |            |           |   | 4,158,532    |            |       |   | 832,023    |            |  |   | 6,779,796  |            
|Securitized loans (investor principal)                       |                                        |   | 10,387,638                       |            |           |   | 46,047,217   |            |       |   | 14,692,584 |            |  |   | 71,127,439 |            
|Minimum rental payments under noncancelable operating leases |                                        |   | 28,712                           |            |           |   | 58,576       |            |       |   |           |            |  |   | 87,288     |            
|                                                             |                                        |   |                                  |            |           |   |              |            |       |   |            |            |  |   |            |            
|                                                             | Total estimated liquidity requirements |   | $                                | 31,589,180 |           |   | $            | 59,739,661 |       |   | $          | 15,535,243 |  |   | $          | 106,864,084 | 
|                                                             |                                        |   |                                  |            |           |   |              |            |       |   |            |            |  |   |            |            

---



---



---



##### 



MBNA Corporation and Subsidiaries



variable-rate securities, was $3.1
billion at December 31, 2001, compared to $2.7 billion at December 31, 2000.
These investment securities, along with the money market instruments, provide
increased liquidity and flexibility to support the Corporations funding
requirements.

Table 13 presents the estimated maturities and yields, on a fully taxable
equivalent basis, of the Corporations investment securities at December 31,
2001.

INTEREST RATE SENSITIVITY
Interest rate sensitivity refers to the change in earnings resulting from
fluctuations in interest rates, variability in the yield earned on
interest-earning assets and the rate paid on interest-bearing liabilities, and
the differences in repricing intervals between assets and liabilities. Interest
rate changes also impact the valuation of the interest-only strip receivable
and securitization income. The management of interest rate sensitivity attempts
to maximize earnings by minimizing any negative impacts of changing market
rates, asset and liability mix, and prepayment trends. Interest rate sensitive
assets/liabilities have yields/rates that can change within a designated time
period due to their maturity, a change in an underlying index rate, or the
contractual ability of the Corporation to change the yield/rate.

Interest rate risk refers to potential changes in current and future net
interest income resulting from changes in interest rates and differences in the
repricing characteristics between interest rate sensitive assets and
liabilities. The Corporation analyzes its level of interest rate risk using
several analytical techniques. In addition to on-balance-sheet activities,
interest rate risk includes the interest rate sensitivity of securitization
income from securitized loans and the impact of interest rate swap agreements
and foreign exchange swap agreements. The Corporation uses interest rate swap
agreements and foreign exchange swap agreements to change a portion of
fixed-rate funding sources to floating-rate funding sources to better match the
rate sensitivity of the Corporations assets. For this reason, the Corporation
analyzes its level of interest rate risk on a managed basis to quantify and
capture the full impact of interest rate risk on the Corporations earnings.

The Corporations interest rate risk using the static gap methodology is
presented in Table 14. This method reports the difference between interest rate
sensitive assets and liabilities at a specific point in time. Management uses
the static gap methodology to identify the Corporations directional interest
rate risk. Interest rate sensitive assets and liabilities are reported based on
estimated and contractual repricings. Fixed-rate credit card loans, which may
be repriced by the Corporation at any time by giving notice to the Customer,
are placed in the table using a seventeen-month repricing schedule. The
Corporation also offers variable-rate credit card loans. At December 31, 2001,
variable-rate loans made up 4.5% of total managed loans, compared to 8.8% of
total managed loans at December 31, 2000. These variable-rate loans are
generally indexed to the U.S. Prime Rate published in The Wall Street Journal

Table 13: Investment Securities

dollars in thousands, yields on a fully taxable equivalent basis




|                                                             |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |      | 
|------------------------------------------------------------ | -------------------------------------------- | - | ----------------------------------------- | ----- | --------- |  | ---------- | ---- | ----- | - | --------- | ----- | ----- |  | ---- | ---- |  | - | ----- | --- |  |  | ---- | ---- | 
|                                                             |                                              |   | Estimated Maturities at December 31, 2001
|                                                            
|                                                             |                                              |   | Within 1 Year                             |       | 15 Years |  | 610 Years
|                                                             |                                              |   | Book                                      |       | Yield     |  | Book       |      | Yield |   | Book      |       | Yield
|                                                             |                                              |   |                                          
|Investment Securities Available-for-Sale                     |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     
|U.S. Treasury and other U.S. government
agencies obligations |                                              | $ | 736,062                                   |       |           |  | 5.80       | %    |       | $ | 1,427,588 |       |       |  | 3.67 | %    |  | $ |      |     |  |  |     | %   
|State and political subdivisions of
the United States        |                                              |   | 105,108                                   |       |           |  | 2.73       |      |       |   |          |       |       |  |     |      |  |   |      |     |  |  |     |     
|Asset-backed and other securities                            |                                              |   | 234,082                                   |       |           |  | 3.28       |      |       |   | 594,812   |       |       |  | 2.41 |      |  |   | 8,504 |     |  |  | 2.10 |     
|                                                             |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     
|Total investment securities available-for-sale               |                                              | $ | 1,075,252                                 |       |           |  | 4.95       |      |       | $ | 2,022,400 |       |       |  | 3.30 |      |  | $ | 8,504 |     |  |  | 2.10 |     
|                                                             |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     
|Investment Securities Held-to-Maturity                       |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     
|U.S. Treasury and other U.S. government
agencies obligations |                                              | $ |                                          |       |           |  |           |      |       | $ |          |       |       |  |     |      |  | $ |      |     |  |  |     |     
|State and political subdivisions of
the United States        |                                              |   |                                          |       |           |  |           |      |       |   | 181       |       |       |  | 7.28 |      |  |   | 649   |     |  |  | 6.94 |     
|Asset-backed and other securities                            |                                              |   | 1,000                                     |       |           |  | 4.75       |      |       |   | 1,000     |       |       |  | 6.20 |      |  |   |      |     |  |  |     |     
|                                                             |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     
|                                                             | Total investment securities held-to-maturity |   | $                                         | 1,000 |           |  |            | 4.75 |       |   | $         | 1,181 |       |  |      | 6.37 |  |   | $     | 649 |  |  |      | 6.94 | 
|                                                             |                                              |   |                                           |       |           |  |            |      |       |   |           |       |       |  |      |      |  |   |       |     |  |  |      |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                             |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |      | 
|------------------------------------------------------------ | -------------------------------------------- | - | ------------- | ------- | ----- |  | ---- | ---- | ----- | - | --------- | ------- |  |  | ---- | ---- | 
|                                                             |                                              |   | Over 10 Years |         |       |  |      |      | Total
|                                                             |                                              |   | Book          |         | Yield |  | Book |      | Yield
|                                                             |                                              |   |               |         |       |  |      |      |      
|Investment Securities Available-for-Sale                     |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     
|U.S. Treasury and other U.S. government
agencies obligations |                                              | $ |              |         |       |  |     | %    |       | $ | 2,163,650 |         |  |  | 4.40 | %   
|State and political subdivisions of
the United States        |                                              |   |              |         |       |  |     |      |       |   | 105,108   |         |  |  | 2.73 |     
|Asset-backed and other securities                            |                                              |   | 728           |         |       |  | 2.10 |      |       |   | 838,126   |         |  |  | 2.65 |     
|                                                             |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     
|Total investment securities available-for-sale               |                                              | $ | 728           |         |       |  | 2.10 |      |       | $ | 3,106,884 |         |  |  | 3.87 |     
|                                                             |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     
|Investment Securities Held-to-Maturity                       |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     
|U.S. Treasury and other U.S. government
agencies obligations |                                              | $ | 370,613       |         |       |  | 5.54 |      |       | $ | 370,613   |         |  |  | 5.54 |     
|State and political subdivisions of
the United States        |                                              |   | 5,862         |         |       |  | 8.54 |      |       |   | 6,692     |         |  |  | 8.35 |     
|Asset-backed and other securities                            |                                              |   | 60,682        |         |       |  | 6.00 |      |       |   | 62,682    |         |  |  | 5.98 |     
|                                                             |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     
|                                                             | Total investment securities held-to-maturity |   | $             | 437,157 |       |  |      | 5.64 |       |   | $         | 439,987 |  |  |      | 5.64 | 
|                                                             |                                              |   |               |         |       |  |      |      |       |   |           |         |  |  |      |     

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Think of Yourself as a Customer | 49




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##### 



MBNA Corporation and Subsidiaries

Table 14: Interest Rate Sensitivity Scheduledollars in thousands|

|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |            |           |            | 
|------------------------------------------------------------------- | ------------------------------ | ------------------------------------- | -------------- | --------------------------------------------------- | --------- | ------------- | ---------- | --------- | --------- | ------------- | ---------- | ------- | ------- | ------- | ---------- | --------- | ---------- | --------- | ---------- | 
|December 31, 2001                                                   |                                | Subject to Repricing                 
|                                                                   
|                                                                    |                                |                                       |                |                                                     |           | Within 1 Year |            | 1-5 Years |           | After 5 Years |            | Total  
|                                                                    |                                |                                      
|Interest-Earning Assets                                             |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Interest-earning time deposits in other banks:                      |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Domestic                                            |           | $             | 913        |           |           | $             |           |         |         | $       |           |           |            | $         | 913        | 
|                                                                    |                                |                                       |                | Foreign                                             |           |               | 1,675,950  |           |           |               |           |         |         |         |           |           |            |           | 1,675,950  | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total interest-earning time deposits in other banks |           |               | 1,676,863  |           |           |               |           |         |         |         |           |           |            |           | 1,676,863  | 
|Federal funds sold and securities purchased under resale agreements |                                |                                       | 1,354,000      |                                                     |           |               |           |           |           |               |           |         |         |         | 1,354,000  |          
|Investment securities (a):                                          |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    | Available-for-sale             |                                       |                | 1,602,065                                           |           |               |            | 1,504,819 |           |               |            |        |         |         |            | 3,106,884 |           
|                                                                    | Held-to-maturity               |                                       |                | 1,000                                               |           |               |            | 1,181     |           |               |            | 437,806 |         |         |            | 439,987   |           
|Other interest-earning assets                                       |                                |                                       | 1,124,063      |                                                     |           |               |           |           |           |               |           |         |         |         | 1,124,063  |          
|Loans held for securitization:                                      |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Domestic                                            |           |               | 8,976,662  |           |           |               |           |         |         |         |           |           |            |           | 8,976,662  | 
|                                                                    |                                |                                       |                | Foreign                                             |           |               | 953,286    |           |           |               |           |         |         |         |           |           |            |           | 953,286    | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total loans held for securitization                 |           |               | 9,929,948  |           |           |               |           |         |         |         |           |           |            |           | 9,929,948  | 
|Loan portfolio:                                                     |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    | Domestic:                      |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |           
|                                                                    |                                |                                       | Credit card    |                                                     |           | 4,941,378     |            |           |           | 1,498,093     |            |         |         |        |            |           |            | 6,439,471 |           
|                                                                    |                                |                                       | Other consumer |                                                     |           | 3,481,974     |            |           |           | 1,303,006     |            |         |         | 309,218 |            |           |            | 5,094,198 |           
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total domestic loan portfolio                       |           |               | 8,423,352  |           |           |               | 2,801,099  |         |         |         | 309,218    |           |            |           | 11,533,669 | 
|                                                                    | Foreign                        |                                       |                |                                                     |           |               | 1,724,443  |           |           |               | 1,445,504  |         |         |         |           |           |            |           | 3,169,947  | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total loan portfolio                                |           |               | 10,147,795 |           |           |               | 4,246,603  |         |         |         | 309,218    |           |            |           | 14,703,616 | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total interest-earning assets                       |           |               | 25,835,734 |           |           |               | 5,752,603  |         |         |         | 747,024    |           |            |           | 32,335,361 | 
|Interest-Bearing Liabilities                                        |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Interest-bearing deposits:                                          |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    | Domestic:                      |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |           
|                                                                    |                                | Time deposits                         |                |                                                     | 9,470,271 |               |            |           | 9,475,086 |               |            |         | 10,636  |         |            |           | 18,955,993 |          
|                                                                    |                                | Money market deposit accounts         |                |                                                     | 6,271,850 |               |            |           |          |               |            |         |        |         |            |           | 6,271,850  |          
|                                                                    |                                | Interest-bearing transaction accounts |                |                                                     | 49,234    |               |            |           |          |               |            |         |        |         |            |           | 49,234     |          
|                                                                    |                                | Savings accounts                      |                |                                                     | 32,755    |               |            |           |          |               |            |         |        |         |            |           | 32,755     |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total domestic interest-bearing deposits            |           |               | 15,824,110 |           |           |               | 9,475,086  |         |         |         | 10,636     |           |            |           | 25,309,832 | 
|                                                                    | Foreign:                       |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |           
|                                                                    |                                | Time deposits                         |                |                                                     | 836,223   |               |            |           | 250       |               |            |         |        |         |            |           | 836,473    |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total interest-bearing deposits                     |           |               | 16,660,333 |           |           |               | 9,475,336  |         |         |         | 10,636     |           |            |           | 26,146,305 | 
|Borrowed funds:                                                     |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    | Short-term borrowings:         |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |           
|                                                                    |                                | Domestic                              |                |                                                     | 1,529,751 |               |            |           |          |               |            |         |        |         |            |           | 1,529,751  |          
|                                                                    |                                | Foreign                               |                |                                                     | 245,065   |               |            |           |          |               |            |         |        |         |            |           | 245,065    |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total short-term borrowings                         |           |               | 1,774,816  |           |           |               |           |         |         |         |           |           |            |           | 1,774,816  | 
|                                                                    | Long-term debt and bank notes: |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |           |           
|                                                                    |                                | Domestic                              |                |                                                     | 2,390,267 |               |            |           | 2,142,610 |               |            |         | 257,969 |         |            |           | 4,790,846  |          
|                                                                    |                                | Foreign                               |                |                                                     | 979,788   |               |            |           | 1,080,867 |               |            |         | 15,532  |         |            |           | 2,076,187  |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total long-term debt and bank notes                 |           |               | 3,370,055  |           |           |               | 3,223,477  |         |         |         | 273,501    |           |            |           | 6,867,033  | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total borrowed funds                                |           |               | 5,144,871  |           |           |               | 3,223,477  |         |         |         | 273,501    |           |            |           | 8,641,849  | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|                                                                    |                                |                                       |                | Total interest-bearing liabilities                  |           |               | 21,805,204 |           |           |               | 12,698,813 |         |         |         | 284,137    |           |            |           | 34,788,154 | 
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Gap before managed adjustments                                      |                                |                                       | 4,030,530      |                                                     |           |               | (6,946,210 | )         |           |               | 462,887    |         |         |         | (2,452,793 | )        
|Managed adjustments (b)                                             |                                |                                       | (13,480,909    | )                                                   |           |               | 16,465,538 |           |           |               | (721,888   | )       |         |         | 2,262,741  |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Gap after managed adjustments                                       |                                | $                                     | (9,450,379     | )                                                   |           | $             | 9,519,328  |           |           | $             | (259,001   | )       |         | $       | (190,052   | )        
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Cumulative gap after managed adjustments                            |                                | $                                     | (9,450,379     | )                                                   |           | $             | 68,949     |           |           | $             | (190,052   | )       |         |         |            |          
|                                                                    |                                |                                       |                |                                                     |           |               |            |           |           |               |            |         |         |         |            |          
|Cumulative gap after managed adjustments as a % of managed assets   |                                |                                       | (7.99          | )%                                                  |           |               | .06        | %         |           |               | (.16       | )%      |         |         |            |          



---

|(a) |  | Investment securities are presented using estimated maturities.                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Managed adjustments reflect the impact interest rates have on securitized
loans and derivative financial instruments.

and reprice quarterly. Including the managed adjustment, results of the gap
analysis show that, within one year, the Corporations liabilities reprice
faster than its assets, indicating an earnings risk from rising interest rates.

Although the static gap methodology is widely accepted for its simplicity in
identifying interest rate risk, it ignores many changes that can occur, such as
repricing strategies, market spread adjustments, and anticipated hedging
transactions. For these reasons, the Corporation analyzes its level of interest
rate risk using several other analytical techniques, including simulation
analysis. All of the analytical techniques used by the Corporation to measure
interest rate risk include the impact of its financial assets and liabilities,
derivative financial instruments, and asset securitizations.



---





---



##### 



MBNA Corporation and Subsidiaries

Key assumptions in the Corporations simulation analysis include cash flows and
maturities of interest rate sensitive instruments, changes in market
conditions, loan volumes and pricing, consumer preferences, fixed-rate credit
card repricings as part of the Corporations normal planned business strategy,
and managements capital plans. Also included in the analysis are various
actions which the Corporation would undertake to minimize
the impact of adverse movements in interest rates.

Based on the simulation analysis at December 31, 2001, the Corporation could
experience a decrease in projected 2002 net income of approximately $67
million, as compared to a decrease of approximately $46 million in projected
2001 net income based on the simulation analysis at December 31, 2000, if
interest rates at the time the simulation analysis was performed increased 100
basis points over the next 12 months evenly distributed on the first day of
each of the next four quarters. For each incremental 100 basis points
introduced into the simulation analysis, the Corporation could experience an
additional decrease of approximately $67 million in projected 2002 net income.
These assumptions are inherently uncertain and, as a result, the analysis
cannot precisely predict the impact of higher interest rates on net income.
Actual results would differ from simulated results due to timing, magnitude,
and frequency of interest rate changes, changes in market conditions, and
management strategies to offset the Corporations potential exposure, among
other factors. The Corporation has the contractual right to reprice fixed-rate
credit card loans at any time, by giving notice to the Customer. Accordingly, a
key assumption in the simulation analysis is the repricing of fixed-rate credit
card loans in response to an upward movement in interest rates, with a lag of
approximately 45 days between interest rate movements and fixed-rate credit
card loan repricings. The Corporation has repriced its fixed-rate credit card
loans on numerous occasions in the past, and expects to continue to do so in
response to changes in interest rates, market conditions, or other factors.

FOREIGN CURRENCY EXCHANGE RATE SENSITIVITY

Foreign currency exchange rate risk refers to the potential changes in current
and future earnings or capital arising from movements in foreign exchange rates
and occurs as a result of cross-currency investment and funding activities. The
Corporations foreign currency exchange rate risk is limited to the
Corporations net investment in its foreign subsidiaries which is unhedged. The
Corporation uses forward exchange contracts and foreign exchange swap
agreements to reduce its exposure to foreign currency exchange rate risk.
Management reviews the foreign currency exchange rate risk of the Corporation
on a routine basis. During this review, management considers the net impact to
stockholders equity under various foreign exchange rate scenarios. At December
31, 2001, the Corporation could experience a decrease in stockholders equity,
net of tax, of approximately $66 million as compared to a decrease of
approximately $41 million in stockholders equity, net of tax, at December 31,
2000, as a result of a 10% depreciation of the Corporations unhedged capital
exposure in foreign subsidiaries to the U.S. dollar position.


The Corporation adopted Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities (Statement No.
133), as amended by Statement of Financial Accounting Standards No. 137,
Accounting for Derivative Instruments and Hedging ActivitiesDeferral of the
Effective Date of FASB Statement No. 133 (Statement No. 137) and Statement
of Financial Accounting Standards No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activitiesan Amendment of FASB Statement No.
133 (Statement No. 138), on January 1, 2001. The standards required that all
derivative financial instruments be recorded on the Corporations consolidated
statement of financial condition at fair value and established criteria for
designation and effectiveness of hedging relationships. The Corporation
recognized a $2.5 million (pretax) loss upon implementation of Statement No.
133, as amended by Statement No. 137 and Statement No. 138, on January 1, 2001.
The adoption of Statement No. 133 by the Corporation did not affect the
Corporations hedging strategy.

CROSS-BORDER OUTSTANDINGS

At December 31, 2001, 2000, and 1999 the Corporation had cross-border
outstandings in excess of 1% of total consolidated assets in the United Kingdom
of $1.0 billion, $529.5 million, and $696.1 million, respectively. The
Corporation does not have significant local currency outstanding in the United
Kingdom that is not hedged or funded by local currency borrowings. The
cross-border outstandings in the United Kingdom are primarily short-term in
nature.


ASSET SECURITIZATION

In September 2000, Statement No. 140 was issued. Statement No. 140 replaces
Statement of Financial Accounting Standards No. 125, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities
(Statement No. 125), and revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of Statement No. 125s
provisions without reconsideration. The Corporation adopted Statement No. 140s
revised accounting standards for all transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. The
implementation of Statement No. 140 did not have a material impact on the
Corporations consolidated financial statements.


Asset securitization is the process whereby loan receivables are converted into
securities generally referred to as asset-backed securities. The securitization
of the Corporations loan receivables is accomplished primarily through the
public and private issuance of these asset-backed securities. Asset
securitization removes loan receivables from the consolidated statement of
financial condition through the sale of loan receivables, generally to a trust.
The trust then sells undivided interests to investors that entitle the
investors to specified cash flows generated from the securitized loan
receivables. As loan receivables are securitized, the Corporations
on-balance-sheet funding needs are reduced by the amount of
loans securitized.



Think of Yourself as a Customer | 51






---



##### 



MBNA Corporation and Subsidiaries

After a securitization, the Corporation continues to own and service the
accounts that generate the loan receivables. In addition, the Corporation also
sells the rights to new loan receivables, including most fees generated by the
accounts and payments received from the accounts. The trust sells undivided
interests in the trust to investors, while the Corporation retains the
remaining undivided interest. The senior classes of the asset-backed securities
receive a AAA credit rating at the time of issuance. This AAA credit rating is
generally achieved through the sale of lower-rated subordinated classes of
asset-backed securities. The Corporation receives a servicing fee for servicing
the accounts. The Corporation maintains retained interests in its
securitization transactions which are included in accounts receivable from
securitization in the consolidated statement of financial condition. The
investors and providers of credit enhancement have a lien on a portion of these
retained interests. The Corporation has no further obligation to provide
funding support to either the investors or the trusts if the securitized loans
are not paid when due.

The trusts are qualified special purpose entities as defined under Statement
No. 140. To meet the criteria to be considered a qualifying special purpose
entity, a trust must be demonstrably distinct from the Corporation and have
activities which are significantly limited and entirely specified in the legal
documents that established the trust. The Corporation cannot change the
activities that the trust can perform. These activities may only be changed by
a majority of the beneficial interest holders not including the Corporation. As
qualifying special purpose entities under Statement No. 140, the trusts assets
and liabilities are not consolidated in the statement of financial condition of
the Corporation. The trusts are administered by an independent trustee.

During the revolving period, which generally ranges from 24 months to 108
months, the trust makes no principal payments to the investors. Instead, the
trust uses principal payments received on the accounts to purchase new loan
receivables generated by these accounts, in accordance with the terms of the
transaction, so that the principal dollar amount of the investors undivided
interest remains unchanged. Once the revolving period ends, the amortization
period begins and the trust distributes principal payments

 to the investors
according to the terms of the transaction. When the trust allocates principal
payments to the investors, the Corporations on-balance-sheet loan receivables
increase by the amount of any new purchases or cash advance activity on the
accounts.

In July 2001, Financial Accounting Standards Board Technical Bulletin No. 01-1,
Effective Date for Certain Financial Institutions of Certain Provisions of
Statement No. 140 Related to the Isolation of Transferred Financial Assets
(Technical Bulletin No. 01-1), was issued. Technical Bulletin No. 01-1
applies to single-step securitization structures utilized by the Corporation
and clarifies certain isolation criteria related to the transfer of loan
receivables that are required by Statement No. 140 to account for asset
securitizations as sales. Technical Bulletin No. 01-1 delayed the effective
date of Statement No. 140 as it applies to single-step securitization
structures for transactions occurring after December 31, 2001. Technical
Bulletin No. 01-1 also provides an extended transition period until June 30,
2006, for conversion of existing single-step master trust securitization
structures to allow issuers, if necessary, additional time to obtain sufficient
approvals from the beneficial interest holders to convert to a two-step
securitization structure and continue to meet the isolation criteria required
by Statement No. 140 to achieve sales treatment. The Corporation believes that
the required changes in its securitization structures are not significant, and
that the implementation of any required changes will not have a material impact
on the Corporations consolidated financial statements. In January 2002, the
State of Delaware passed legislation that may enable the Corporation to use a
single-step securitization structure and continue to meet the isolation
criteria of Statement No. 140, thereby maintaining sales treatment with the
single-step securitization structure.

|                                         |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |      |       |  
|---------------------------------------- | -------------- | -------------------------------- | - | ---------- | ---------- |  |  | ---- | ----- | - | - | ---------- | ---------- |  |  | ---- | ----- | -
|Table 15: Securitized Loans Distribution |                |                                  |   |           
|                                        
|dollars in thousands|                    |                |                                  |   |           
|                                        
|December 31,                             |                | 2001                             |   | 2000      
|                                        
|Securitized Loans                        |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|Domestic:                                |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                                         | Credit card    |                                  | $ | 60,501,860 |            |  |  | 83.1 | %     |   | $ | 57,425,582 |            |  |  | 83.4 | %    
|                                         | Other consumer |                                  |   | 5,702,658  |            |  |  | 7.8  |       |   |   | 5,691,769  |            |  |  | 8.3  |      
|                                         |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                                         |                | Total domestic securitized loans |   |            | 66,204,518 |  |  |      | 90.9  |   |   |            | 63,117,351 |  |  |      | 91.7  |  
|Foreign:                                 |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                                         | Credit card    |                                  |   | 6,657,969  |            |  |  | 9.1  |       |   |   | 5,650,485  |            |  |  | 8.2  |      
|                                         | Other consumer |                                  |   |           |            |  |  |     |       |   |   | 68,048     |            |  |  | .1   |      
|                                         |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                                         |                | Total foreign securitized loans  |   |            | 6,657,969  |  |  |      | 9.1   |   |   |            | 5,718,533  |  |  |      | 8.3   |  
|                                         |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                                         |                | Total securitized loans          |   | $          | 72,862,487 |  |  |      | 100.0 | % |   | $          | 68,835,884 |  |  |      | 100.0 | %
|                                         |                |                                  |   |            |            |  |  |      |       |   |   |            |            |  |  |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                  |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |      |       |  
|----------------- | -------------- | -------------------------------- | - | ---------- | ---------- | ---- |  | ---- | ----- | - | - | ---------- | ---------- |  |  | ---- | ----- | - | - | ---------- | ---------- |  |  | ---- | ----- | -
|December 31,      |                | 1999                             |   | 1998       |            | 1997
|                 
|Securitized Loans |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|Domestic:         |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                  | Credit card    |                                  | $ | 45,851,922 |            |      |  | 84.0 | %     |   | $ | 39,739,387 |            |  |  | 86.1 | %     |   | $ | 34,181,350 |            |  |  | 89.4 | %    
|                  | Other consumer |                                  |   | 3,987,180  |            |      |  | 7.3  |       |   |   | 3,007,858  |            |  |  | 6.5  |       |   |   | 2,442,116  |            |  |  | 6.4  |      
|                  |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                  |                | Total domestic securitized loans |   |            | 49,839,102 |      |  |      | 91.3  |   |   |            | 42,747,245 |  |  |      | 92.6  |   |   |            | 36,623,466 |  |  |      | 95.8  |  
|Foreign:          |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                  | Credit card    |                                  |   | 4,565,996  |            |      |  | 8.4  |       |   |   | 3,052,070  |            |  |  | 6.6  |       |   |   | 1,594,320  |            |  |  | 4.2  |      
|                  | Other consumer |                                  |   | 186,706    |            |      |  | .3   |       |   |   | 373,424    |            |  |  | .8   |       |   |   |           |            |  |  |     |      
|                  |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                  |                | Total foreign securitized loans  |   |            | 4,752,702  |      |  |      | 8.7   |   |   |            | 3,425,494  |  |  |      | 7.4   |   |   |            | 1,594,320  |  |  |      | 4.2   |  
|                  |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     
|                  |                | Total securitized loans          |   | $          | 54,591,804 |      |  |      | 100.0 | % |   | $          | 46,172,739 |  |  |      | 100.0 | % |   | $          | 38,217,786 |  |  |      | 100.0 | %
|                  |                |                                  |   |            |            |      |  |      |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |     



---





---



##### 



MBNA Corporation and Subsidiaries

During 2001, the Corporation securitized credit card loan receivables totaling
$12.4 billion, including the securitization of Pound Sterling 749.7 million
(approximately $1.1 billion) by MBNA Europe and CAD$700.0 million
(approximately $449.3 million) by MBNA Canada. During 2000, the Corporation
securitized credit card loan receivables totaling $14.2 billion, including the
securitization of Pound Sterling 798.3 million (approximately $1.2 billion) by
MBNA Europe and CAD$750.0 million (approximately $503.7 million) by MBNA
Canada. The Corporation also securitized other consumer loans totaling $1.6
billion during 2000. The total amount of securitized loans was $72.9 billion or
74.7% of managed loans at December 31, 2001, compared to $68.8 billion or 77.5%
at December 31, 2000. The total amount of securitized domestic credit card
loans was 80.8% and 81.5% of managed domestic credit card loans at December 31,
2001 and 2000, respectively. Securitized domestic other consumer loans were
48.2% and 59.8% of managed domestic other consumer loans at December 31, 2001
and 2000, respectively, while securitized foreign loans were 61.8% and 64.7% of
managed foreign loans at December 31, 2001 and 2000, respectively. Table 15
shows the Corporations securitized loans distribution.

During 2001, $8.3 billion of previously securitized loans amortized back into
the Corporations loan portfolio or matured, compared to $5.6 billion in 2000.
Table 16 presents the amounts, at December 31, 2001, of investor principal in
securitized loan receivables scheduled to amortize into the Corporations loan
receivables in future years. The amortization amounts are based upon estimated
amortization periods.

Table 16: Amortization of Investor Principaldollars in thousands |

|                                                       |                                          |   |            |            |  | 
|------------------------------------------------------ | ---------------------------------------- | - | ---------- | ---------- |  | 
|                                                      
|2002                                                   |                                          | $ | 10,387,638 |           
|2003                                                   |                                          |   | 9,818,572  |           
|2004                                                   |                                          |   | 11,942,422 |           
|2005                                                   |                                          |   | 11,632,911 |           
|2006                                                   |                                          |   | 12,653,312 |           
|Thereafter                                             |                                          |   | 14,692,584 |           
|                                                       |                                          |   |            |           
|                                                       | Total amortization of investor principal |   |            | 71,127,439 | 
|Billed interest and fees included in securitized loans |                                          |   | 1,735,048  |           
|                                                       |                                          |   |            |           
|                                                       | Total securitized loans                  |   | $          | 72,862,487 | 
|                                                       |                                          |   |            |           
|                                                      

Distribution of principal to investors may begin sooner if the average
annualized yield (generally including interest income, interchange income,
charged-off loan recoveries and other fees) for three consecutive months drops
below a minimum yield (generally equal to the sum of the coupon rate payable to
investors, contractual servicing fees, and principal credit losses during the
period) or certain other events occur.

Table 17 shows summarized yields for each trust for the three-month period
ended December 31, 2001. The yield in excess of minimum yield for each of the
trusts are presented on a cash basis and include various credit card or other
fees as specified in the securitization agreements. If the yield in excess of
minimum falls below 0%, for a contractually specified period, generally a three
month average, then the securitizations will begin to amortize earlier than
their scheduled contractual amortization date.

Table 17: Yields on Securitized Transactionsdollars in thousands |

|                                                     |  |           |            |                  |  |                   |    |                |  |                                              |       |              |  |     |       |   |  |                                |       |   |  |  |       |   |  |  |       |  
|---------------------------------------------------- |  | --------- | ---------- | ---------------- |  | ----------------- | -- | -------------- |  | -------------------------------------------- | ----- | ------------ |  | --- | ----- | - |  | ------------------------------ | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                                     |  |           |            |                  |  |                   |    |                |  | For the Three Months Ended December 31, 2001
|                                                    
|                                                     |  |           |            |                  |  |                   |    |                |  |                                              |       |              |  |     |       |   |  | Yield in Excess of Minimum (a)
|                                                     |  |           |            |                  |  |                   |    |                |  |                                              |       |              |  |     |       |   |  |                               
|                                                     |  |           |            |                  |  |                   |    |                |  |                                              |       |              |  |     |       |   |  |                                |       |   |  | 
|                                                     |  | Investor  |            | Number of Series |  | AverageAnnualized |    | AverageMinimum |  | Weighted                                     |       | Series Range
|                                                     |  | Principal |            | in Trust         |  | Yield             |    | Yield          |  | Average                                      |       | High         |  | Low
|                                                     |  |          
|MBNA Master Credit Card Trust II                     |  | $         | 45,761,638 |                  |  |                   | 64 |                |  |                                              | 18.85 | %            |  |     | 10.01 | % |  |                                | 8.84  | % |  |  | 9.22  | % |  |  | 6.38  | %
|UK Receivables Trust (b)                             |  |           | 4,054,725  |                  |  |                   | 10 |                |  |                                              | 19.54 |              |  |     | 11.81 |   |  |                                | 7.73  |   |  |  | 8.57  |   |  |  | 5.95  |  
|Gloucester Credit Card Trust (c)                     |  |           | 1,383,338  |                  |  |                   | 7  |                |  |                                              | 18.86 |              |  |     | 9.41  |   |  |                                | 9.45  |   |  |  | 10.15 |   |  |  | 9.13  |  
|MBNA Master Consumer Loan Trust                      |  |           | 5,560,278  |                  |  |                   | 5  |                |  |                                              | (d    | )            |  |     | (d    | ) |  |                                | (d    | ) |  |  | (d    | ) |  |  | (d    | )
|MBNA Triple A Master Trust                           |  |           | 1,500,000  |                  |  |                   | 2  |                |  |                                              | 19.10 |              |  |     | 10.33 |   |  |                                | 8.77  |   |  |  | 8.78  |   |  |  | 8.76  |  
|First Union Direct Bank Master Credit Card Trust (e) |  |           | 1,981,108  |                  |  |                   | 3  |                |  |                                              | 23.31 |              |  |     | 12.14 |   |  |                                | 11.17 |   |  |  | 11.73 |   |  |  | 10.70 |  
|MBNA Credit Card Master Note Trust (f)               |  |           | 9,800,000  |                  |  |                   | 14 |                |  |                                              | 18.86 |              |  |     | 9.89  |   |  |                                | 8.97  |   |  |  | 8.97  |   |  |  | 8.97  |  
|UK Receivables Trust II                              |  |           | 1,086,352  |                  |  |                   | 2  |                |  |                                              | (g    | )            |  |     | (g    | ) |  |                                | (g    | ) |  |  | (g    | ) |  |  | (g    | )

---



|(a) |  | The Yield in Excess of Minimum represents the trusts average annualized
yield less its average minimum yield.                                                                                                                                                                                                                                                                                                    
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The yields presented for the UK Receivables Trust exclude series 1998-3,
as it has entered its scheduled amortization period.                                                                                                                                                                                                                                                                                     
|   
|(c) |  | The Gloucester Credit Card Trust issued series 2001-2 on November 19,
2001. As a result of its recency, the series yield is excluded from Table
17.                                                                                                                                                                                                                                                              
|   
|(d) |  | The MBNA Master Consumer Loan Trust yield in excess of minimum yield does
not impact the distribution of principal to investors. Distribution to
investors for transactions in this trust may begin earlier than the
scheduled time if the credit enhancement amount falls below a
predetermined contractual level. As a result, its yields are excluded from
Table 17.                                           
|   
|(e) |  | The First Union Direct Bank Master Credit Card Trust was assumed by the
Corporation in 2000 as part of the acquisition of the consumer and
commercial revolving credit loan portfolio from First Union Corporation.                                                                                                                                                                                               
|   
|(f) |  | MBNA Credit Card Master Note Trust issues a series of notes called the
MBNAseries. Through the MBNAseries, MBNA Credit Card Master Note Trust
issued specific classes of notes which contribute on a prorated basis to
the calculation of the average yield in excess of minimum. This average
yield in excess of minimum impacts the distribution of principal to
investors of all classes within the MBNAseries.
|   
|(g) |  | The UK Receivables Trust II issued series 2001-A on October 31, 2001 and
series 2001-B on December 18, 2001. As a result of the trusts recency,
the trusts yields are excluded from Table 17.                                                                                                                                                                                                                   



Think of Yourself as a Customer | 53






---



##### 



MBNA Corporation and Subsidiaries

MANAGEMENTS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AND INTERNAL
CONTROL

---

The accompanying consolidated financial statements were prepared by management,
which is responsible for the integrity and objectivity of the information
presented, including amounts that must necessarily be based on judgments and
estimates. The consolidated financial statements were prepared in conformity
with accounting principles generally accepted in the United States, and in
situations where acceptable alternative accounting principles exist, management
selected the method that was appropriate in the circumstances. Financial
information appearing throughout this Annual Report to Stockholders is
consistent with the consolidated financial statements.

Management depends upon MBNA Corporations systems of internal control in
meeting its responsibilities for reliable
consolidated financial statements. In managements opinion, these systems
provide reasonable assurance that assets are safeguarded and that transactions
are properly recorded and executed in accordance with managements
authorizations. Judgments are required to assess and balance the relative costs
and expected benefits of these controls. As an integral part of the systems of
internal control, the Corporation maintains a professional staff of internal
auditors who conduct operational and special audits and coordinate audit
coverage with the independent auditors.

The consolidated financial statements have been audited by the Corporations
independent auditors, Ernst & Young LLP, whose independent professional opinion
appears separately.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with the internal auditors, the independent
auditors, and management to review the work of each and evaluate whether each
is properly discharging its responsibilities. The independent auditors have
free access to the Audit Committee to discuss the results of their audit work
and their evaluations of the adequacy of internal controls and the quality of
financial reporting.

|                        |  |                  
|----------------------- |  | -----------------
|                        |  |                  
|Alfred Lerner           |  | Charles M. Cawley
|Chairman and            |  | President        
|Chief Executive Officer |  | MBNA Corporation 
|MBNA Corporation        |  |                  
|                       
|                        |  |                  
|M. Scot Kaufman         |  | Kenneth F. Boehl 
|Chief Financial Officer |  | General Auditor  
|MBNA Corporation        |  | MBNA Corporation 



---





---



##### 



MBNA Corporation and Subsidiaries

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
MBNA Corporation

We have audited the accompanying consolidated statements of financial condition
of MBNA Corporation and subsidiaries as of December 31, 2001 and 2000 and the
related consolidated statements of income, changes in stockholders equity, and
cash flows for each of the three years in the period ended December 31, 2001.
These financial statements are the responsibility of the Corporations
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of MBNA Corporation
and subsidiaries at December 31, 2001 and 2000, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2001,
in conformity with accounting principles generally accepted in the United
States.

|                                     |  | 
|------------------------------------ |  | 
|Baltimore, Maryland
January 14, 2002 |  | 



Think of Yourself as a Customer | 55






---



##### 



MBNA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Conditiondollars in thousands, except per share amounts|

|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |            |            | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- | - | --------- | ---------- | ---------- | 
|December 31,                                                                                                                                                                |                                                                                                                               | 2001                                       |           | 2000      
|                                                                                                                                                                           
|Assets                                                                                                                                                                      |                                                                                                                               |                                            |           |            |            |   |           |           
|Cash and due from banks                                                                                                                                                     |                                                                                                                               | $                                          | 962,118   |            |            | $ | 971,469   |           
|Interest-earning time deposits in other banks                                                                                                                               |                                                                                                                               |                                            | 1,676,863 |            |            |   | 1,505,331 |           
|Federal funds sold and securities purchased under resale agreements                                                                                                         |                                                                                                                               |                                            | 1,354,000 |            |            |   | 700,000   |           
|Investment securities:                                                                                                                                                      |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            | Available-for-sale (at market value, amortized cost of $3,077,711 and $2,661,962 at December 31, 2001
and 2000, respectively) |                                            |           | 3,106,884  |            |   |           | 2,666,196  |           
|                                                                                                                                                                            | Held-to-maturity (market value of $426,317 and $368,547 at December 31, 2001
and 2000, respectively)                          |                                            |           | 439,987    |            |   |           | 384,088    |           
|Loans held for securitization                                                                                                                                               |                                                                                                                               |                                            | 9,929,948 |            |            |   | 8,271,933 |           
|Loan portfolio:                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            | Credit card                                                                                                                   |                                            |           | 8,261,575  |            |   |           | 7,798,772  |           
|                                                                                                                                                                            | Other consumer                                                                                                                |                                            |           | 6,442,041  |            |   |           | 3,884,132  |           
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total loan portfolio                       |           |            | 14,703,616 |   |           |            | 11,682,904 | 
|                                                                                                                                                                            | Reserve for possible credit losses                                                                                            |                                            |           | (833,423   | )          |   |           | (527,573   | )         
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Net loan portfolio                         |           |            | 13,870,193 |   |           |            | 11,155,331 | 
|Premises and equipment, net                                                                                                                                                 |                                                                                                                               |                                            | 2,112,139 |            |            |   | 1,781,011 |           
|Accrued income receivable                                                                                                                                                   |                                                                                                                               |                                            | 369,383   |            |            |   | 305,437   |           
|Accounts receivable from securitization                                                                                                                                     |                                                                                                                               |                                            | 7,495,501 |            |            |   | 7,081,572 |           
|Intangible assets, net                                                                                                                                                      |                                                                                                                               |                                            | 2,582,163 |            |            |   | 2,749,435 |           
|Prepaid expenses and deferred charges                                                                                                                                       |                                                                                                                               |                                            | 344,692   |            |            |   | 322,201   |           
|Other assets                                                                                                                                                                |                                                                                                                               |                                            | 1,204,074 |            |            |   | 784,092   |           
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total assets                               |           | $          | 45,447,945 |   |           | $          | 38,678,096 | 
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|Liabilities                                                                                                                                                                 |                                                                                                                               |                                            |           |            |            |   |           |           
|Deposits:                                                                                                                                                                   |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            | Time deposits                                                                                                                 |                                            | $         | 19,792,466 |            |   | $         | 18,468,144 |           
|                                                                                                                                                                            | Money market deposit accounts                                                                                                 |                                            |           | 6,271,850  |            |   |           | 4,922,027  |           
|                                                                                                                                                                            | Noninterest-bearing deposits                                                                                                  |                                            |           | 948,440    |            |   |           | 892,980    |           
|                                                                                                                                                                            | Interest-bearing transaction accounts                                                                                         |                                            |           | 49,234     |            |   |           | 50,475     |           
|                                                                                                                                                                            | Savings accounts                                                                                                              |                                            |           | 32,755     |            |   |           | 9,969      |           
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total deposits                             |           |            | 27,094,745 |   |           |            | 24,343,595 | 
|Short-term borrowings                                                                                                                                                       |                                                                                                                               |                                            | 1,774,816 |            |            |   | 159,512   |           
|Long-term debt and bank notes                                                                                                                                               |                                                                                                                               |                                            | 6,867,033 |            |            |   | 5,735,635 |           
|Accrued interest payable                                                                                                                                                    |                                                                                                                               |                                            | 226,653   |            |            |   | 237,610   |           
|Accrued expenses and other liabilities                                                                                                                                      |                                                                                                                               |                                            | 1,685,980 |            |            |   | 1,574,466 |           
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total liabilities                          |           |            | 37,649,227 |   |           |            | 32,050,818 | 
|Stockholders Equity                                                                                                                                                        |                                                                                                                               |                                            |           |            |            |   |           |           
|Preferred stock ($.01 par value, 20,000,000 shares authorized, 8,573,882 shares
issued and outstanding at December 31, 2001 and 2000)                                       |                                                                                                                               |                                            | 86        |            |            |   | 86        |           
|Common stock ($.01 par value, 1,500,000,000 shares authorized, 851,781,250 shares at December 31, 2001
and 851,803,793 shares at December 31, 2000, issued and outstanding) |                                                                                                                               |                                            | 8,518     |            |            |   | 8,518     |           
|Additional paid-in capital                                                                                                                                                  |                                                                                                                               |                                            | 2,533,822 |            |            |   | 2,725,950 |           
|Retained earnings                                                                                                                                                           |                                                                                                                               |                                            | 5,304,725 |            |            |   | 3,931,248 |           
|Accumulated other comprehensive income                                                                                                                                      |                                                                                                                               |                                            | (48,433   | )          |            |   | (38,524   | )         
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total stockholders equity                 |           |            | 7,798,718  |   |           |            | 6,627,278  | 
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                            |                                                                                                                               | Total liabilities and stockholders equity |           | $          | 45,447,945 |   |           | $          | 38,678,096 | 
|                                                                                                                                                                            |                                                                                                                               |                                            |           |            |            |   |           |           



---



---





---



##### 



MBNA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Incomedollars in thousands, except per share amounts |

|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |         |           | 
|------------------------------------------------------------------- | ---------- | ----------------------------- | --------- | ------- | --------- | - |  | ---- |  | ---- | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|Year Ended December 31,                                             |            | 2001                          |           |         |           |   |  | 2000 |  | 1999
|                                                                   
|Interest Income                                                     |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Loan portfolio                                                      |            | $                             | 1,822,607 |         |           | $ |  |      |  |      | 1,308,169 |         |           | $ | 1,404,063 |        
|Loans held for securitization                                       |            |                               | 969,419   |         |           |   |  |      |  |      | 1,161,792 |         |           |   | 555,305   |        
|Investment securities:                                              |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|                                                                    | Taxable    |                               |           | 164,577 |           |   |  |      |  |      |           | 174,109 |           |   |           | 131,818 |          
|                                                                    | Tax-exempt |                               |           | 3,124   |           |   |  |      |  |      |           | 4,396   |           |   |           | 3,587   |          
|Time deposits in other banks                                        |            |                               | 71,341    |         |           |   |  |      |  |      | 83,727    |         |           |   | 120,234   |        
|Federal funds sold and securities purchased under resale agreements |            |                               | 56,651    |         |           |   |  |      |  |      | 43,486    |         |           |   | 47,264    |        
|Other interest income                                               |            |                               | 117,383   |         |           |   |  |      |  |      | 94,680    |         |           |   | 77,469    |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|                                                                    |            | Total interest income         |           |         | 3,205,102 |   |  |      |  |      |           |         | 2,870,359 |   |           |         | 2,339,740 | 
|Interest Expense                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Deposits                                                            |            |                               | 1,444,706 |         |           |   |  |      |  |      | 1,260,575 |         |           |   | 919,426   |        
|Short-term borrowings                                               |            |                               | 24,766    |         |           |   |  |      |  |      | 34,152    |         |           |   | 36,337    |        
|Long-term debt and bank notes                                       |            |                               | 344,593   |         |           |   |  |      |  |      | 397,000   |         |           |   | 372,743   |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|                                                                    |            | Total interest expense        |           |         | 1,814,065 |   |  |      |  |      |           |         | 1,691,727 |   |           |         | 1,328,506 | 
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Net Interest Income                                                 |            |                               | 1,391,037 |         |           |   |  |      |  |      | 1,178,632 |         |           |   | 1,011,234 |        
|Provision for possible credit losses                                |            |                               | 1,140,615 |         |           |   |  |      |  |      | 547,309   |         |           |   | 636,614   |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Net interest income after provision for possible credit losses      |            |                               | 250,422   |         |           |   |  |      |  |      | 631,323   |         |           |   | 374,620   |        
|Other Operating Income                                              |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Securitization income                                               |            |                               | 5,988,627 |         |           |   |  |      |  |      | 4,326,229 |         |           |   | 3,793,440 |        
|Interchange                                                         |            |                               | 300,957   |         |           |   |  |      |  |      | 286,182   |         |           |   | 220,298   |        
|Credit card fees                                                    |            |                               | 295,101   |         |           |   |  |      |  |      | 289,468   |         |           |   | 199,485   |        
|Insurance                                                           |            |                               | 145,338   |         |           |   |  |      |  |      | 85,091    |         |           |   | 59,638    |        
|Other                                                               |            |                               | 209,596   |         |           |   |  |      |  |      | 149,816   |         |           |   | 85,191    |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|                                                                    |            | Total other operating income  |           |         | 6,939,619 |   |  |      |  |      |           |         | 5,136,786 |   |           |         | 4,358,052 | 
|Other Operating Expense                                             |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Salaries and employee benefits                                      |            |                               | 1,821,293 |         |           |   |  |      |  |      | 1,511,389 |         |           |   | 1,261,491 |        
|Occupancy expense of premises                                       |            |                               | 159,075   |         |           |   |  |      |  |      | 139,566   |         |           |   | 126,881   |        
|Furniture and equipment expense                                     |            |                               | 220,802   |         |           |   |  |      |  |      | 199,833   |         |           |   | 181,091   |        
|Other                                                               |            |                               | 2,273,661 |         |           |   |  |      |  |      | 1,796,914 |         |           |   | 1,508,245 |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|                                                                    |            | Total other operating expense |           |         | 4,474,831 |   |  |      |  |      |           |         | 3,647,702 |   |           |         | 3,077,708 | 
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Income Before Income Taxes                                          |            |                               | 2,715,210 |         |           |   |  |      |  |      | 2,120,407 |         |           |   | 1,654,964 |        
|Applicable income taxes                                             |            |                               | 1,020,919 |         |           |   |  |      |  |      | 807,875   |         |           |   | 630,541   |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Net Income                                                          |            | $                             | 1,694,291 |         |           |   |  |      |  | $    | 1,312,532 |         |           | $ | 1,024,423 |        
|                                                                    |            |                               |           |         |           |   |  |      |  |      |           |         |           |   |           |        
|Earnings Per Common Share                                           |            | $                             | 1.97      |         |           |   |  |      |  | $    | 1.58      |         |           | $ | 1.26      |        
|Earnings Per Common ShareAssuming Dilution                         |            |                               | 1.92      |         |           |   |  |      |  |      | 1.53      |         |           |   | 1.21      |        



---





Think of Yourself as a Customer | 57






---



##### 



Consolidated Statements of Changes in Stockholders Equitydollars in thousands, except per share amounts|



|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |   | 
|----------------------------------------------- | -------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------------------ | - | ------ | ------- | --------- | - | ------ | -- | - | - | - | ----- | - | - | 
|                                                |                                        |                                                                                                                                                                     |       | Outstanding Shares
|                                               
|                                                |                                        |                                                                                                                                                                     |       | Preferred          |   | Common |         | Preferred |   | Common
|                                                |                                        |                                                                                                                                                                     |       | (000)              |   | (000)  |         | Stock     |   | Stock 
|                                                |                                        |                                                                                                                                                                     |       |                   
|Balance, December 31, 1998                      |                                        |                                                                                                                                                                     | 8,574 |                    |   |        | 751,796 |           |   | $      | 86 |   |   | $ | 7,518 |  
|Comprehensive income:                           |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Net income                             |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($4,316) at
December 31, 1999)                                                                      |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        | Net unrealized losses on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of ($8,244) at December 31, 1999) |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        | Minimum benefit plan liability adjustment,
net of tax (accumulated amount of $0
at December 31, 1999)                                                               |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |  
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Comprehensive income                            |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Cash dividends:                                 |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Common$.28 per share                  |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                | Preferred                              |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|Issuance of common stock, net of issuance costs |                                        |                                                                                                                                                                     |      |                    |   |        | 50,000  |           |   |        |   |   |   |   | 500   |  
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     |      |                    |   |        | 7,719   |           |   |        |   |   |   |   | 77    |  
|Stock option tax benefit                        |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     |      |                    |   |        | (7,734  | )         |   |        |   |   |   |   | (77   | )
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Balance, December 31, 1999                      |                                        |                                                                                                                                                                     | 8,574 |                    |   |        | 801,781 |           |   |        | 86 |   |   |   | 8,018 |  
|Comprehensive income:                           |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Net income                             |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($46,956) at
December 31, 2000)                                                                     |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        | Net unrealized gains on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $8,432 at December 31, 2000)    |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |  
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Comprehensive income                            |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Cash dividends:                                 |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Common$.32 per share                  |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                | Preferred                              |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|Issuance of common stock, net of issuance costs |                                        |                                                                                                                                                                     |      |                    |   |        | 50,000  |           |   |        |   |   |   |   | 500   |  
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     |      |                    |   |        | 10,621  |           |   |        |   |   |   |   | 106   |  
|Stock option tax benefit                        |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     |      |                    |   |        | (10,598 | )         |   |        |   |   |   |   | (106  | )
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Balance, December 31, 2000                      |                                        |                                                                                                                                                                     | 8,574 |                    |   |        | 851,804 |           |   |        | 86 |   |   |   | 8,518 |  
|Comprehensive income:                           |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Net income                             |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($75,940) at
December 31, 2001)                                                                     |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        | Net unrealized gains on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $27,507 at December 31, 2001)   |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |  
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Comprehensive income                            |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Cash dividends:                                 |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                                | Common$.36 per share                  |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                                | Preferred                              |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     |      |                    |   |        | 10,555  |           |   |        |   |   |   |   | 106   |  
|Stock option tax benefit                        |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     |      |                    |   |        | (10,578 | )         |   |        |   |   |   |   | (106  | )
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|Balance, December 31, 2001                      |                                        |                                                                                                                                                                     | 8,574 |                    |   |        | 851,781 |           |   | $      | 86 |   |   | $ | 8,518 |  
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |           |         |  
|----------------------------------------------- | -------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------- | - | -------- | --------- | ------------- | - | ------------- | ------- | ----------- | ------- | - | --------- | --------- | ------- | -
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         | Accumulated |         |   |           |          
|                                                |                                        |                                                                                                                                                                     |           | Additional |   |          |           |               |   | Other         |         | Total      
|                                                |                                        |                                                                                                                                                                     |           | Paid-in    |   | Retained |           | Comprehensive |   | Stockholders'
|                                                |                                        |                                                                                                                                                                     |           | Capital    |   | Earnings |           | Income        |   | Equity       
|                                                |                                        |                                                                                                                                                                     |           |           
|Balance, December 31, 1998                      |                                        | $                                                                                                                                                                   | 271,050   |            |   | $        | 2,112,374 |               |   | $             | 7       |             |         | $ | 2,391,035 |          
|Comprehensive income:                           |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Net income                             |                                                                                                                                                                     |           |           |   |          |           | 1,024,423     |   |               |         |            |         |   |           | 1,024,423 |        
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($4,316) at
December 31, 1999)                                                                      |           |            |  |          |           |               |  |               |         |             | (6,738  | ) |           |           | (6,738  | )
|                                                |                                        | Net unrealized losses on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of ($8,244) at December 31, 1999) |           |            |  |          |           |               |  |               |         |             | (10,404 | ) |           |           | (10,404 | )
|                                                |                                        | Minimum benefit plan liability adjustment,
net of tax (accumulated amount of $0
at December 31, 1999)                                                               |           |            |  |          |           |               |  |               |         |             | 4,575   |   |           |           | 4,575   |  
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           | (12,567   | )      
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Comprehensive income                            |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   | 1,011,856 |          
|Cash dividends:                                 |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Common$.28 per share                  |                                                                                                                                                                     |           |           |   |          |           | (224,520      | ) |               |         |            |         |   |           | (224,520  | )      
|                                                | Preferred                              |                                                                                                                                                                     |           |           |   |          |           | (14,313       | ) |               |         |            |         |   |           | (14,313   | )      
|Issuance of common stock, net of issuance costs |                                        |                                                                                                                                                                     | 1,173,586 |            |   |          |          |               |   |               |        |             |         |   | 1,174,086 |          
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     | 27,855    |            |   |          |          |               |   |               |        |             |         |   | 27,932    |          
|Stock option tax benefit                        |                                        |                                                                                                                                                                     | 34,622    |            |   |          |          |               |   |               |        |             |         |   | 34,622    |          
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     | 10,082    |            |   |          |          |               |   |               |        |             |         |   | 10,082    |          
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     | (211,260  | )          |   |          |          |               |   |               |        |             |         |   | (211,337  | )        
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Balance, December 31, 1999                      |                                        |                                                                                                                                                                     | 1,305,935 |            |   |          | 2,897,964 |               |   |               | (12,560 | )           |         |   | 4,199,443 |          
|Comprehensive income:                           |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Net income                             |                                                                                                                                                                     |           |           |   |          |           | 1,312,532     |   |               |         |            |         |   |           | 1,312,532 |        
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($46,956) at
December 31, 2000)                                                                     |           |            |  |          |           |               |  |               |         |             | (42,640 | ) |           |           | (42,640 | )
|                                                |                                        | Net unrealized gains on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $8,432 at December 31, 2000)    |           |            |  |          |           |               |  |               |         |             | 16,676  |   |           |           | 16,676  |  
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           | (25,964   | )      
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Comprehensive income                            |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   | 1,286,568 |          
|Cash dividends:                                 |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Common$.32 per share                  |                                                                                                                                                                     |           |           |   |          |           | (264,574      | ) |               |         |            |         |   |           | (264,574  | )      
|                                                | Preferred                              |                                                                                                                                                                     |           |           |   |          |           | (14,674       | ) |               |         |            |         |   |           | (14,674   | )      
|Issuance of common stock, net of issuance costs |                                        |                                                                                                                                                                     | 1,598,555 |            |   |          |          |               |   |               |        |             |         |   | 1,599,055 |          
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     | 62,768    |            |   |          |          |               |   |               |        |             |         |   | 62,874    |          
|Stock option tax benefit                        |                                        |                                                                                                                                                                     | 59,015    |            |   |          |          |               |   |               |        |             |         |   | 59,015    |          
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     | 23,035    |            |   |          |          |               |   |               |        |             |         |   | 23,035    |          
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     | (323,358  | )          |   |          |          |               |   |               |        |             |         |   | (323,464  | )        
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Balance, December 31, 2000                      |                                        |                                                                                                                                                                     | 2,725,950 |            |   |          | 3,931,248 |               |   |               | (38,524 | )           |         |   | 6,627,278 |          
|Comprehensive income:                           |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Net income                             |                                                                                                                                                                     |           |           |   |          |           | 1,694,291     |   |               |         |            |         |   |           | 1,694,291 |        
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of ($75,940) at
December 31, 2001)                                                                     |           |            |  |          |           |               |  |               |         |             | (28,984 | ) |           |           | (28,984 | )
|                                                |                                        | Net unrealized gains on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $27,507 at December 31, 2001)   |           |            |  |          |           |               |  |               |         |             | 19,075  |   |           |           | 19,075  |  
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           | (9,909    | )      
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Comprehensive income                            |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   | 1,684,382 |          
|Cash dividends:                                 |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Common$.36 per share                  |                                                                                                                                                                     |           |           |   |          |           | (306,672      | ) |               |         |            |         |   |           | (306,672  | )      
|                                                | Preferred                              |                                                                                                                                                                     |           |           |   |          |           | (14,142       | ) |               |         |            |         |   |           | (14,142   | )      
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     | 83,926    |            |   |          |          |               |   |               |        |             |         |   | 84,032    |          
|Stock option tax benefit                        |                                        |                                                                                                                                                                     | 68,580    |            |   |          |          |               |   |               |        |             |         |   | 68,580    |          
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     | 31,355    |            |   |          |          |               |   |               |        |             |         |   | 31,355    |          
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     | (375,989  | )          |   |          |          |               |   |               |        |             |         |   | (376,095  | )        
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Balance, December 31, 2001                      |                                        | $                                                                                                                                                                   | 2,533,822 |            |   | $        | 5,304,725 |               |   | $             | (48,433 | )           |         | $ | 7,798,718 |          
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          



---



---



---



##### 



MBNA Corporation and Subsidiaries

Consolidated Statements of Cash Flowsdollars in thousands |

|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |          |            |  
|---------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ---------- | --------- | ---------- | ---- | ---------- | ---------- | ---------- | - | ---------- | -------- | ---------- | -
|Year Ended December 31,                                                                                                                  |                                                     | 2001                                                |            | 2000      |            | 1999
|                                                                                                                                        
|Operating Activities                                                                                                                     |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Net income                                                                                                                               |                                                     | $                                                   | 1,694,291  |           |            | $    | 1,312,532  |            |            | $ | 1,024,423  |         
|Adjustments to reconcile net income to net cash
provided by (used in) operating activities:                                              |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|                                                                                                                                         | Provision for possible credit losses                |                                                     |            | 1,140,615 |            |      |            | 547,309    |            |   |            | 636,614  |           
|                                                                                                                                         | Depreciation, amortization, and accretion           |                                                     |            | 715,386   |            |      |            | 555,482    |            |   |            | 426,443  |           
|                                                                                                                                         | (Benefit) provision for deferred income taxes       |                                                     |            | (111,267  | )          |      |            | 44,807     |            |   |            | (46,604  | )         
|                                                                                                                                         | Increase in accrued income receivable               |                                                     |            | (63,946   | )          |      |            | (88,570    | )          |   |            | (23,848  | )         
|                                                                                                                                         | Increase in accounts receivable from securitization |                                                     |            | (413,929  | )          |      |            | (2,793,224 | )          |   |            | (613,229 | )         
|                                                                                                                                         | (Decrease) increase in accrued interest payable     |                                                     |            | (10,957   | )          |      |            | 54,620     |            |   |            | 29,789   |           
|                                                                                                                                         | (Increase) decrease in other operating activities   |                                                     |            | (219,229  | )          |      |            | 279,869    |            |   |            | 122,226  |           
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|                                                                                                                                         |                                                     | Net cash provided by (used in) operating activities |            |           | 2,730,964  |      |            |            | (87,175    | ) |            |          | 1,555,814  |  
|Investing Activities                                                                                                                     |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Net (increase) decrease in money market instruments                                                                                      |                                                     |                                                     | (825,532   | )         |            |      | (679,583   | )          |            |   | 2,035,467  |         
|Proceeds from maturities of investment securities available-for-sale                                                                     |                                                     |                                                     | 1,673,341  |           |            |      | 714,223    |            |            |   | 828,800    |         
|Proceeds from sale of investment securities available-for-sale                                                                           |                                                     |                                                     | 505        |           |            |      |           |            |            |   |           |         
|Purchases of investment securities available-for-sale                                                                                    |                                                     |                                                     | (2,119,000 | )         |            |      | (634,154   | )          |            |   | (1,945,110 | )       
|Proceeds from maturities of investment securities held-to-maturity                                                                       |                                                     |                                                     | 33,280     |           |            |      | 13,210     |            |            |   | 44,718     |         
|Purchases of investment securities held-to-maturity                                                                                      |                                                     |                                                     | (89,124    | )         |            |      | (103,981   | )          |            |   | (100,186   | )       
|Proceeds from securitization of loans                                                                                                    |                                                     |                                                     | 12,322,808 |           |            |      | 15,765,871 |            |            |   | 13,287,994 |         
|Acquisition of the credit card business of PNC Bank, N.A                                                                                 |                                                     |                                                     |           |           |            |      |           |            |            |   | (3,191,786 | )       
|Loan portfolio acquisitions                                                                                                              |                                                     |                                                     | (1,307,363 | )         |            |      | (4,991,780 | )          |            |   | (2,726,633 | )       
|Proceeds from sale of loans                                                                                                              |                                                     |                                                     | 704,874    |           |            |      | 292,455    |            |            |   | 764,263    |         
|Amortization of securitized loans                                                                                                        |                                                     |                                                     | (8,282,788 | )         |            |      | (5,621,914 | )          |            |   | (5,084,811 | )       
|Net loan originations                                                                                                                    |                                                     |                                                     | (9,204,419 | )         |            |      | (9,768,733 | )          |            |   | (8,763,610 | )       
|Net purchases of premises and equipment                                                                                                  |                                                     |                                                     | (552,113   | )         |            |      | (325,019   | )          |            |   | (235,124   | )       
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|                                                                                                                                         |                                                     | Net cash used in investing activities               |            |           | (7,645,531 | )    |            |            | (5,339,405 | ) |            |          | (5,086,018 | )
|Financing Activities                                                                                                                     |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Net increase in money market deposit accounts, noninterest-bearing
deposits, interest-bearing transaction accounts, and savings accounts |                                                     |                                                     | 1,426,828  |           |            |      | 861,206    |            |            |   | 352,267    |         
|Net increase in time deposits                                                                                                            |                                                     |                                                     | 1,324,322  |           |            |      | 4,767,636  |            |            |   | 2,955,446  |         
|Net increase (decrease) in short-term borrowings                                                                                         |                                                     |                                                     | 1,615,304  |           |            |      | (879,492   | )          |            |   | (192,191   | )       
|Proceeds from issuance of long-term debt and bank notes                                                                                  |                                                     |                                                     | 2,043,964  |           |            |      | 1,187,014  |            |            |   | 891,495    |         
|Maturity of long-term debt and bank notes                                                                                                |                                                     |                                                     | (900,757   | )         |            |      | (1,097,916 | )          |            |   | (1,134,257 | )       
|Proceeds from exercise of stock options and other awards                                                                                 |                                                     |                                                     | 84,032     |           |            |      | 62,874     |            |            |   | 27,932     |         
|Acquisition and retirement of common stock                                                                                               |                                                     |                                                     | (376,095   | )         |            |      | (323,464   | )          |            |   | (211,337   | )       
|Proceeds from issuance of common stock                                                                                                   |                                                     |                                                     |           |           |            |      | 1,599,055  |            |            |   | 1,174,086  |         
|Dividends paid                                                                                                                           |                                                     |                                                     | (312,382   | )         |            |      | (267,250   | )          |            |   | (227,733   | )       
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|                                                                                                                                         |                                                     | Net cash provided by financing activities           |            |           | 4,905,216  |      |            |            | 5,909,663  |   |            |          | 3,635,708  |  
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|(Decrease) Increase in Cash and Cash Equivalents                                                                                         |                                                     |                                                     | (9,351     | )         |            |      | 483,083    |            |            |   | 105,504    |         
|Cash and cash equivalents at beginning of year                                                                                           |                                                     |                                                     | 971,469    |           |            |      | 488,386    |            |            |   | 382,882    |         
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Cash and cash equivalents at end of year                                                                                                 |                                                     | $                                                   | 962,118    |           |            | $    | 971,469    |            |            | $ | 488,386    |         
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Supplemental Disclosures                                                                                                                 |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Interest expense paid                                                                                                                    |                                                     | $                                                   | 1,869,919  |           |            | $    | 1,636,238  |            |            | $ | 1,295,597  |         
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         
|Income taxes paid                                                                                                                        |                                                     | $                                                   | 892,519    |           |            | $    | 721,368    |            |            | $ | 610,806    |         
|                                                                                                                                         |                                                     |                                                     |            |           |            |      |            |            |            |   |            |         



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MBNA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A: SIGNIFICANT ACCOUNTING
POLICIES

The following is a summary of significant accounting policies followed in the
preparation of the consolidated financial statements.


BUSINESS
MBNA Corporation (the Corporation) is a registered bank holding company,
incorporated under the laws of Maryland. It is the parent company of MBNA
America Bank, N.A. (the Bank), a national bank and the Corporations
principal subsidiary. The Bank has two wholly owned foreign bank subsidiaries,
MBNA Europe Bank Limited (MBNA Europe) located in the United Kingdom and MBNA
Canada Bank (MBNA Canada) located in Canada. Through the Bank, the
Corporation is the largest independent credit card lender in the world and is
the leading issuer of endorsed credit cards, marketed primarily to members of
associations and customers of financial institutions. In addition to its credit
card lending, the Corporation also makes other consumer loans and offers
insurance and deposit products. The Corporation is also the parent of MBNA
America (Delaware), N.A. (MBNA Delaware), which offers home equity loans and
business card products.

BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States
that require the Corporations management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include, after intercompany
elimination, the accounts of all subsidiaries of the Corporation, of which all
are wholly owned. For purposes of comparability, certain prior period amounts
have been reclassified.

FOREIGN ACTIVITIES
The Corporations foreign activities are primarily performed through the Banks
two foreign bank subsidiaries, MBNA Europe and MBNA Canada.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
The financial statements of the Corporations foreign subsidiaries have been
translated into U.S. dollars in accordance with generally accepted accounting
principles. Assets and liabilities have been translated using the exchange rate
at year end. Income and expense amounts have been translated using the exchange
rate for the period in which the transaction took place. The translation gains
and losses resulting from the change in exchange rates have been reported as a
component of other comprehensive income included in stockholders equity, net
of tax. The effect on the consolidated statements of income from foreign
currency transaction gains and losses is immaterial for all years presented.

STOCK-BASED EMPLOYEE COMPENSATION
The Corporation measures compensation cost for employee stock options and
similar instruments using the intrinsic-value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB Opinion No. 25).

ASSET SECURITIZATION
Asset securitization involves the sale, generally to a trust, of a pool of loan
receivables and is accomplished primarily through the public and private
issuance of asset-backed securities. The Corporation removes loan receivables
from the consolidated statement of financial condition for those asset
securitizations that qualify as sales in accordance with Statement of Financial
Accounting Standards No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilitiesa Replacement of FASB
Statement No. 125 (Statement No. 140). The trusts are qualifying special
purpose entities as defined by Statement No. 140. The trusts are not
subsidiaries of the Corporation, and are not included in the Corporations
consolidated financial statements in accordance with generally accepted
accounting principles. Earnings on the Corporations securitizations are
included in securitization income and other interest income in the consolidated
statement of income and amounts due from the trusts are included in accounts
receivable from securitization on the consolidated statement of financial
condition.

INVESTMENT SECURITIES
Investment securities include both those available-for-sale and those
held-to-maturity. Investment securities available-for-sale are recorded at
market value with unrealized gains and losses, net of tax, reported as a
component of other comprehensive income included in stockholders equity.
Investment securities held-to-maturity are reported at cost (adjusted for
amortization of premiums and accretion of discounts). The Corporation does not
hold investment securities for trading purposes. Realized gains and losses and
other-than-temporary impairments related to investment securities are
determined using the specific identification method and are reported in
other operating income as gains or losses on investment securities.

LOANS HELD FOR SECURITIZATION
Loans held for securitization includes the lesser of loans eligible for
securitization or sale, or loans which management intends to securitize or sell
within one year. Loans held for securitization also includes loans which were
originated through certain endorsing organizations or financial institutions
who have the contractual right to purchase the loans from the Corporation at
fair value. These loans are carried at the lower of aggregate cost or fair
value.

PREMISES AND EQUIPMENT
Premises and equipment are stated at cost less accumulated depreciation and
amortization, computed principally by the straight-line method over the
estimated useful lives of the assets. Maintenance and repairs are included in
other operating expense, while the cost of improvements is capitalized.



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MBNA Corporation and Subsidiaries

CREDIT CARD FEES AND COSTS
Credit card fees include annual, late, overlimit, returned check, cash advance,
and other miscellaneous fees. These fees are assessed according to agreements
with the Corporations credit card Customers and are included in the
Corporations loan receivables when billed. The credit card fee portion of a
charged-off loan is deducted from current period credit card fee income.

Annual credit card fees and incremental direct loan origination costs are
deferred and amortized on a straight-line basis over the one-year period to
which they pertain. The Corporation does not charge an annual credit card fee
during the first year the account is originated. The deferred annual credit
card fees are included in accrued expenses and other liabilities in the
Corporations consolidated statement of financial condition. Incremental direct
loan origination costs are deferred only in the first year and are included in
prepaid expenses and deferred charges. At December 31, 2001 and 2000, the
incremental direct loan origination costs deferred were $49.8 million and $43.4
million, respectively. The Corporation expenses marketing costs as incurred.

INTERCHANGE INCOME
Interchange income is a fee paid by a merchant bank to the card-issuing bank
through the interchange network as compensation for risk, grace period, and
other operating costs. Such fees are set annually by MasterCard International
Inc. and Visa U.S.A. Inc. and are based on cardholder sales volumes. The
Corporation recognizes interchange income as earned. The Corporation offers to
its Customers certain reward programs based on charge volumes. The costs of
these reward programs are deducted from interchange income. The costs of the
reward programs related to securitized loans are deducted from securitization
income.

OTHER OPERATING INCOME
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB No. 101). SAB No. 101 provided further guidance in applying generally
accepted accounting principles to accounting for revenue recognition. In
accordance with SAB No. 101, all related revenues received for services
rendered by the Corporation are deferred until any refund period lapses or the
fee is contractually earned. The Corporation adopted SAB No. 101 during 2000
and the implementation of SAB No. 101 did not have a material impact on the
Corporations consolidated financial statements.

ROYALTIES
The Corporation enters into agreements with endorsing organizations and
financial institutions that allow the Corporation to market its financial
products to their members or customers. The Corporation compensates the
endorsing organization or financial institution in exchange for their
endorsement of the Corporations financial products. Compensation arrangements
that are based on revenue sharing generated from the Customers account are
deducted from interest income, those based on account activation and usage are
charged to other operating expense, and those based on reward programs are
deducted from interchange income. The royalties related to securitized loans
are deducted from securitization income.

INTEREST INCOME ON LOANS
Interest income is recognized based upon the amount of loans outstanding and
their contractual annual percentage rates. The Corporation systematically
accrues interest income on a monthly basis from the Customers statement
billing cycle date to the end of the month. Interest income is included in loan
receivables when billed to the Customer. The Corporation uses certain estimates
and assumptions in the determination of the accrued unbilled portion of
interest income which is included in accrued income receivable in the
Corporations consolidated statement of financial condition. These estimates
and assumptions include the average loan balance subject to interest and the
accounts annual percentage rates. Interest income is generally recognized
until the loan is paid or charged off. The interest portion of a charged-off
loan is deducted from current period interest income.

RESERVE FOR POSSIBLE CREDIT LOSSES
The Corporation maintains the reserve for possible credit losses at an amount
sufficient to absorb losses inherent in the Corporations loan receivables
based on a projection of probable future net credit losses on the Corporations
loan receivables. The Corporations net credit losses include the principal
balance of loans charged off less current period recoveries and exclude accrued
interest and fees and fraud losses. The Corporation regularly performs a
migration analysis of delinquent and current accounts in order to determine an
appropriate reserve for possible credit losses. A migration analysis is a
technique used to estimate the likelihood that a loan receivable will progress
through the various delinquency stages and ultimately charge off. In completing
the analysis of the adequacy of the reserve for possible credit losses, the
impact of economic conditions on the borrowers ability to repay, past
collection experience, the risk characteristics and composition
of the portfolio, and other factors are considered. Significant changes in
these factors could impact the establishment of an appropriate reserve for
possible credit losses. A provision is charged against earnings to maintain the
reserve for possible credit losses at an appropriate level.

The Corporation charges off open-end delinquent retail loans by the end of the
month in which the account becomes 180 days contractually past due, closed-end
delinquent retail loans by the end of the month in which the account becomes
120 days contractually past due, and bankrupt accounts within 60 days of
receiving notification from the bankruptcy courts. The Corporation charges off
deceased accounts when the loss is determined. The Corporation records current
period recoveries on loans previously charged off in the reserve for possible
credit losses. The Corporation sells charged-off loans and records the proceeds
received from these sales as recoveries. The Corporation records acquired
reserves for current period loan acquisitions. The reserve for possible credit
losses is a general allowance applicable to the Corporations loan portfolio
and does not include an allocation for credit risk related to securitized
loans. Net credit losses on securitized loans are absorbed directly by the
related trusts under their respective contractual agreements and do not affect
the reserve for possible credit losses.



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MBNA Corporation and Subsidiaries

INTANGIBLE ASSETS
Intangible assets, including the value of acquired Customer accounts, goodwill,
and all other identifiable intangible assets, are amortized over a period
generally not exceeding ten years. The Corporation amortizes its intangible
assets generally using an accelerated method based on expected future cash
flows from the use of the asset. The Corporation had accumulated amortization
related to its intangible assets of $971.7 million and $588.2 million at
December 31, 2001 and 2000, respectively.

The Corporation reviews the carrying value of its intangible assets for
impairment on a quarterly basis. The intangible assets, which consist primarily
of the value of acquired Customer accounts, are carried at the lower of net
book value or estimated fair value with the estimated fair value determined by
discounting the expected future cash flows from the use of the asset at an
appropriate discount rate. The Corporation performs this impairment valuation
quarterly based on the size and nature of the intangible asset. For intangible
assets that are not considered material, the Corporation performs this
calculation by grouping the assets by year of acquisition. The Corporation
makes certain estimates and assumptions that affect the determination of the
fair value of the intangible assets. These estimates and assumptions include
levels of account activation, active account attrition, funding costs, credit
loss experience, servicing costs, growth in average account balances, interest
and fees assessed on loans, and other factors. Significant changes in these
estimates and assumptions could result in an impairment of the intangible asset
and a write down of the carrying value of the intangible asset.

In June 2001, Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets (Statement No. 142), was issued. The effective
date for Statement No. 142 is for fiscal years beginning after December 15,
2001. In accordance with Statement No. 142, goodwill and intangible assets
determined to have indefinite lives will no longer be amortized, but will
instead be subject to an annual impairment test. At December 31, 2001, the
Corporation did not have a material amount of goodwill or intangible assets
with indefinite lives or any other nonamortizing intangible assets. Other
separately identifiable intangible assets, which for the Corporation are
primarily the value of acquired Customer accounts, will continue to be
amortized over their estimated useful lives. The Corporation currently
amortizes the value of acquired Customer accounts over a period that is
generally limited to ten years. In accordance with Statement No. 142, the
Corporation completed an analysis of the associated benefits of the value of
its acquired Customer accounts. As a result, the Corporation will extend the
amortization period of the value of acquired Customer accounts, generally to 15
years, to better match their estimated useful lives. The change in estimated
useful lives upon the implementation of Statement No. 142 will decrease
amortization expense related to the Corporations existing intangible assets in
future periods and will not have a material impact on the Corporations
consolidated financial statements.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
The Corporation adopted Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments
and Hedging Activities (Statement No. 133), as amended by Statement of
Financial Accounting Standards No. 137, Accounting for Derivative Instruments
and Hedging ActivitiesDeferral of the Effective Date of FASB Statement No.
133 (Statement No. 137) and Statement of Financial Accounting Standards No.
138, Accounting for Certain Derivative Instruments and Certain Hedging
Activitiesan Amendment of FASB Statement No. 133 (Statement No. 138), on
January 1, 2001. The standards required that all derivative financial
instruments be recorded on the Corporations consolidated statement of
financial condition at fair value and established criteria for designation and
effectiveness of hedging relationships. The Corporation recognized a $2.5
million (pretax) loss upon implementation of Statement No. 133, as amended by
Statement No. 137 and Statement No. 138, on January 1, 2001.

The Corporation utilizes certain derivative financial instruments to enhance
its ability to manage interest rate risk and foreign currency exchange rate
risk which exist as part of its ongoing business operations. Derivative
financial instruments are entered into for periods which match the related
underlying exposures and do not constitute positions independent of these
exposures. The Corporation does not enter into derivative financial instruments
for trading purposes, nor is it a party to any leveraged derivative financial
instruments. The Corporation can designate derivative financial instruments as
either fair value hedges, cash flow hedges, or hedges of net investments. The
Corporation also has derivative financial instruments that are not designated
as an accounting hedge, which reduce its exposure to foreign currency exchange
rate risk. The Corporation accounts for changes in the fair value of fair value
hedges and the corresponding hedged item as a component of other operating
income on the Corporations consolidated statement of income. The Corporation
does not have cash flow hedges or hedges of net investments. For derivative
financial instruments that are not designated as an accounting hedge, the
change in fair value is reported in other operating income on
the Corporations consolidated statement of income. The gross unrealized gains
and gross unrealized losses on the Corporations derivative financial
instruments are included as a component of other assets or accrued expenses and
other liabilities, respectively, on the Corporations consolidated statement of
financial condition. The gross unrealized gains and gross unrealized losses on
the corresponding hedged item are included as part of the carrying value of the
hedged item on the Corporations consolidated statement of financial condition.

Amounts related to outstanding interest rate swap agreements are accrued and
recognized in earnings, as an adjustment to the related interest income or
interest expense of the hedged asset/liability, over the life of the related
agreement. Gains and losses associated with the termination of interest rate
swap agreements for identified positions are deferred and amortized over the
remaining lives of the related underlying assets/liabilities as an adjustment
to the yield/rate. Unamortized deferred gains and losses associated with
terminated interest rate swap agreements are included in the underlying
assets/liabilities hedged.



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MBNA Corporation and Subsidiaries

LOAN RECEIVABLE FRAUD LOSSES
The Corporation incurs loan receivable fraud losses from the unauthorized use
of Customer accounts and counterfeiting. These fraudulent transactions, when
identified, are reclassified to other assets from loans and reduced to
estimated net recoverable values through a charge to other operating expense.

PREPAID EXPENSES AND DEFERRED CHARGES
The principal components of prepaid expenses and deferred charges include
unamortized direct loan origination costs, royalties advanced to the
Corporations endorsing organizations and financial institutions, prepaid
benefit plan costs and commissions paid on brokered certificates of deposit.
These costs are deferred and amortized over the period the Corporation receives
a benefit or the remaining term of the liability.

INSURANCE INCOME
The Corporations insurance income primarily relates to fees received for
marketing credit related life and disability insurance and debt cancellation
contracts. The Corporation also receives fees for marketing automobile,
annuity, and life and health insurance products. The amount of insurance income
recorded is generally based on insurance policies and debt cancellation
contracts in force. The Corporation recognizes insurance income over the policy
or contract period as earned.

INCOME TAXES
The Corporation accounts for income taxes using the liability method. Under the
liability method, deferred tax assets and liabilities are determined based on
the differences between the financial statement carrying amounts and the tax
bases of existing assets and liabilities (i.e., temporary differences), and are
measured at the prevailing enacted tax rates that will be in effect when these
differences are settled or realized.

STATEMENTS OF CASH FLOWS
The Corporation has presented the consolidated statements of cash flows using
the indirect method, which involves the reconciliation of net income to net
cash flow from operating activities. In addition, the Corporation nets certain
cash receipts and cash payments relating to deposits placed with and withdrawn
from other financial institutions; time deposits accepted and repayments of
those deposits; and loans made to Customers and principal collections of those
loans. For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash and due from banks.

NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, Financial Accounting Standards Board Technical Bulletin No. 01-1,
Effective Date for Certain Financial Institutions of Certain Provisions of
Statement No. 140 Related to the Isolation of Transferred Financial Assets
(Technical Bulletin No. 01-1), was issued. Technical Bulletin No. 01-1
applies to single-step securitization structures utilized by the Corporation
and clarifies certain isolation criteria related to the transfer of loan
receivables that are required by Statement No. 140 to account for asset
securitizations as sales. Technical Bulletin No. 01-1 delayed the effective
date of Statement No. 140 as it applies to single-step securitization
structures for transactions occurring after December 31, 2001. Technical
Bulletin No. 01-1 also provides an extended transition period until June 30,
2006, for conversion of existing single-step master trust securitization
structures to allow issuers, if necessary, additional time to obtain sufficient
approvals from the beneficial interest holders to convert to a two-step
securitization structure
and continue to meet the isolation criteria required by Statement No. 140 to
achieve sales treatment. The Corporation believes
that the required changes in its securitization structures are not significant,
and that the implementation of any required changes will not have a material
impact on the Corporations consolidated financial statements. In January 2002,
the State of Delaware passed legislation that may enable the Corporation to use
a single-step securitization structure and continue to meet the isolation
criteria of Statement No. 140, thereby maintaining sales treatment with the
single-step securitization structure.

In August 2001, Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (Statement
No. 144), was issued. The provisions of Statement No. 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001.
Statement No. 144 addresses the accounting and reporting for the impairment or
disposal of certain tangible or intangible long-lived assets. Statement No. 144
replaces Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and the accounting and reporting provisions of Accounting Principles Board
Opinion No. 30, Reporting the Results of OperationsReporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. The implementation of
Statement No. 144 will not impact the Corporations consolidated financial
statements.

NOTE B: CASH AND DIVIDEND RESTRICTIONS
The Bank is required by the Federal Reserve Bank to maintain cash reserves
against certain categories of average deposit liabilities. During 2001 and
2000, the average amount of these reserves was $18.0 million and $7.5 million,
respectively, after deducting currency and coin holdings.

Included in the Corporations interest-earning time deposits at December 31,
2001 and 2000 were $31.3 million and $35.1 million, respectively, that are
collateralizing advances provided by an underwriter of MBNA Europes
securitization transactions completed in 2000.

The payment of dividends in the future and the amount of such dividends, if
any, will be at the discretion of the Corporations Board of Directors. The
payment of preferred and common stock dividends by the Corporation may be
limited by certain factors, including regulatory capital requirements, broad
enforcement powers of the federal bank regulatory agencies, and tangible net
worth maintenance requirements under the Corporations revolving credit
facilities. The payment of common stock dividends may also be limited by the
terms of the Corporations preferred stock. If the Corporation has not paid
scheduled dividends on the preferred stock, or declared the dividends and set
aside funds for payment, the Corporation may not declare or pay any cash
dividends on



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MBNA CORPORATION AND SUBSIDIARIES

the common stock. In addition, if the Corporation defers interest for
consecutive periods covering 10 semiannual periods or 20 consecutive quarterly
periods, depending on the series, on its guaranteed preferred beneficial
interests in Corporations junior subordinated deferrable interest debentures,
the Corporation may not be permitted to declare or pay any cash dividends on
the Corporations capital stock or interest on debt securities that have equal
or lower priority than the junior subordinated deferrable interest debentures.

The Corporation is a legal entity separate and distinct from its banking and
other subsidiaries. The primary source of funds for payment of preferred and
common stock dividends by the Corporation is dividends received from the Bank.
The amount of dividends that a national bank may declare in any year is subject
to certain regulatory restrictions. Generally, dividends declared in a given
year by a national bank are limited to its net profit, as defined by regulatory
agencies, for that year, combined with
its retained net income for the preceding two years, less any required transfer
to surplus or to a fund for the retirement of any preferred stock. In addition,
a national bank may not pay any dividends in an amount greater than its
undivided profit. Under current regulatory practice, national banks may pay
dividends only out of current operating earnings. Also, a national bank may not
declare dividends if such declaration would leave the bank inadequately
capitalized. Therefore, the ability of the Bank to declare dividends will
depend on its future net income and capital requirements. At December 31, 2001,
the amount of retained earnings available for declaration and payment of
dividends from the Bank to the Corporation was $3.2 billion. Payment of
dividends by the Bank to the Corporation, however, can be further limited by
federal bank regulatory agencies.

The Banks payment of dividends to the Corporation may also be limited by a
tangible net worth requirement under the senior syndicated revolving credit
facility. This facility was not drawn upon at December 31, 2001. If this
facility had been drawn upon at December 31, 2001, the amount of retained
earnings available for declaration of dividends would have been further limited
to $1.5 billion.

NOTE C: CREDIT CARD BUSINESS ACQUISITION
On March 28, 1999, the Bank acquired the credit card business of PNC Bank, N.A.
for approximately $3.2 billion. The acquisition, accounted for as a purchase,
included $2.7 billion of credit card loan receivables. The Bank funded the
acquisition from the proceeds of the issuance of shares of common stock by the
Corporation in January 1999, from securitization of credit card loan
receivables, and from the proceeds of maturing money market investments.

NOTE D: RELATED PARTY TRANSACTIONS
The Corporations directors, executive officers, certain members of their
immediate families, and certain affiliated companies hold credit cards or other
lines of credit issued by the Corporation on the same terms prevailing at the
time for those issued to other persons. The outstanding amounts are included in
loan receivables on the Corporations consolidated statement of financial
condition and were not material to the Corporations financial results.

NOTE E: EARNINGS PER COMMON SHARE
Earnings per common share is computed using net income applicable to common
stock and weighted average common shares outstanding during the period.
Earnings per common shareassuming dilution is computed using net income
applicable to common stock and weighted average common shares outstanding
during the period after consideration of the potential dilutive effect of
common stock equivalents, based on the treasury stock method using an average
market price for the period. The Corporations common stock equivalents are
solely related to employee and director stock options. The Corporation does not
have any other common stock equivalents.

Computation of Earnings Per Common Share
dollars in thousands, except per share amounts    |

|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|----------------------------------------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|Year Ended December 31,                                                       |  | 2001 |           | 2000 |  | 1999
|                                                                             
|Earnings per Common Share                                                     |  |      |           |      |  |      |           |  |  |   |           | 
|Net income                                                                    |  | $    | 1,694,291 |      |  | $    | 1,312,532 |  |  | $ | 1,024,423 | 
|Less: preferred stock dividend requirements                                   |  |      | 14,142    |      |  |      | 14,674    |  |  |   | 14,313    | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Net income applicable to common stock                                         |  | $    | 1,680,149 |      |  | $    | 1,297,858 |  |  | $ | 1,010,110 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Weighted average common shares outstanding (000)                              |  |      | 851,830   |      |  |      | 820,551   |  |  |   | 801,020   | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Earnings per common share                                                     |  | $    | 1.97      |      |  | $    | 1.58      |  |  | $ | 1.26      | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Earnings per Common ShareAssuming Dilution                                   |  |      |           |      |  |      |           |  |  |   |           | 
|Net income                                                                    |  | $    | 1,694,291 |      |  | $    | 1,312,532 |  |  | $ | 1,024,423 | 
|Less: preferred stock dividend requirements                                   |  |      | 14,142    |      |  |      | 14,674    |  |  |   | 14,313    | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Net income applicable to common stock                                         |  | $    | 1,680,149 |      |  | $    | 1,297,858 |  |  | $ | 1,010,110 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Weighted average common shares outstanding (000)                              |  |      | 851,830   |      |  |      | 820,551   |  |  |   | 801,020   | 
|Net effect of dilutive stock options (000)                                    |  |      | 24,323    |      |  |      | 25,984    |  |  |   | 36,063    | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Weighted average common shares outstanding and common stock equivalents (000) |  |      | 876,153   |      |  |      | 846,535   |  |  |   | 837,083   | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 
|Earnings per common shareassuming dilution                                   |  | $    | 1.92      |      |  | $    | 1.53      |  |  | $ | 1.21      | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |           | 

There were 11,323,000 stock options with an average option price of $32.57 per
share outstanding at December 31, 2001, which were not included in the
computation of earnings per common shareassuming dilution for 2001 as a result
of the stock options exercise price being greater than the average market
price of the common shares. These stock options expire in 2010 and 2011.



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64  |  Think of Yourself as a Customer






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##### 



MBNA Corporation and Subsidiaries

NOTE F: INVESTMENT SECURITIES

Summary of Investment Securities
dollars in thousands    |

|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |           |           | 
|----------------------------------------- | ------------------------------------------------------------ | ---------------------------------------------- | ---------------------------------------------- | --------- | --------- | --------- | ---------- | ------ | ---------- | ------ | ------ | ------- | ------ | ------- | - | --------- | --------- | --------- | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        | Gross      |        | Gross  |         |        |         |  
|                                          |                                                              |                                                |                                                |           | Amortized |           | Unrealized |        | Unrealized |        | Market
|                                          |                                                              |                                                |                                                |           | Cost      |           | Gains      |        | Losses     |        | Value 
|                                          |                                                              |                                                |                                                |           |          
|December 31, 2001                         |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|Investment securities available-for-sale: |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 2,134,378 |           |           | $          | 29,971 |            |        | $      | (699    | )      |         | $ | 2,163,650 |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 105,067   |           |           |            | 41     |            |        |        |        |        |         |   | 105,108   |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 838,266   |           |           |            | 942    |            |        |        | (1,082  | )      |         |   | 838,126   |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              |                                                | Total investment securities available-for-sale |           | $         | 3,077,711 |            |        | $          | 30,954 |        |         | $      | (1,781  | ) |           | $         | 3,106,884 | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|Investment securities held-to-maturity:   |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 370,613   |           |           | $          | 456    |            |        | $      | (15,548 | )      |         | $ | 355,521   |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 6,692     |           |           |            | 1,389  |            |        |        | (9      | )      |         |   | 8,072     |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 62,682    |           |           |            | 42     |            |        |        |        |        |         |   | 62,724    |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              |                                                | Total investment securities held-to-maturity   |           | $         | 439,987   |            |        | $          | 1,887  |        |         | $      | (15,557 | ) |           | $         | 426,317   | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|December 31, 2000                         |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|Investment securities available-for-sale: |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 1,704,107 |           |           | $          | 6,351  |            |        | $      | (1,790  | )      |         | $ | 1,708,668 |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 95,811    |           |           |            | 30     |            |        |        |        |        |         |   | 95,841    |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 862,044   |           |           |            | 390    |            |        |        | (747    | )      |         |   | 861,687   |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              | Total investment securities available-for-sale |                                                | $         | 2,661,962 |           |            | $      | 6,771      |        |        | $       | (2,537 | )       |   | $         | 2,666,196 |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|Investment securities held-to-maturity:   |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 315,707   |           |           | $          | 74     |            |        | $      | (15,398 | )      |         | $ | 300,383   |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 6,095     |           |           |            | 101    |            |        |        | (113    | )      |         |   | 6,083     |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 62,286    |           |           |            |       |            |        |        | (205    | )      |         |   | 62,081    |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              |                                                | Total investment securities held-to-maturity   |           | $         | 384,088   |            |        | $          | 175    |        |         | $      | (15,716 | ) |           | $         | 368,547   | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|December 31, 1999                         |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|Investment securities available-for-sale: |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 1,593,232 |           |           | $          |       |            |        | $      | (15,880 | )      |         | $ | 1,577,352 |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 97,792    |           |           |            |       |            |        |        | (1      | )      |         |   | 97,791    |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 1,081,281 |           |           |            | 149    |            |        |        | (3,910  | )      |         |   | 1,077,520 |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              |                                                | Total investment securities available-for-sale |           | $         | 2,772,305 |            |        | $          | 149    |        |         | $      | (19,791 | ) |           | $         | 2,752,663 | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|Investment securities held-to-maturity:   |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |          
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $                                              | 248,652   |           |           | $          |       |            |        | $      | (28,086 | )      |         | $ | 220,566   |          
|                                          | State and political subdivisions of the United States        |                                                |                                                | 6,163     |           |           |            | 33     |            |        |        | (720    | )      |         |   | 5,476     |          
|                                          | Asset-backed and other securities                            |                                                |                                                | 38,826    |           |           |            |       |            |        |        | (36     | )      |         |   | 38,790    |          
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          
|                                          |                                                              |                                                | Total investment securities held-to-maturity   |           | $         | 293,641   |            |        | $          | 33     |        |         | $      | (28,842 | ) |           | $         | 264,832   | 
|                                          |                                                              |                                                |                                                |           |           |           |            |        |            |        |        |         |        |         |   |           |          

Estimated Maturities of Investment Securities
dollars in thousands|

|                                         |                                        |                             |   |           |           |        |   |           |           | 
|---------------------------------------- | -------------------------------------- | --------------------------- | - | --------- | --------- | ------ | - | --------- | --------- | 
|                                         |                                        |                             |   | Amortized |           | Market
|December 31, 2001                        |                                        | Cost                        |   | Value    
|Investment
Securities Available-for-Sale |                                        |                             |   |           |           |        |   |          
|                                         | Due within one year                    |                             | $ | 1,064,890 |           |        | $ | 1,075,252 |          
|                                         | Due after one year through five years  |                             |   | 2,003,557 |           |        |   | 2,022,400 |          
|                                         | Due after five years through ten years |                             |   | 8,533     |           |        |   | 8,504     |          
|                                         | Due after ten years                    |                             |   | 731       |           |        |   | 728       |          
|                                         |                                        |                             |   |           |           |        |   |           |          
|                                         |                                        | Total investment securities |   |           |           |        |   |           |           | 
|                                         |                                        | available-for-sale          |   | $         | 3,077,711 |        |   | $         | 3,106,884 | 
|                                         |                                        |                             |   |           |           |        |   |           |          
|Investment
Securities Held-to-Maturity   |                                        |                             |   |           |           |        |   |          
|                                         | Due within one year                    |                             | $ | 1,000     |           |        | $ | 1,000     |          
|                                         | Due after one year through five years  |                             |   | 1,181     |           |        |   | 1,224     |          
|                                         | Due after five years through ten years |                             |   | 649       |           |        |   | 649       |          
|                                         | Due after ten years                    |                             |   | 437,157   |           |        |   | 423,444   |          
|                                         |                                        |                             |   |           |           |        |   |           |          
|                                         |                                        | Total investment securities |   |           |           |        |   |           |           | 
|                                         |                                        | held-to-maturity            |   | $         | 439,987   |        |   | $         | 426,317   | 
|                                         |                                        |                             |   |           |           |        |   |           |          

For the year ended December 31, 2001, the Corporation sold investment
securities available-for-sale resulting in a realized loss of $36,000,
having a net after-tax effect of $23,000. The Corporation did
not sell any investment securities during 2000 and 1999. The
Corporation had pledged investment securities with a book
value of $2.8 billion and $601.8 million at December 31, 2001 and 2000,
respectively. These investment securities were pledged as part of the
Corporations funding and liquidity programs.



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Think of Yourself as a
Customer  |  65






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##### 



MBNA Corporation and Subsidiaries

NOTE G: GEOGRAPHIC DIVERSIFICATION OF LOANS
The Corporation originates credit card and other consumer loans, primarily
throughout the United States, the United Kingdom, Ireland, and Canada. Credit
card and other consumer loans originated in the United States are broadly
distributed throughout the United States geographic regions. Credit card and
other consumer loans issued by MBNA Europe are primarily located in the United
Kingdom and Ireland, while MBNA Canada issues credit card and other consumer
loans in Canada. The following table details the geographic distribution of the
Corporations loan receivables, securitized loans, and managed loans.

The Corporations loans are generally made on an unsecured basis after
reviewing each potential Customers credit application and evaluating the
applicants financial history and ability and willingness to repay. The average
credit line to individual Customers is approximately $11,100 and the average
balance per account is approximately $3,600 at December 31, 2001.

Geographic Distribution of Loan Receivables, Securitized Loans, and Managed Loans
dollars in thousands

|                       |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |      |       |  
|---------------------- | ------------ | ----- | --------- | ---------------- | ---------- | ----------------- | ---- | ------------- | ----- | - | --------- | ---------- | ---------- |  | --- | ---- | ----- | - | --------- | ---------- | ---------- |  | --- | ---- | ----- | -
|                       |              |       |           | Loan Receivables |            | Securitized Loans |      | Managed Loans
|                      
|December 31,
2001      |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |     
|United States:         |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |     
|                       | Northern     |       | $         | 2,470,728        |            |                   |      | 10.0          | %     |   | $         | 8,484,970  |            |  |     | 11.6 | %     |   | $         | 10,955,698 |            |  |     | 11.2 | %    
|                       | Mid-Atlantic |       |           | 3,558,029        |            |                   |      | 14.5          |       |   |           | 11,692,313 |            |  |     | 16.1 |       |   |           | 15,250,342 |            |  |     | 15.6 |      
|                       | Southern     |       |           | 4,028,540        |            |                   |      | 16.4          |       |   |           | 13,452,626 |            |  |     | 18.5 |       |   |           | 17,481,166 |            |  |     | 17.9 |      
|                       | Central      |       |           | 3,479,120        |            |                   |      | 14.1          |       |   |           | 11,207,159 |            |  |     | 15.4 |       |   |           | 14,686,279 |            |  |     | 15.1 |      
|                       | Western      |       |           | 3,766,008        |            |                   |      | 15.3          |       |   |           | 11,974,475 |            |  |     | 16.4 |       |   |           | 15,740,483 |            |  |     | 16.2 |      
|                       | Southwestern |       |           | 2,881,953        |            |                   |      | 11.7          |       |   |           | 9,241,436  |            |  |     | 12.7 |       |   |           | 12,123,389 |            |  |     | 12.4 |      
|United Kingdom/Ireland |              |       | 3,630,104 |                  |            |                   | 14.7 |               |       |   | 5,245,294 |            |            |  | 7.2 |      |       |   | 8,875,398 |            |            |  | 9.1 |     
|Canada                 |              |       | 493,129   |                  |            |                   | 2.0  |               |       |   | 1,412,675 |            |            |  | 1.9 |      |       |   | 1,905,804 |            |            |  | 2.0 |     
|Other                  |              |       | 325,953   |                  |            |                   | 1.3  |               |       |   | 151,539   |            |            |  | .2  |      |       |   | 477,492   |            |            |  | .5  |     
|                       |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |      |      
|                       |              | Total |           | $                | 24,633,564 |                   |      |               | 100.0 | % |           | $          | 72,862,487 |  |     |      | 100.0 | % |           | $          | 97,496,051 |  |     |      | 100.0 | %
|                       |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |      |      
|                      
|December 31,
2000      |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |     
|United States:         |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |     
|                       | Northern     |       | $         | 2,030,566        |            |                   |      | 10.2          | %     |   | $         | 8,087,870  |            |  |     | 11.8 | %     |   | $         | 10,118,436 |            |  |     | 11.4 | %    
|                       | Mid-Atlantic |       |           | 3,165,064        |            |                   |      | 15.8          |       |   |           | 11,243,051 |            |  |     | 16.3 |       |   |           | 14,408,115 |            |  |     | 16.2 |      
|                       | Southern     |       |           | 3,626,115        |            |                   |      | 18.2          |       |   |           | 12,637,202 |            |  |     | 18.4 |       |   |           | 16,263,317 |            |  |     | 18.3 |      
|                       | Central      |       |           | 2,721,175        |            |                   |      | 13.6          |       |   |           | 10,714,512 |            |  |     | 15.6 |       |   |           | 13,435,687 |            |  |     | 15.1 |      
|                       | Western      |       |           | 2,899,666        |            |                   |      | 14.5          |       |   |           | 11,516,393 |            |  |     | 16.7 |       |   |           | 14,416,059 |            |  |     | 16.3 |      
|                       | Southwestern |       |           | 2,155,676        |            |                   |      | 10.8          |       |   |           | 8,766,284  |            |  |     | 12.7 |       |   |           | 10,921,960 |            |  |     | 12.3 |      
|United Kingdom/Ireland |              |       | 2,667,056 |                  |            |                   | 13.4 |               |       |   | 4,698,495 |            |            |  | 6.8 |      |       |   | 7,365,551 |            |            |  | 8.3 |     
|Canada                 |              |       | 456,171   |                  |            |                   | 2.3  |               |       |   | 1,020,038 |            |            |  | 1.5 |      |       |   | 1,476,209 |            |            |  | 1.7 |     
|Other                  |              |       | 233,348   |                  |            |                   | 1.2  |               |       |   | 152,039   |            |            |  | .2  |      |       |   | 385,387   |            |            |  | .4  |     
|                       |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |      |      
|                       |              | Total |           | $                | 19,954,837 |                   |      |               | 100.0 | % |           | $          | 68,835,884 |  |     |      | 100.0 | % |           | $          | 88,790,721 |  |     |      | 100.0 | %
|                       |              |       |           |                  |            |                   |      |               |       |   |           |            |            |  |     |      |       |   |           |            |            |  |     |      |      
|                      

NOTE H: RESERVE FOR POSSIBLE CREDIT LOSSES
In December 2001, the Corporation elected to amend its securitization
agreements to transfer the legal right to recoveries from charged-off
securitized loans from the Corporation to the securitization transaction cash
flows. Previously, the Corporation recognized these recoveries in the reserve
for possible credit losses. The Corporation now includes recoveries from
charged-off securitized loans in accounts receivable from securitization and
excludes these recoveries from the reserve for possible credit losses. For
comparability purposes, certain prior period amounts have been reclassified.
This reclassification did not affect the Corporations net income, earnings per
common share, or managed loan quality ratios.

In February 1999, the Federal Financial Institutions Examination Council
(FFIEC) revised its policy on the classification of consumer loans. The
revised policy established uniform guidelines for the charge off of loans to
delinquent, bankrupt, and deceased borrowers, for charge off of fraudulent
accounts, and for re-aging delinquent accounts. The Corporation implemented the
FFIEC guidelines in December 2000 by accelerating the charge off of some
delinquent loans. The one-time FFIEC adjustment did not have a material impact
on the Corporations consolidated statement of income for the year ended
December 31, 2000.

Changes in the Reserve for Possible Credit Losses
dollars in thousands    |

|                                                      |                                      |                   |         |           |          |      |         |          |          |   |         |          |          |  
|----------------------------------------------------- | ------------------------------------ | ----------------- | ------- | --------- | -------- | ---- | ------- | -------- | -------- | - | ------- | -------- | -------- | -
|December 31,                                          |                                      | 2001              |         | 2000      |          | 1999
|                                                     
|Reserve for possible credit losses,
beginning of year |                                      | $                 | 527,573 |           |          | $    | 516,261 |          |          | $ | 296,474 |         
|                                                      | Reserves acquired                    |                   |         | 20,748    |          |      |         | 64,726   |          |   |         | 109,757  |         
|                                                      | Provision for possible
credit losses |                   |         | 1,140,615 |          |      |         | 547,309  |          |   |         | 636,614  |         
|                                                      | Foreign currency translation         |                   |         | (499      | )        |      |         | (1,081   | )        |   |         | (96      | )       
|                                                      | Credit losses                        |                   |         | (924,473  | )        |      |         | (646,857 | )        |   |         | (567,929 | )       
|                                                      | Recoveries                           |                   |         | 69,459    |          |      |         | 47,215   |          |   |         | 41,441   |         
|                                                      |                                      |                   |         |           |          |      |         |          |          |   |         |         
|                                                      |                                      | Net credit losses |         |           | (855,014 | )    |         |          | (599,642 | ) |         |          | (526,488 | )
|                                                      |                                      |                   |         |           |          |      |         |          |          |   |         |         
|Reserve for possible credit losses,
end of year       |                                      | $                 | 833,423 |           |          | $    | 527,573 |          |          | $ | 516,261 |         
|                                                      |                                      |                   |         |           |          |      |         |          |          |   |         |         



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66  |  Think of Yourself as a Customer






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##### 



MBNA Corporation and Subsidiaries

NOTE I: PREMISES AND EQUIPMENT
Depreciation expense for the years ended December 31, 2001, 2000, and 1999 was
$208.0 million, $187.6 million, and $183.9 million, respectively.

Summary of Premises and Equipment
dollars in thousands    |

|             |                            |                             |   |            |           |  |   |           |           | 
|------------ | -------------------------- | --------------------------- | - | ---------- | --------- |  | - | --------- | --------- | 
|December 31, |                            | 2001                        |   | 2000      
|            
|             | Land                       |                             | $ | 215,649    |           |  | $ | 185,078   |          
|             | Buildings and improvements |                             |   | 1,842,850  |           |  |   | 1,556,110 |          
|             | Furniture and equipment    |                             |   | 1,117,188  |           |  |   | 920,993   |          
|             |                            |                             |   |            |           |  |   |           |          
|             |                            | Total                       |   |            | 3,175,687 |  |   |           | 2,662,181 | 
|             | Accumulated depreciation   |                             |   |            |           |  |   |           |          
|             | and amortization           |                             |   | (1,063,548 | )         |  |   | (881,170  | )        
|             |                            |                             |   |            |           |  |   |           |          
|             |                            | Premises and equipment, net |   | $          | 2,112,139 |  |   | $         | 1,781,011 | 
|             |                            |                             |   |            |           |  |   |           |          

The Corporation leases certain office facilities and equipment under operating
lease agreements that provide for payment of property taxes, insurance, and
maintenance costs. These leases generally include renewal options, with certain
leases providing purchase options. Rental expense for operating leases was
$26.7 million, $28.7 million, and $33.0 million for the years ended December
31, 2001, 2000, and 1999, respectively.

Future Minimum Rental Payments Under Noncancelable
Operating Leases
dollars in thousands|

|           |                              |   |        |        | 
|---------- | ---------------------------- | - | ------ | ------ | 
|2002       |                              | $ | 28,712 |       
|2003       |                              |   | 23,786 |       
|2004       |                              |   | 16,280 |       
|2005       |                              |   | 11,815 |       
|2006       |                              |   | 6,695  |       
|Thereafter |                              |   | --     |       
|           |                              |   |        |       
|           | Total minimum lease payments |   | $      | 87,288 | 
|           |                              |   |        |       

NOTE J: ASSET SECURITIZATION
Asset securitization removes loan receivables from the Corporations
consolidated statement of financial condition and converts interest income,
interchange income, credit card and other fees, insurance income, and
recoveries in excess of interest paid to investors, credit losses, and other
trust expenses into securitization income. Asset securitization involves the
sale, generally to a trust, of a pool of loan receivables, and is accomplished
primarily through the public and private issuance of asset-backed securities.
Certificates representing undivided interests in the trust are sold by the
trust to investors, while the remaining undivided interest is retained by the
Corporation. The Corporation includes the remaining undivided interest in loan
receivables and had $14.6 billion and $12.2 billion at December 31, 2001 and
2000, respectively. The carrying value of these loan receivables approximates
fair value. The senior classes of the asset-backed securities receive a AAA
credit rating at the time of issuance. This AAA credit rating is generally
achieved through the sale of lower-rated subordinated classes of asset-backed
securities.

During 2001 and 2000, the Corporation sold loan receivables in numerous
securitization transactions. At December 31, 2001 and 2000, the trusts had
approximately $71.1 billion and $67.2 billion, respectively, of investor
principal outstanding. The Corporation retains servicing responsibilities for
the loans in the trust and maintains other retained interests in the
securitized assets. These retained interests include an interest-only strip
receivable, cash reserve accounts, and in some transactions a subordinated
interest. The Corporation receives annual contractual servicing fees of
approximately 2% of the investor principal outstanding and rights to current
and future revenue generated from securitized loans arising after the investors
in the trust receive the return for which they have contracted and credit
losses are absorbed. The Corporation does not record a servicing asset or a
liability for these rights since the contractual servicing fee approximates its
market value. The investors and providers of credit enhancement have a lien on
a portion of these retained interests. The Corporation has no further
obligation to provide further funding support to either the investors or the
trusts if the securitized loans are not paid when due. The Corporations
retained interests are subordinate to the investors interests. The value of
the retained interests is subject to credit, payment, and interest rate risks
on the transferred financial assets. The Corporation records these retained
interests in accounts receivable from securitization.

Accounts receivable from securitization also includes other receivables due
from the trusts. The Corporation records a receivable for the sale of new loan
receivables that have been transferred to the trust during the revolving
period. The Corporation realizes the receivable for these sales from the trust
in the month following the sale. The Corporation also records a receivable for
accrued interest and fees on securitized loans that relate to the rights
transferred by the Corporation to the trust for the cash collection of interest
and fees accrued on loan receivables prior to the securitization transaction.
The Corporation regains the right to keep the collection of the accrued
interest and fees from the Customer during the amortization period of the
securitization transaction. As securitized loans are paid off and new loan
receivables are transferred to the investor interest in the trust during the
revolving period, this receivable is collected and re-established on a monthly
basis at an amount that approximates its fair value due to its short-term
nature.

Accounts Receivable from Securitization
dollars in thousands    |

|                                      |                                               |      |           |           |  |   |           |           | 
|------------------------------------- | --------------------------------------------- | ---- | --------- | --------- |  | - | --------- | --------- | 
|December 31,                          |                                               | 2001 |           | 2000     
|                                     
|Sale of new loan receivables          |                                               | $    | 2,202,403 |           |  | $ | 2,642,113 |          
|Accrued interest and fees             |                                               |      |           |           |  |   |           |          
|                                      | on securitized loans                          |      |           | 2,216,839 |  |   |           | 2,104,582 | 
|Interest-only strip receivable        |                                               |      | 1,124,063 |           |  |   | 854,326   |          
|Accrued servicing fees                |                                               |      | 688,185   |           |  |   | 324,221   |          
|Cash reserve accounts                 |                                               |      | 397,954   |           |  |   | 292,752   |          
|Other subordinated retained interests |                                               |      | 657,246   |           |  |   | 753,326   |          
|Other                                 |                                               |      | 208,811   |           |  |   | 110,252   |          
|                                      |                                               |      |           |           |  |   |           |          
|                                      | Total accounts receivable
from securitization |      | $         | 7,495,501 |  |   | $         | 7,081,572 | 
|                                      |                                               |      |           |           |  |   |           |          



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##### 



MBNA Corporation and Subsidiaries

Securitization Cash Flows
dollars in billions

|                                                           |  |            |      |               |  |            |  |               |  |   |     |  |  |   |      |  |  |  |  |  |  |   |     | 
|---------------------------------------------------------- |  | ---------- | ---- | ------------- |  | ---------- |  | ------------- |  | - | --- |  |  | - | ---- |  |  |  |  |  |  | - | --- | 
|Year Ended December 31,                                    |  | 2001       |      | 2000         
|                                                          
|                                                           |  | CreditCard |      | OtherConsumer |  | CreditCard |  | OtherConsumer
|                                                          
|Proceeds from new securitizations                          |  | $          | 12.3 |               |  |            |  |               |  | $ |    |  |  | $ | 14.2 |  |  |  |  |  |  | $ | 1.6 | 
|Collections reinvested in revolving-period securitizations |  |            | 92.2 |               |  |            |  |               |  |   | 3.5 |  |  |   | 80.5 |  |  |  |  |  |  |   | 2.8 | 
|Contractual servicing fees received                        |  |            | 1.2  |               |  |            |  |               |  |   | .1  |  |  |   | 1.0  |  |  |  |  |  |  |   | .1  | 
|Cash flows received on retained interests                  |  |            | 3.9  |               |  |            |  |               |  |   | .1  |  |  |   | 2.7  |  |  |  |  |  |  |   | .1  | 

Included in accounts receivable from securitization in the consolidated
statement of financial condition at December 31, 2001 and 2000, were $1.1
billion and $1.0 billion, respectively, of amounts which are subject to a lien
by the investors and providers of credit enhancement in the securitization
transactions. The investors and providers of credit enhancement have no other
recourse to the Corporation. The Corporation does not receive collateral from
any party to the securitization transactions and does not have any risk of
counterparty nonperformance.

In September 2000, Statement No. 140 was issued. Statement No. 140 replaces
Statement of Financial Accounting Standards No. 125, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities
(Statement No. 125), and revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of Statement No. 125s
provisions without reconsideration. The Corporation adopted Statement No. 140s
revised accounting standards for all transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. The
implementation of Statement No. 140 did not have a material impact on the
Corporations consolidated financial statements.

In accordance with Statement No. 140, the Corporation records an interest-only
strip receivable related to the securitization of its loan receivables. The
interest-only strip receivable represents the contractual right to receive
interest and other revenue from the trust and is reported at estimated fair
value with unrealized gains and losses, net of tax, included as a component of
stockholders equity. At each month end, the Corporation adjusts the
interest-only strip receivable to reflect changes in the amount of securitized
loans and key assumptions and estimates. The Corporation recognizes the net
incremental change in the interest-only strip receivable in securitization
income on the Corporations consolidated statement of income. Transaction costs
incurred by the Corporation are immediately recognized as a reduction to
securitization income at the time of the securitization transaction.
Transaction costs for 2001, 2000, and 1999 were $62.3 million, $64.9 million,
and $58.7 million, respectively. Securitization income also includes the
contractual and other fees received by the Corporation for the servicing of the
securitized loans.

The Corporation adopted Emerging Issues Task Force Issue 99-20, Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests
in Securitized Financial Assets (EITF 99-20), on April 1, 2001. As a result,
the Corporation records accretion of interest income related to beneficial
interests retained in a securitization transaction accounted for as a sale as
interest income in the Corporations consolidated statement of income. This
income was previously recorded as securitization income in the Corporations
consolidated statement of income. The implementation of EITF 99-20 did not
impact the Corporations consolidated net income.

Supplemental Loan Delinquency Information (a)

dollars in thousands |

|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |            |  
|----------------------------- | -------------- | ----------------------- | ---------- | ----------- | ----------- | ---------- | --------- | ----------- | ---------- | - | ---------- | ----------- | ----------- | ---------- |  |  |  | - | -------- | ---------- | ---------- | -
|Year Ended December 31,       |                | 2001                    |            | 2000       
|                             
|                              |                |                         |            | Loans       |             | Loans      |           | Loans       |            |   |            |             |             | Loans     
|                              |                |                         |            | Outstanding |             | Delinquent |           | Outstanding |            |   |            |             |             | Delinquent
|                              |                |                         |            |            
|Managed Loans                 |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |           
|                              | Credit card    |                         | $          | 84,318,655  |             |            | $         | 4,125,597   |            |   | $          | 78,124,016  |             |            |  |  |  |   | $        | 3,420,357  |           
|                              | Other consumer |                         |            | 13,177,396  |             |            |           | 836,864     |            |   |            | 10,666,705  |             |            |  |  |  |   |          | 566,181    |           
|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |           
|                              |                | Total managed loans     |            |             | 97,496,051  |            |           |             | 4,962,461  |   |            |             | 88,790,721  |            |  |  |  |   |          |            | 3,986,538  |  
|Securitized Loans             |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |           
|                              | Credit card    |                         |            | (67,159,829 | )           |            |           | (3,367,095  | )          |   |            | (63,076,067 | )           |            |  |  |  |   |          | (2,807,219 | )         
|                              | Other consumer |                         |            | (5,702,658  | )           |            |           | (444,465    | )          |   |            | (5,759,817  | )           |            |  |  |  |   |          | (375,639   | )         
|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |           
|                              |                | Total securitized loans |            |             | (72,862,487 | )          |           |             | (3,811,560 | ) |            |             | (68,835,884 | )          |  |  |  |   |          |            | (3,182,858 | )
|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |           
|Loan receivables              |                |                         | 24,633,564 |             |             |            | 1,150,901 |             |            |   | 19,954,837 |             |             |            |  |  |  |   | 803,680  |           
|Loans held for securitization |                |                         | (9,929,948 | )           |             |            | (469,142  | )           |            |   | (8,271,933 | )           |             |            |  |  |  |   | (348,738 | )         
|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |           
|Loan portfolio                |                | $                       | 14,703,616 |             |             | $          | 681,759   |             |            | $ | 11,682,904 |             |             |            |  |  |  | $ | 454,942  |           
|                              |                |                         |            |             |             |            |           |             |            |   |            |             |             |            |  |  |  |   |          |            |           



---

|(a) |  | Loans delinquent are loans which are 30 days or more past due.
|--- |  | --------------------------------------------------------------



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##### 



MBNA Corporation and Subsidiaries

Supplemental Credit Loss Information
dollars in thousands    |

|                        |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |   | 
|----------------------- |  | ---- | ----------- | ---- | ------ | - | ---------- | - | ------ | - | ---------- | - |  | - | ---------- | - | ------- |  | ---------- |  | ------ | - | ----------- | - | ---------- | - | ---------- | - |  | - | -------- | - |  | - | ---------- | - | 
|Year
ended December 31, |  | 2001 |             | 2000
|                       
|                        |  |      | Average     |      | Credit |   |            |   |        |   | Net Credit |   |  |   |            |   | Average |  | Credit     |  |        |   |             |   | Net Credit
|                        |  |      | Balance     |      | Losses |   | Recoveries |   | Losses |   |            |   |  |   | Balance    |   | Losses  |  | Recoveries |  | Losses
|                        |  |      |             |      |        |   |            |   |       
|Managed Loans           |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |  
|Credit card             |  | $    | 79,008,957  |      |        | $ | 3,865,206  |   |        | $ | (282,118   | ) |  | $ | 3,583,088  |   |         |  |            |  |        | $ | 68,661,028  |   |            | $ | 3,116,240  |   |  | $ | (181,299 | ) |  | $ | 2,934,941  |  
|Other consumer          |  |      | 11,891,031  |      |        |   | 756,563    |   |        |   | (32,623    | ) |  |   | 723,940    |   |         |  |            |  |        |   | 8,783,958   |   |            |   | 490,059    |   |  |   | (24,378  | ) |  |   | 465,681    |  
|Total managed loans     |  |      | 90,899,988  |      |        |   | 4,621,769  |   |        |   | (314,741   | ) |  |   | 4,307,028  |   |         |  |            |  |        |   | 77,444,986  |   |            |   | 3,606,299  |   |  |   | (205,677 | ) |  |   | 3,400,622  |  
|                        |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |   | 
|Securitized Loans       |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |  
|Credit card             |  |      | (64,817,684 | )    |        |   | (3,239,729 | ) |        |   | 229,768    |   |  |   | (3,009,961 | ) |         |  |            |  |        |   | (54,790,675 | ) |            |   | (2,624,680 | ) |  |   | 145,044  |   |  |   | (2,479,636 | )
|Other consumer          |  |      | (5,742,916  | )    |        |   | (457,567   | ) |        |   | 15,514     |   |  |   | (442,053   | ) |         |  |            |  |        |   | (4,936,163  | ) |            |   | (334,762   | ) |  |   | 13,418   |   |  |   | (321,344   | )
|                        |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |   | 
|Total securitized loans |  |      | (70,560,600 | )    |        |   | (3,697,296 | ) |        |   | 245,282    |   |  |   | (3,452,014 | ) |         |  |            |  |        |   | (59,726,838 | ) |            |   | (2,959,442 | ) |  |   | 158,462  |   |  |   | (2,800,980 | )
|                        |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |   | 
|Loan receivables        |  | $    | 20,339,388  |      |        | $ | 924,473    |   |        | $ | (69,459    | ) |  | $ | 855,014    |   |         |  |            |  |        | $ | 17,718,148  |   |            | $ | 646,857    |   |  | $ | (47,215  | ) |  | $ | 599,642    |  
|                        |  |      |             |      |        |   |            |   |        |   |            |   |  |   |            |   |         |  |            |  |        |   |             |   |            |   |            |   |  |   |          |   |  |   |            |   | 
|                       

The Corporation estimates the fair value of the interest-only strip receivable
based on the present value of expected future
net revenue flows using managements judgment in determining certain key
assumptions and estimates, since quoted market prices are generally not
available. These key assumptions and estimates include projections concerning
interest income, late fees, charged-off loan recoveries, gross credit losses,
contractual servicing fees, and the coupon paid to the investors which are used
to determine the excess spread to be received by the Corporation over the
estimated life of the securitized loans. Other key assumptions and estimates
used by the Corporation include projected loan payment rates, which are used to
determine the estimated life of the securitized loans, and an appropriate
discount rate. Based on these key assumptions and estimates and the
Corporations securitization activity, the net incremental change in the
interest-only strip receivable for all securitization transactions recognized
by the Corporation in securitization income, net of securitization transaction
costs, was a $204.2 million increase in 2001, a $22.3 million increase in 2000,
and a $104.1 million increase in 1999. The Corporation reviews the key
assumptions and estimates used in determining the fair value of the
interest-only strip receivable on a quarterly basis. If these assumptions
change or actual results differ from projected results, the interest-only strip
receivable and securitization income would be affected. In December 2001, the
Corporation elected to amend its securitization agreements to transfer the
legal right to recoveries from charged-off securitized loans from the
Corporation to the securitization transaction cash flows. Previously the
Corporation recognized these recoveries in the reserve for possible credit
losses. The Corporation now includes these recoveries in the excess spread used
to determine the interest-only strip receivable which is included in accounts
receivable from securitization. For comparability purposes, certain prior
period amounts have been reclassified.

The Corporations securitization key assumptions and their sensitivity to
adverse changes are presented below. The adverse changes to the key assumptions
and estimates are hypothetical and are presented in accordance with Statement
No. 140. The sensitivities do not reflect actions management might take to
offset the impact of the adverse changes.

Securitization Key Assumptions and Sensitivities (a)
dollars in thousands    |

|                                                |                                            |      |           |         |          |   |         |        |          |   |         |         |  |   |         |        | 
|----------------------------------------------- | ------------------------------------------ | ---- | --------- | ------- | -------- | - | ------- | ------ | -------- | - | ------- | ------- |  | - | ------- | ------ | 
|Year Ended December 31,                         |                                            | 2001 |           | 2000   
|                                               
|                                                |                                            |      | Credit    |         | Other    |   | Credit  |        | Other   
|                                                |                                            |      | Card      |         | Consumer |   | Card    |        | Consumer
|                                                |                                            |      |          
|Interest-only strip receivable                  |                                            | $    | 1,008,419 |         |          | $ | 115,644 |        |          | $ | 698,758 |         |  | $ | 155,568 |       
|Weighted average life (in years)                |                                            |      | .3        |         |          |   | .9      |        |          |   | .3      |         |  |   | .8      |       
|Loan payment rate (weighted average rate)       |                                            |      | 13.60     | %       |          |   | 4.67    | %      |          |   | 13.88   | %       |  |   | 5.26    | %     
|                                                | Impact on fair value of 10% adverse change |      | $         | 78,889  |          |   | $       | 9,372  |          |   | $       | 52,669  |  |   | $       | 12,641 | 
|                                                | Impact on fair value of 20% adverse change |      |           | 144,892 |          |   |         | 17,304 |          |   |         | 99,982  |  |   |         | 23,224 | 
|Gross credit losses (b) (weighted average rate) |                                            |      | 5.25      | %       |          |   | 8.40    | %      |          |   | 4.31    | %       |  |   | 6.17    | %     
|                                                | Impact on fair value of 10% adverse change |      | $         | 102,730 |          |   | $       | 37,333 |          |   | $       | 81,657  |  |   | $       | 24,701 | 
|                                                | Impact on fair value of 20% adverse change |      |           | 205,460 |          |   |         | 74,666 |          |   |         | 163,314 |  |   |         | 49,402 | 
|Excess spread (c) (weighted average rate)       |                                            |      | 5.14      | %       |          |   | 2.60    | %      |          |   | 3.73    | %       |  |   | 3.89    | %     
|                                                | Impact on fair value of 10% adverse change |      | $         | 100,842 |          |   | $       | 11,564 |          |   | $       | 69,876  |  |   | $       | 15,548 | 
|                                                | Impact on fair value of 20% adverse change |      |           | 201,684 |          |   |         | 23,129 |          |   |         | 139,752 |  |   |         | 31,096 | 
|Discount rate (weighted average rate)           |                                            |      | 12.00     | %       |          |   | 12.00   | %      |          |   | 12.00   | %       |  |   | 12.00   | %     
|                                                | Impact on fair value of 10% adverse change |      | $         | 3,105   |          |   | $       | 859    |          |   | $       | 2,111   |  |   | $       | 1,033  | 
|                                                | Impact on fair value of 20% adverse change |      |           | 6,195   |          |   |         | 1,709  |          |   |         | 4,212   |  |   |         | 2,055  | 



---

|(a) |  | The sensitivities do not reflect actions management might take to offset
the impact of the adverse changes.                                                                                           
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Gross credit losses exclude the impact of recoveries; however, recoveries
are included in the determination of the excess spread.                                                                     
|   
|(c) |  | Excess spread includes projections concerning interest income, late fees,
and charged-off loan recoveries, less gross credit losses, contractual
servicing fees, and the coupon paid to the investors.



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Customer  |  69




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##### 



MBNA Corporation and Subsidiaries

NOTE K: SHORT-TERM BORROWINGS
Federal funds purchased and securities sold under repurchase agreements are
overnight borrowings that generally mature within one business day of the
transaction date. Other short-term borrowings consist primarily of federal
funds purchased that mature in more than one business day, short-term bank
notes issued from the global bank note program established by the Bank,
short-term deposit notes issued by MBNA Canada, and other transactions with
maturities greater than one business day but less than one year.

Included in short-term borrowings at December 31, 2001 are two on-balance-sheet
structured financings totaling $1.0 billion, which were entered into during
2001. These structured financings are secured by $1.1 billion of domestic other
consumer loan receivables. The Corporation has an option to liquidate these
structured financings on a monthly basis.

The short-term deposit notes issued by MBNA Canada are unconditionally and
irrevocably guaranteed as to payment of principal and interest by the Bank.
MBNA Canada had CAD$390.6 million (approximately $245.6 million) of short-term
deposit notes at December 31, 2001.

Summary of Short-Term Borrowings
dollars in thousands |

|                                                                        |  |      |           |      |  |      |         |   |  |   |           |  
|----------------------------------------------------------------------- |  | ---- | --------- | ---- |  | ---- | ------- | - |  | - | --------- | -
|Year Ended December 31,                                                 |  | 2001 |           | 2000 |  | 1999
|                                                                       
|Federal Funds Purchased and Securities Sold Under Repurchase Agreements |  |      |           |      |  |      |         |   |  |   |           |  
|Balance at year end                                                     |  | $    |          |      |  | $    |        |   |  | $ | 195,000   |  
|Weighted average interest rate at year end                              |  |      |          | %    |  |      |        | % |  |   | 6.96      | %
|Average balance outstanding during the year                             |  | $    | 1,863     |      |  | $    | 57,139  |   |  | $ | 16,832    |  
|Maximum amount outstanding at any month end                             |  |      |          |      |  |      | 235,000 |   |  |   | 195,000   |  
|Weighted average interest rate during the year                          |  |      | 3.76      | %    |  |      | 6.30    | % |  |   | 4.91      | %
|Other Short-Term Borrowings                                             |  |      |           |      |  |      |         |   |  |   |           |  
|Balance at year end                                                     |  | $    | 1,774,816 |      |  | $    | 159,512 |   |  | $ | 844,004   |  
|Weighted average interest rate at year end                              |  |      | 2.94      | %    |  |      | 5.76    | % |  |   | 5.95      | %
|Average balance outstanding during the year                             |  | $    | 561,768   |      |  | $    | 511,193 |   |  | $ | 647,544   |  
|Maximum amount outstanding at any month end                             |  |      | 1,774,816 |      |  |      | 803,337 |   |  |   | 1,007,165 |  
|Weighted average interest rate during the year                          |  |      | 4.40      | %    |  |      | 5.98    | % |  |   | 5.48      | %

NOTE L: LONG-TERM DEBT AND BANK NOTES
Long-term debt and bank notes consist of borrowings having an original maturity
of one year or more.

Deposit liabilities have priority over the claims of other unsecured creditors
of the Bank, including the holders of obligations, such as bank notes, in the
event of liquidation.

Original issue discount and deferred issuance costs are amortized over the
terms of the related debt issuances.

The Corporation uses interest rate swap agreements and foreign exchange swap
agreements to change a portion of fixed-rate long-term debt and bank notes to
floating-rate long-term debt and bank notes to better match the rate
sensitivity of the Corporations assets. The Corporation also uses foreign
exchange swap agreements to reduce its foreign currency exchange risk on a
portion of long-term debt and bank notes issued by MBNA Europe.

6 7/8% SENIOR NOTES
These notes are direct, unsecured obligations of the Corporation and are not
subordinated to any other indebtedness of the Corporation. Interest on the
6 7/8% Senior Notes is payable semiannually. These notes may not be redeemed
prior to their stated maturity.

SENIOR MEDIUM-TERM NOTES
These notes are direct, unsecured obligations of the Corporation and are not
subordinated to any other indebtedness of the Corporation. The Corporation had
$355.0 million of Fixed-Rate Senior Medium-Term Notes outstanding at December
31, 2001, with rates ranging from 6.15% to 7.125%. Interest on the Fixed-Rate
Senior Medium-Term Notes is payable semiannually. The Corporation also had
$704.0 million of Floating-Rate Senior Medium-Term Notes outstanding at
December 31, 2001. These Floating-Rate Senior Medium-Term Notes are priced
between 35 basis points and 175 basis points over the three-month London
Interbank Offered Rate (LIBOR). Interest on the Floating-Rate Senior
Medium-Term Notes is payable quarterly. At December 31, 2001, the three-month
LIBOR was 1.88%.

BANK NOTES
The Bank Notes are direct, unconditional, unsecured obligations of the Bank,
and are not subordinated to any other obligations of the Bank. The Bank had
$1.6 billion of Fixed-Rate Bank Notes outstanding at December 31, 2001, with
rates ranging from 6.50% to 7.76%. Interest is payable semiannually. The Bank
also had $887.0 million of Floating-Rate Bank Notes outstanding at December 31,
2001, with rates priced between 23 basis points and 60 basis points over the
three-month LIBOR. Interest is payable quarterly.

BILATERAL CREDIT FACILITY
This facility was a direct, unsecured obligation of MBNA Europe and was not
subordinated to any other obligations of MBNA Europe. At December 31, 2000,
MBNA Europe had a fixed-rate facility totaling £536,000 (approximately
$799,000) outstanding with interest payable monthly. This facility was repaid
in 2001 in accordance with the terms of the facility.



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Summary of Long-Term Debt and Bank Notes
dollars in thousands    |

|                                                                                                                                                                                                                                              |                                                  |                               |           |         |           |   |           |        |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------- | --------- | ------- | --------- | - | --------- | ------ | --------- | 
|December 31,                                                                                                                                                                                                                                  |                                                  | 2001                          |           | 2000   
|                                                                                                                                                                                                                                             
|Parent Company                                                                                                                                                                                                                                |                                                  |                               |           |         |           |   |           |       
|6 7/8% Senior Notes, maturing in 2005                                                                                                                                                                                                         |                                                  | $                             | 99,677    |         |           | $ | 99,586    |       
|Fixed-Rate Senior Medium-Term Notes, with a weighted average interest rate of 6.61% and 6.59%, respectively, maturing
in varying amounts from 2002 through 2004                                                                               |                                                  |                               | 356,828   |         |           |   | 369,207   |       
|Floating-Rate Senior Medium-Term Notes, maturing in varying amounts from 2002 through 2004                                                                                                                                                    |                                                  |                               | 703,339   |         |           |   | 634,314   |       
|                                                                                                                                                                                                                                              |                                                  | Total parent company          |           |         | 1,159,844 |   |           |        | 1,103,107 | 
|Subsidiaries                                                                                                                                                                                                                                  |                                                  |                               |           |         |           |   |           |       
|Fixed-Rate Bank Notes, with a weighted average interest rate of 7.10% and 7.41%, respectively, maturing in varying amounts
from 2002 through 2006                                                                                             |                                                  |                               | 1,702,854 |         |           |   | 1,126,166 |       
|Floating-Rate Bank Notes, maturing in varying amounts from 2002 through 2005                                                                                                                                                                  |                                                  |                               | 885,995   |         |           |   | 1,234,968 |       
|Fixed-Rate Bilateral Credit Facility, with an interest rate of 7.29%, matured in 2001                                                                                                                                                         |                                                  |                               |          |         |           |   | 799       |       
|Fixed-Rate Syndicated Credit Facility, with an interest rate of 7.645%, matured in 2001                                                                                                                                                       |                                                  |                               |          |         |           |   | 111,855   |       
|Fixed-Rate Medium-Term Deposit Notes, with a weighted average interest rate of 6.23% and 6.46%, respectively, maturing
in varying amounts from 2002 through 2008                                                                              |                                                  |                               | 239,873   |         |           |   | 230,040   |       
|Floating-Rate Medium-Term Deposit Notes, maturing in varying amounts from 2002 through 2005                                                                                                                                                   |                                                  |                               | 175,611   |         |           |   | 149,730   |       
|Fixed-Rate Euro Medium-Term Notes, with a weighted average interest rate of .80% on the Japanese yen denominated notes,
maturing in 2002                                                                                                      |                                                  |                               | 41,941    |         |           |   | 47,879    |       
|Fixed-Rate Euro Medium-Term Notes, with a weighted average interest rate of 5.50% on the Euro denominated notes,                                                                                                                              |                                                  |                               |           |         |           |   |           |       
|                                                                                                                                                                                                                                              | maturing in 2004                                 |                               |           | 873,498 |           |   |           |       |          
|Floating-Rate Euro Medium-Term Notes, maturing in varying amounts from 2002 through 2004                                                                                                                                                      |                                                  |                               | 745,264   |         |           |   | 720,419   |       
|7.25% Subordinated Notes, maturing in 2002                                                                                                                                                                                                    |                                                  |                               | 205,820   |         |           |   | 199,387   |       
|6.75% Subordinated Notes, maturing in 2008                                                                                                                                                                                                    |                                                  |                               | 257,969   |         |           |   | 247,893   |       
|Guaranteed Preferred Beneficial Interests in Corporations Junior Subordinated Deferrable Interest Debentures, series A,
with an interest rate of 8.278%, maturing in 2026                                                                    |                                                  |                               | 265,218   |         |           |   | 250,000   |       
|Guaranteed Preferred Beneficial Interests in Corporations Junior Subordinated Deferrable Interest Debentures, series B,
with an interest rate equal to 80 basis points above the three-month London Interbank Offered Rate, maturing in 2027 |                                                  |                               | 277,187   |         |           |   | 277,089   |       
|Guaranteed Preferred Beneficial Interests in Corporations Junior Subordinated Deferrable Interest Debentures, series C,                                                                                                                      |                                                  |                               |           |         |           |   |           |       
|                                                                                                                                                                                                                                              | with an interest rate of 8.25%, maturing in 2027 |                               |           | 35,959  |           |   |           | 36,303 |          
|                                                                                                                                                                                                                                              |                                                  |                               |           |         |           |   |           |       
|                                                                                                                                                                                                                                              |                                                  | Long-term debt and bank notes |           | $       | 6,867,033 |   |           | $      | 5,735,635 | 
|                                                                                                                                                                                                                                              |                                                  |                               |           |         |           |   |           |       

SYNDICATED CREDIT FACILITY
The syndicated credit facility was an unsecured obligation of MBNA Europe and
was not subordinated to any other obligations of MBNA Europe. Interest was
payable quarterly. This facility was repaid in 2001 in accordance with the
terms of the facility.

MEDIUM-TERM DEPOSIT NOTES
These notes are direct, unconditional, unsecured obligations of MBNA Canada and
are not subordinated to any other obligation of MBNA Canada. At December 31,
2001, MBNA Canada had CAD$372.0 million (approximately $233.9 million) of
Fixed-Rate Medium-Term Deposit Notes outstanding, with rates ranging from 4.42%
to 7.26%. Interest is payable semiannually. MBNA Canada also had CAD$280.0
million (approximately $176.1 million)
of Floating-Rate Medium-Term Deposit Notes outstanding at December 31, 2001.
These Floating-Rate Medium-Term Deposit Notes are priced between 55 basis
points and 102 basis points over the ninety-day Bankers Acceptance Rate and are
payable quarterly. The Medium-Term Deposit Notes are unconditionally guaranteed
as to payment of principal and interest by the Bank, and are not redeemable
prior to their stated maturity. At December 31, 2001, the ninety-day Bankers
Acceptance Rate was 2.07%.

EURO MEDIUM-TERM NOTES
The Euro Medium-Term Notes are unsecured obligations of MBNA Europe. These
notes are unconditionally and irrevocably guaranteed in respect to all payments
by the Bank.

At December 31, 2001, MBNA Europe had outstanding JPY5.5 billion (approximately
$41.9 million) and EUR1.0 billion (approximately $881.7 million) of Fixed-Rate
Euro Medium-Term Notes, with interest payable annually.

At December 31, 2001, MBNA Europe also had outstanding Floating-Rate Euro
Medium-Term Notes denominated in various currencies. The Floating-Rate Euro
Medium-Term Notes outstanding at December 31, 2001 were £209.5 million
(approximately $303.6 million), with interest priced between 37.5 basis points
and 80 basis points over the three-month Sterling LIBOR, EUR315.5 million
(approximately $278.2 million), with interest priced between 47 basis points
and 62.5 basis points over the three-month Euro Interbank Offered Rate (EURIBOR),
HKD300.0 million (approximately $38.5 million), with interest priced at 50 basis
points over the three-month Hong Kong Interbank Offered Rate (HIBOR), JPY13.2
billion (approximately $100.5 million), with interest priced between 25 basis
points and 74 basis points over the three-month Japanese LIBOR (JPY LIBOR),
and $15.0 million with interest priced at 75 basis points over the three-month
LIBOR. Interest on these Floating-Rate Euro Medium-Term Notes is payable
quarterly. In addition, MBNA Europe had $10.0 million of Floating-Rate Euro
Medium-Term Notes outstanding at December 31, 2001, with interest priced at 45
basis points over the six-month LIBOR and payable semiannually.

At December 31, 2001, the three-month Sterling LIBOR was 4.11%, the three-month
EURIBOR was 3.30%, the three-month HIBOR was 2.07%, the three-month JPY LIBOR
was .10%, and the six-month LIBOR was 1.98%.



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7.25% SUBORDINATED NOTES
The 7.25% Subordinated Notes are subordinated to the claims of depositors and
other creditors of the Bank, unsecured, and not subject to redemption prior to
maturity. Interest is payable semiannually. The 7.25% Subordinated Notes were
issued by the Bank in 1992 and previously qualified as Tier 2 Capital, which is
included in Total Capital, under the risk-based capital guidelines for both
banks and bank holding companies. The 7.25% subordinated notes no longer
qualify as Tier 2 Capital at December 31, 2001 due to their scheduled maturity
in 2002.

6.75% SUBORDINATED NOTES
The 6.75% Subordinated Notes are subordinated to the claims of depositors and
other creditors of the Bank, unsecured, and not subject to redemption prior to maturity.
Interest is payable semiannually.
The 6.75% Subordinated Notes were issued by the Bank in 1998 and qualify as
Tier 2 Capital, which is included in Total Capital, under the risk-based
capital guidelines for both banks and bank holding companies.

GUARANTEED PREFERRED BENEFICIAL INTERESTS IN CORPORATIONS JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES
The Corporation, through MBNA Capital A, MBNA Capital B, and MBNA Capital C,
each a statutory business trust created under the laws of the State of
Delaware, issued capital securities and common securities: series A, series B,
and series C, respectively. The series capital securities are presented as
guaranteed preferred beneficial interests in Corporations junior subordinated
deferrable interest debentures in the summary of long-term debt and bank
notes. The Corporation is the owner of all the beneficial ownership interests
represented by the common securities of the trusts. The trusts exist for the
sole purpose of issuing the series capital securities and the series common
securities and investing the proceeds in junior subordinated deferrable
interest debentures issued by the Corporation. For financial reporting
purposes, the trusts are treated as wholly owned subsidiaries of the
Corporation and are included in the Corporations consolidated financial
statements.

The junior subordinated deferrable interest debentures are the sole assets of
the trusts, and the payments under the junior subordinated deferrable interest
debentures are the sole revenues of the trusts. Interest on the series capital
securities is payable semiannually or quarterly; however, the Corporation has
the right to defer payment of interest on the junior subordinated deferrable
interest debentures at any time, or from time to time, for a period not
exceeding 10 consecutive semiannual periods or 20 consecutive quarterly periods
depending upon the series. If the payment of interest is deferred on the junior
subordinated deferrable interest debentures, distributions on the series
securities will be deferred and the Corporation also may not be permitted to
declare or pay any cash dividends on the Corporations capital stock or
interest on debt securities that have equal or less priority than the junior
subordinated deferrable interest debentures.

The series capital securities are subject to mandatory redemption, in whole or
in part, upon repayment of the junior subordinated deferrable interest
debentures at their stated maturity or their earlier redemption. The junior
subordinated deferrable interest debentures are redeemable prior to their
stated maturity at the option of the Corporation, on or after the contractually
specified dates, in whole at any time, or in part from time to time, or prior
to the contractually specified dates, in whole only within 90 days following
the occurrence of certain tax or capital treatment events. The contractually
specified early redemption dates for series A, series B, and series C capital
securities are December 1, 2006, February 1, 2007, and January 15, 2002,
respectively. These contractually specified early redemption dates are subject
to the Corporation having received prior approval from the Board of Governors
of the Federal Reserve System. The series capital
securities have a preference with respect to cash distributions and amounts
payable on liquidation or redemption over the series common securities.

The obligations of the Corporation under the relevant junior subordinated
deferrable interest debentures, indenture, trust agreement, and guarantee in
the aggregate constitute a full and unconditional guarantee by the Corporation
of all trust obligations under the series capital securities issued by the
trusts. The junior subordinated deferrable interest debentures are unsecured
and rank junior and are subordinate in right of payment to all senior debt
obligations of the Corporation.

These securities qualify as regulatory capital for the Corporation.

Minimum Annual Maturities of Long-Term Debt and Bank Notes
dollars in thousands    |

|            |  |         |         |                 |  |      |           | 
|----------- |  | ------- | ------- | --------------- |  | ---- | --------- | 
|            |  |         |         |                 |  | MBNA
|            |  | Parent  |         | Corporation and
|(Par Value) |  | Company |         | Subsidiaries   
|           
|2002        |  | $       | 495,000 |                 |  | $    | 1,789,241 | 
|2003        |  |         | 434,000 |                 |  |      | 1,166,539 | 
|2004        |  |         | 130,000 |                 |  |      | 1,563,682 | 
|2005        |  |         | 100,000 |                 |  |      | 787,440   | 
|2006        |  |         |        |                 |  |      | 640,871   | 

---

NOTE M: COMMITMENTS AND CONTINGENCIES
At December 31, 2001, the Corporation had outstanding lines of credit of $560.9
billion committed to its Customers. Of that total commitment, $463.4 billion
was unused. While this amount represents the total available lines of credit to
Customers, the Corporation has not experienced and does not anticipate that all
of its Customers will exercise their entire available line of credit at any
given point in time. The Corporation has the right to reduce or cancel these
available lines of credit at any time.

The Bank, MBNA Europe, and the Corporation arranged a $2.5 billion senior
syndicated revolving credit facility in April 2000. The facility consists of a
senior unsecured $2.5 billion revolving credit facility, committed through
March 2004, available to the Bank and MBNA Europe with sublimit availability in
an amount of $300.0 million for the Corporation. The Bank will unconditionally
and irrevocably guarantee the obligations of MBNA Europe. The facility replaced
the Banks prior $2.0 billion syndicated revolving credit facility.

Advances from the $2.5 billion senior syndicated revolving credit facility are
subject to covenants and conditions customary in a transaction of this kind.
These conditions include requirements



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MBNA Corporation and Subsidiaries

for both the Corporation and the Bank to maintain a minimum level of
consolidated tangible net worth. These conditions also require the Bank to not
permit its managed loan receivables 90 days or more past due plus nonaccruing
receivables to exceed 6% of managed receivables, as defined by the agreement,
and to maintain its regulatory capital ratios at or above regulatory minimum
requirements. In addition, these conditions require that the Corporation not
permit its double leverage ratio (defined as the sum of the Corporations
intangible assets and investment in subsidiaries divided by total stockholders
equity) to exceed 1.25. The facility may be used for general corporate purposes
and was not drawn upon at December 31, 2001. At December 31, 2001, the ratio of
the Banks managed loan receivables 90 days or more past due plus nonaccruing
receivables to managed receivables was 2.38%, the Corporations double leverage
ratio was .96, and the level of consolidated tangible net worth exceeded the
minimum level required.

The Bank has a $750.0 million warehouse facility committed through March 2002.
The Bank may take advances under the facility subject to covenants and
conditions customary in a transaction of this kind. The Bank intends to renew
the warehouse facility through March 2003. This facility may be used for
general corporate purposes and was not drawn upon at December 31, 2001.

MBNA Europe has a £325.0 million (approximately $470.9 million at December 31,
2001) multi-currency syndicated revolving credit facility committed until June
2005. MBNA Europe may take advances under the facility subject to covenants and
conditions customary in a transaction of this kind, including requirements for
tangible net worth and account delinquencies. This facility is unconditionally
and irrevocably guaranteed by the Bank. The facility may be used for general
corporate purposes and was not drawn upon at December 31, 2001.

MBNA Canada has a CAD$350.0 million (approximately $220.1 million at December
31, 2001) multi-currency syndicated revolving credit facility committed through
July 2004 and a CAD$50.0 million (approximately $31.4 million at December 31,
2001) credit facility committed through March 2002. MBNACanada intends to renew
the CAD$50.0 million credit facility. MBNA Canada may take advances under the
facilities subject to covenants and conditions customary in a transaction of
this kind. These facilities are unconditionally and irrevocably guaranteed by
the Bank. These facilities may be used for general corporate purposes and were
not drawn upon at December 31, 2001.

NOTE N: EMPLOYEE BENEFIT PLANS
The Corporation has a noncontributory defined benefit pension plan and a
supplemental executive retirement plan (SERP).

PENSION PLAN
The Corporations noncontributory defined benefit pension plan covers
substantially all people employed by the Corporation in the United States who
meet certain age and service requirements. The benefits are based on years of
service and the persons compensation during the last ten years of employment.
The Corporations funding policy is to have the market value of the plans
assets achieve a target-funded ratio between 100% and 120% on a projected
benefit obligation basis, and only tax-deductible contributions may be made.
Contributions are intended to provide not only for benefits earned to date, but
also for those expected to be earned in the future.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Corporations unfunded SERP plan, established in 1991, provides certain
officers with supplemental retirement benefits in excess of limits imposed on
qualified plans by federal tax law.

The following table illustrates the combined financial information of the two
employee benefit plans.

Benefit Plan Financial Information
dollars in thousands    |

|                                                                        |                                               |                       |          |         |         |   |         |         |         |  
|----------------------------------------------------------------------- | --------------------------------------------- | --------------------- | -------- | ------- | ------- | - | ------- | ------- | ------- | -
|Year Ended December 31,                                                 |                                               | 2001                  |          | 2000   
|                                                                       
|Change in Benefit Obligation                                            |                                               |                       |          |         |         |   |         |        
|Net benefit obligation, beginning of year                               |                                               | $                     | 286,689  |         |         | $ | 210,218 |        
|                                                                        | Service costbenefits earned during
the year  |                       |          | 35,699  |         |   |         | 33,141  |        
|                                                                        | Interest cost on projected benefit obligation |                       |          | 24,690  |         |   |         | 20,777  |        
|                                                                        | Actuarial loss                                |                       |          | 37,377  |         |   |         | 6,991   |        
|                                                                        | Plan amendments                               |                       |          | (2,673  | )       |   |         | 18,416  |        
|                                                                        | Gross benefits paid                           |                       |          | (2,776  | )       |   |         | (2,854  | )      
|                                                                        |                                               |                       |          |         |         |  
|Net benefit obligation, end of year                                     |                                               | $                     | 379,006  |         |         | $ | 286,689 |        
|                                                                        |                                               |                       |          |         |         |  
|Change in Plan Assets                                                   |                                               |                       |          |         |         |   |         |        
|Fair value of plan assets, beginning of year                            |                                               | $                     | 263,500  |         |         | $ | 200,287 |        
|                                                                        | Actual return on plan assets                  |                       |          | (52,373 | )       |   |         | 30,169  |        
|                                                                        | Employer contributions                        |                       |          | 39,109  |         |   |         | 35,898  |        
|                                                                        | Gross benefits paid                           |                       |          | (2,776  | )       |   |         | (2,854  | )      
|                                                                        |                                               |                       |          |         |         |  
|Fair value of plan assets, end of year                                  |                                               | $                     | 247,460  |         |         | $ | 263,500 |        
|                                                                        |                                               |                       |          |         |         |  
|Funded status                                                           |                                               | $                     | (131,546 | )       |         | $ | (23,189 | )      
|Unrecognized net actuarial loss (gain)                                  |                                               |                       | 70,298   |         |         |   | (47,025 | )      
|Unrecognized prior service cost                                         |                                               |                       | 23,345   |         |         |   | 27,127  |        
|Unrecognized net transition obligation                                  |                                               |                       | 2,455    |         |         |   | 2,800   |        
|                                                                        |                                               |                       |          |         |         |  
|                                                                        |                                               | Net amount recognized |          | $       | (35,448 | ) |         | $       | (40,287 | )
|                                                                        |                                               |                       |          |         |         |  
|Amounts Recognized in the ConsolidatedStatements of Financial Condition |                                               |                       |          |         |         |   |         |        
|Prepaid benefit cost                                                    |                                               | $                     | 46,891   |         |         | $ | 24,834  |        
|Accrued benefit cost                                                    |                                               |                       | (82,339  | )       |         |   | (65,121 | )      
|Additional minimum liability                                            |                                               |                       | (20,382  | )       |         |   | (19,369 | )      
|Intangible asset                                                        |                                               |                       | 20,382   |         |         |   | 19,369  |        
|                                                                        |                                               |                       |          |         |         |  
|                                                                        | Net amount recognized                         |                       | $        | (35,448 | )       |   | $       | (40,287 | )      
|                                                                        |                                               |                       |          |         |         |  
|Significant Assumptions Used in theCorporations Defined Benefit Plans  |                                               |                       |          |         |         |   |         |        
|Discount rate                                                           |                                               |                       | 7.50     | %       |         |   | 8.00    | %      
|Rate of compensation increase                                           |                                               |                       | 6.00     |         |         |   | 6.00    |        
|Expected rate of return on plan assets                                  |                                               |                       | 9.50     |         |         |   | 9.50    |        
|                                                                       

The accumulated benefit obligation in excess of the fair value of SERP plan
assets was $102.7 million at December 31, 2001 and $84.5 million at December
31, 2000. There were no plan assets for the SERP plan at December 31, 2001 and
2000.



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MBNA Corporation and Subsidiaries

In 2001, the Corporation decreased the discount rate used to value its
projected benefit obligation for both the pension and SERP plans to 7.50% from
8.00% in 2000 to reflect the current rate environment. In 2000, the Corporation
increased the expected rate of return on plan assets to 9.50% from 9.00% in
1999, to reflect the current rate environment and a change in the Corporations
investment strategy for plan assets.

Components of Net Periodic Benefit Cost
dollars in thousands    |

|                                              |                       |                                        |         |      |        |      |         |   |        |   |         |   |        |  
|--------------------------------------------- | --------------------- | -------------------------------------- | ------- | ---- | ------ | ---- | ------- | - | ------ | - | ------- | - | ------ | -
|Year Ended December 31,                       |                       | 2001                                   |         | 2000 |        | 1999
|                                             
|Service costbenefits earned
during the year  |                       | $                                      | 35,699  |      |        | $    | 33,141  |   |        | $ | 36,481  |  
|Interest cost on projected benefit
obligation |                       |                                        | 24,690  |      |        |      | 20,777  |   |        |   | 16,554  |  
|Expected return on plan assets                |                       |                                        | (25,406 | )    |        |      | (17,961 | ) |        |   | (12,929 | )
|Net amortization and deferral                 |                       |                                        | (677    | )    |        |      | 108     |   |        |   | 1,051   |  
|                                              |                       |                                        |         |      |        |      |         |   |        |   |         |  
|                                              |                       | Net periodic benefit cost              |         | $    | 34,306 |      |         | $ | 36,065 |   |         | $ | 41,157 |  
|                                              |                       |                                        |         |      |        |      |         |   |        |   |         |  
|Assumptions Used to Determine Net             |                       |                                        |         |      |        |      |         |   |        |   |         |  
|                                              | Periodic Benefit Cost |                                        |         |      |        |      |         |   |        |   |         |   |       
|                                              |                       | Discount rate                          |         |      | 8.00   | %    |         |   | 8.00   | % |         |   | 6.75   | %
|                                              |                       | Rate of compensation increase          |         |      | 6.00   |      |         |   | 6.00   |   |         |   | 6.00   |  
|                                              |                       | Expected rate of return
on plan assets |         |      | 9.50   |      |         |   | 9.00   |   |         |   | 9.00   |  

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OTHER PLANS
The Corporations foreign bank subsidiaries each have a pension plan for their
employees. MBNA Europe has a pension plan that covers substantially all of its
people who meet certain age and service requirements. MBNA Europe contributes
6% of an eligible persons base salary in cash. In addition, eligible
participants may contribute up to a maximum of 15% of base salary, with the
first 6% matched at a rate of 50% by MBNA Europe in cash. MBNA Canada has a
registered retirement savings plan that covers substantially all of its people
who meet certain age and service requirements. MBNA Canada contributes 5% of an
eligible persons base salary in cash. In addition, eligible participants may
contribute up to a maximum of 10% of base salary, with the first 6% matched at
a rate of 50% by MBNA Canada in cash. The expenses for these plans are charged
to other operating expense and were not material to the Corporations
consolidated financial statements.

401(K) PLUS SAVINGS PLAN
The MBNA Corporation 401(k) Plus Savings Plan (401(k) Plan) is a defined
contribution plan that is intended to qualify under section 401(k) of the
Internal Revenue Code. The 401(k) Plan covers substantially all people in the
United States who have been employed by the Corporation for one or more years
and have completed at least one thousand hours of service in any one year. For
these people, the Corporation automatically contributes 1% of base salary in
cash. Additionally, eligible participants may make pretax and after-tax
contributions, with contributions up
to 6% of base salary matched 50% by the Corporation in cash. The Corporation
charged $23.1 million, $18.7 million, and $16.5 million in 2001, 2000, and
1999, respectively, to other operating expense for the 401(k) Plan.

POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
The Corporation and its subsidiaries provide certain health care and life
insurance benefits for certain people upon reaching retirement. Initially, a
plan was established for people aged 45 and older with at least ten years of
service at December 31, 1993. The plan was closed to future enrollment
effective December 31, 1998. The plan was extended on January 1, 1999, to
people aged 40 and older with at least five years of service. A person must
meet the requirements for early retirement status to be eligible for these
benefits. The Corporation records the estimated cost of benefits provided to
its former or inactive employees on an accrual basis. The expenses for this
benefit are charged to other operating expense and were not material to the
Corporations consolidated financial statements.

NOTE O: STOCK OPTION PLAN
The Corporations 1997 Long Term Incentive Plan (1997 Plan) and 1991 Long
Term Incentive Plan (1991 Plan) authorize the issuance of shares of common
stock pursuant to incentive and nonqualified stock options and restricted share
awards to officers, directors, key employees, consultants, and advisors of the
Corporation. Currently, all stock options and restricted stock awards are
granted from the 1997 Plan.

The 1997 Plan authorizes, subject to certain exceptions and additional
limitations, grants of stock options and restricted shares for an indefinite
number of shares of common stock, provided that immediately after the grants
the sum of the number of outstanding stock options and restricted shares does
not exceed 10% of fully diluted shares outstanding as defined in the 1997 Plan.
At December 31, 2001, 2000, and 1999, the amount of shares of common stock
available for future grants under the 1997 Plan were 7.4 million shares, 16.1
million shares, and 11.5 million shares, respectively. The maximum number of
restricted stock awards that can be granted in any calendar year is 2.0 million
shares, subject to certain exceptions. The maximum number of stock options that
can be granted to any one participant in any calendar year is 2.25 million.

Stock options are granted with an exercise price that is not less than the fair
market value of the Corporations Common Stock on the date the option is
granted, and none may be exercised more than ten years from the date of grant.
Stock options granted to selected officers and key employees of the
Corporation, other than performance-based common stock options and other
special grants, generally become exercisable for one-fifth of the common shares
subject to the options each year and continue to become exercisable for up to
one-fifth per year until they are completely exercisable after five years.
Stock options granted to nonemployee directors and certain selected officers
are exercisable immediately.

The Corporation granted 4.6 million stock options in 2001, 1.6 million stock
options in 2000, and 2.0 million stock options in 1999 which were immediately
exercisable following the effective date of the grant. During 2001, 2000, and
1999, there were no performance-based common stock options granted. Also, the
Corporation granted 25,000 stock options in 1999 which became exercisable in
January 2002.



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##### 



MBNA Corporation and Subsidiaries

Summary of Stock Option Plans Activity
shares in thousands    |

|                                                               |           |                                        |           |        |           |        |                |       |          |       | 
|-------------------------------------------------------------- | --------- | -------------------------------------- | --------- | ------ | --------- | ------ | -------------- | ----- | -------- | ----- | 
|                                                               |           |                                        |           |        |           |        |                |       | Weighted
|                                                               |           |                                        |           |        | Number    |        | Average       
|                                                               |           |                                        |           |        | of Shares |        | Exercise Price
|                                                               |           |                                        |           |        |           |       
|2001                                                           |           |                                        |           |        |           |        |                |      
|Options outstanding, beginning of year                         |           |                                        | 67,949    |        |           | $      | 14.70          |      
|                                                               | Granted   |                                        |           | 16,083 |           |        |                | 32.11 |         
|                                                               | Exercised |                                        |           | (8,641 | )         |        |                | 9.73  |         
|                                                               | Canceled  |                                        |           | (40    | )         |        |                | 16.84 |         
|                                                               |           |                                        |           |        |           |        |               
|Options outstanding, end of year                               |           |                                        | 75,351    |        |           |        | 18.99          |      
|                                                               |           |                                        |           |        |           |        |                |      
|Options exercisable, end of year                               |           |                                        | 52,593    |        |           |        | 16.23          |      
|                                                               |           |                                        |           |        |           |        |                |      
|Weighted average fair value of options
granted during the year |           | $                                      | 11.26     |        |           |        |                |      
|                                                               |           |                                        |           |        |           |        |                |      
|2000                                                           |           |                                        |           |        |           |        |                |      
|Options outstanding, beginning of year                         |           |                                        | 68,534    |        |           | $      | 13.04          |      
|                                                               |           | Granted                                |           |        | 8,142     |        |                |       | 20.97    |      
|                                                               |           | Exercised                              |           |        | (8,628    | )      |                |       | 7.29     |      
|                                                               |           | Canceled                               |           |        | (99       | )      |                |       | 23.30    |      
|                                                               |           |                                        |           |        |           |        |               
|Options outstanding, end of year                               |           |                                        | 67,949    |        |           |        | 14.70          |      
|                                                               |           |                                        |           |        |           |        |                |      
|Options exercisable, end of year                               |           |                                        | 44,505    |        |           |        |                |      
|                                                               |           |                                        |           |        |           |        |               
|Weighted average fair value of options
granted during the year |           | $                                      | 8.21      |        |           |        |                |      
|                                                               |           |                                        |           |        |           |        |               
|1999                                                           |           |                                        |           |        |           |        |                |      
|                                                               |           | Options outstanding, beginning of year |           |        | 64,422    |        |                | $     | 10.19    |      
|                                                               |           |                                        | Granted   |        |           | 9,936  |                |       |          | 26.81 | 
|                                                               |           |                                        | Exercised |        |           | (5,720 | )              |       |          | 4.88  | 
|                                                               |           |                                        | Canceled  |        |           | (104   | )              |       |          | 15.39 | 
|                                                               |           |                                        |           |        |           |        |               
|Options outstanding, end of year                               |           |                                        | 68,534    |        |           |        | 13.04          |      
|                                                               |           |                                        |           |        |           |        |               
|Options exercisable, end of year                               |           |                                        | 38,547    |        |           |        |                |      
|                                                               |           |                                        |           |        |           |        |               
|Weighted average fair value of options
granted during the year |           | $                                      | 9.85      |        |           |        |                |      
|                                                               |           |                                        |           |        |           |        |               

Restricted common shares were also issued under the 1997 Plan to the
Corporations senior officers for a total of 1.9 million common shares in 2001
and 2.0 million common shares in 2000 and 1999. The restricted common shares
issued had an approximate aggregate market value of $66.9 million, $54.3
million, and $56.6 million at the time of grant for 2001, 2000, and 1999,
respectively. The market value of these restricted shares at the date of grant
is amortized into expense over a period that approximates the restriction
period, generally 10 years. If the restrictions lapse, generally upon death,
disability or retirement, or are released sooner, any remaining unamortized
market value of the restricted shares is immediately expensed. At December 31,
2001 and 2000, the unamortized compensation expense related to the restricted
stock awards was $183.0 million and $146.6 million, respectively.

To the extent stock options are exercised and restricted shares are awarded
from time to time under the Plans, the Board of Directors has approved the
purchase, on the open market or in privately negotiated transactions, of the
number of common shares issued.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation (Interpretation No. 44), which is an interpretation of APB
Opinion No. 25. Interpretation No. 44 clarifies the application of APB Opinion
No. 25 for certain issues. The Corporation adopted Interpretation No. 44 on
July 1, 2000, and the implementation of Interpretation No. 44 did not have a
material impact on the Corporations consolidated financial statements.

Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (Statement No. 123), defines a fair-value-based
method of accounting for an employee stock option or similar equity instrument.
However, it allows an entity to continue to measure compensation cost for those
instruments using the intrinsic-value-based method of accounting prescribed by
APB Opinion No. 25. As permitted by Statement No. 123, the Corporation elected
to retain the intrinsic-value-based method of accounting for employee stock
option grants in accordance with APB Opinion No. 25. Certain additional
disclosures are required by Statement No. 123 about stock-based employee
compensation arrangements regardless of the method used to account for them. In
accordance with Statement No. 123, the Black-Scholes option pricing model is
one technique allowed to determine the fair value of employee stock options.
The model uses different assumptions that can significantly affect the fair
value of the employee stock options. The derived fair value estimates cannot be
substantiated by comparison to independent markets.

Summary of Stock Options Outstanding
shares in thousands    |

|                         |      |                     |    |                                           |       |                                |  |                 |                                |  |  |  |        |        |  |  |           |     |   |      |       |      |  |  |  |  |  |  |  |  |  |        |        |        |   |      |       |      |  |  | 
|------------------------ | ---- | ------------------- | -- | ----------------------------------------- | ----- | ------------------------------ |  | --------------- | ------------------------------ |  |  |  | ------ | ------ |  |  | --------- | --- | - | ---- | ----- | ---- |  |  |  |  |  |  |  |  |  | ------ | ------ | ------ | - | ---- | ----- | ---- |  |  | 
|December 31, 2001        |      | Options Outstanding |    | Options Exercisable                      
|                        
|Range of Exercise Prices |      | Numberof Shares     |    | Weighted
AverageRemainingContractual Life |       | Weighted
AverageExercise Price |  | Numberof Shares | Weighted
AverageExercise Price
|                        
|$                        | 1.00 |                     | to |                                           | $     | 4.99                           |  |                 |                                |  |  |  |        | 10,217 |  |  | 2.3 years |     | $ | 4.52 |       |      |  |  |  |  |  |  |  |  |  | 10,217 |        |        | $ | 4.52 |      
|                         | 5.00 |                     | to |                                           |       | 9.99                           |  |                 |                                |  |  |  |        | 10,355 |  |  |           | 3.9 |   |      |       | 7.27 |  |  |  |  |  |  |  |  |  |        |        | 10,355 |   |      |       | 7.27 | 
|10.00                    |      | to                  |    |                                           | 14.99 |                                |  |                 |                                |  |  |  | 10,203 |        |  |  | 5.3       |     |   |      | 13.13 |      |  |  |  |  |  |  |  |  |  |        | 6,476  |        |   |      | 13.11 |     
|15.00                    |      | to                  |    |                                           | 19.99 |                                |  |                 |                                |  |  |  | 2,043  |        |  |  | 6.1       |     |   |      | 18.25 |      |  |  |  |  |  |  |  |  |  |        | 1,668  |        |   |      | 18.27 |     
|20.00                    |      | to                  |    |                                           | 24.99 |                                |  |                 |                                |  |  |  | 16,890 |        |  |  | 7.2       |     |   |      | 21.58 |      |  |  |  |  |  |  |  |  |  |        | 11,154 |        |   |      | 21.74 |     
|25.00                    |      | to                  |    |                                           | 29.99 |                                |  |                 |                                |  |  |  | 9,023  |        |  |  | 7.4       |     |   |      | 26.70 |      |  |  |  |  |  |  |  |  |  |        | 6,104  |        |   |      | 26.69 |     
|30.00                    |      | to                  |    |                                           | 34.99 |                                |  |                 |                                |  |  |  | 16,555 |        |  |  | 9.3       |     |   |      | 32.03 |      |  |  |  |  |  |  |  |  |  |        | 6,578  |        |   |      | 31.89 |     
|35.00                    |      | to                  |    |                                           | 40.00 |                                |  |                 |                                |  |  |  | 65     |        |  |  | 9.2       |     |   |      | 36.18 |      |  |  |  |  |  |  |  |  |  |        | 41     |        |   |      | 35.99 |     
|                         |      |                     |    |                                           |       |                                |  |                 |                                |  |  |  |        |        |  |  |           |     |   |      |       |      |  |  |  |  |  |  |  |  |  |        |        |        |   |      |       |      |  | 
|                         | 1.00 |                     | to |                                           |       | 40.00                          |  |                 |                                |  |  |  |        | 75,351 |  |  |           |     |   |      |       |      |  |  |  |  |  |  |  |  |  |        |        | 52,593 |   |      |       |      | 
|                         |      |                     |    |                                           |       |                                |  |                 |                                |  |  |  |        |        |  |  |           |     |   |      |       |      |  |  |  |  |  |  |  |  |  |        |        |        |   |      |       |      |  | 
|                        



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MBNA Corporation and Subsidiaries

The Corporation estimated the fair value of each employee stock option grant on
the date of grant. The weighted average assumptions used in the Black-Scholes
option pricing model for grants in 2001, 2000, and 1999, were: dividend yield
of 1.08%, 1.12%, and 1.25%, expected volatility of 34.00%, 34.90%, and 34.39%,
risk-free interest rate of 4.61%, 6.66%, and 5.73%, respectively. The expected
life was 5.4 years for 2001, 2000, and 1999.

If the fair value of employee stock option grants determined in accordance with
Statement No. 123 had been included in other operating expense in 2001, 2000,
and 1999, the Corporations net income, earnings per common share, and earnings
per common shareassuming dilution on a pro forma basis would have been as
presented in the following table. The compensation expense recognized in pro
forma net income for 2001, 2000, and 1999 may not be representative of the
effects on pro forma net income for future years.

Pro Forma Net Income and Earnings Per Common Share
shares in thousands    |

|                           |                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   |           |  |  |   |      |  |      |  |           |  |  |   |           | 
|-------------------------- | ----------------- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | ---- | - | --------- |  |  | - | ---- |  | ---- |  | --------- |  |  | - | --------- | 
|Year Ended December 31,    |                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2001 |   |           |  |  |   | 2000 |  | 1999
|                          
|Net Income                 |                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   |           |  |  |   |      |  |      |  |           |  |  |   |          
|                           | As reported       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      | $ | 1,694,291 |  |  | $ |      |  |      |  | 1,312,532 |  |  | $ | 1,024,423 | 
|                           | Pro
forma         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   | 1,618,967 |  |  |   |      |  |      |  | 1,270,946 |  |  |   | 986,547   | 
|Earnings Per Common Share  |                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   |           |  |  |   |      |  |      |  |           |  |  |   |          
|                           | As reported       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   | 1.97      |  |  |   |      |  |      |  | 1.58      |  |  |   | 1.26      | 
|                           | Pro
forma         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   | 1.88      |  |  |   |      |  |      |  | 1.53      |  |  |   | 1.21      | 
|Earnings Per Common Share |                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   |           |  |  |   |      |  |      |  |           |  |  |   |          
|                           | Assuming Dilution |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   |           |  |  |   |      |  |      |  |           |  |  |   |           | 
|                           | As reported       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   | 1.92      |  |  |   |      |  |      |  | 1.53      |  |  |   | 1.21      | 
|                           | Pro
forma         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |      |   | 1.84      |  |  |   |      |  |      |  | 1.49      |  |  |   | 1.16      | 
|                          

NOTE P: STOCKHOLDERS EQUITY

PREFERRED STOCK
The Corporation is authorized to issue 20.0 million shares of preferred stock
with a par value of $.01 per share. The Corporation had 4.5 million shares of
7 1/2% Cumulative Preferred Stock, Series A, outstanding at December 31, 2001
and 2000. The Corporation also had 4.0 million shares of Adjustable Rate
Cumulative Preferred Stock, Series B, outstanding at December 31, 2001 and
2000. Both of the outstanding series preferred stock have a $25 stated value
per share.

Shares of the series preferred stock are not convertible into any other
securities of the Corporation. The series preferred stock will not be entitled
to the benefits of any sinking fund. All preferred shares rank senior to common
shares both as to dividends and liquidation preference, but have no general
voting rights. In the event that the equivalent of six full quarterly dividend
periods are in arrears, the holders of the outstanding shares of the preferred
stock (voting as a single class) will be entitled to vote for the election of
two additional directors to serve until all dividends in arrears have been paid
in full.

The Board of Directors declared the dividends presented in the Preferred Stock
Dividend Summary below for the Corporations Series A and Series B Preferred
Stock.

Dividends on the Series A Preferred Stock are cumulative from the date of
original issue and are payable quarterly in arrears on January 15, April 15,
July 15, and October 15 of each year. As of January 15, 2001, the shares of the
Series A Preferred Stock are redeemable, in whole or in part, solely at the
option of the Corporation, at a price of $25 per share, plus accrued and unpaid
dividends.

Dividends on the Series B Preferred Stock are cumulative from the date of
original issue and are payable quarterly in arrears
on January 15, April 15, July 15, and October 15 of each year. The dividend
rate for any dividend period will be equal to 99.0% of the highest of the
Treasury Bill Rate, the Ten-Year Constant Maturity Rate, and the Thirty-Year
Constant Maturity Rate, as determined in advance of such dividend period, but
not less than 5.5% per annum or more than 11.5% per annum. The amount of
dividends payable with respect to the Series B Preferred Stock will be adjusted
in the event of certain amendments to the Internal Revenue Code of 1986 (Tax
Code) with respect to the dividends-received deduction. As of October 15,
2001, the shares of the Series B Preferred Stock are redeemable, in whole or in
part, solely at the option of the Corporation, at a price of $25 per share,
plus accrued and unpaid dividends.

The Corporation may, from time to time, acquire series preferred stock in the
open market by tender offer, exchange offer, or otherwise. The Corporations
decision to make such acquisitions is dependent on many factors, including
market conditions in effect at the time of any contemplated acquisition.

Preferred Stock Dividend Summary

|                 |  |                  |  |  |  |          |  |              |                             |   |  |              |        |                             |  |  |  |  |  |  |      |   |  |  |  |  |  |  |        |  |  | 
|---------------- |  | ---------------- |  |  |  | -------- |  | ------------ | --------------------------- | - |  | ------------ | ------ | --------------------------- |  |  |  |  |  |  | ---- | - |  |  |  |  |  |  | ------ |  |  | 
|                 |  |                  |  |  |  | Series A |  | Series B    
|                
|Declaration Date |  | Payment Date     |  |  |  |          |  | DividendRate | Dividend
perPreferred Share |   |  | DividendRate |        | Dividend
perPreferred Share
|                
|January 10, 2002 |  | April 15, 2002   |  |  |  |          |  |              | 7.50                        | % |  | $            | .46875 |                             |  |  |  |  |  |  | 5.50 | % |  |  |  |  |  |  | .34380 | 
|October 11, 2001 |  | January 15, 2002 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.50 |   |  |  |  |  |  |  | .34380 | 
|July 11, 2001    |  | October 15, 2001 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.60 |   |  |  |  |  |  |  | .35020 | 
|April 10, 2001   |  | July 16, 2001    |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.50 |   |  |  |  |  |  |  | .34380 | 
|January 10, 2001 |  | April 16, 2001   |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.64 |   |  |  |  |  |  |  | .35270 | 
|October 10, 2000 |  | January 16, 2001 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.92 |   |  |  |  |  |  |  | .37020 | 
|July 12, 2000    |  | October 16, 2000 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 6.02 |   |  |  |  |  |  |  | .37650 | 
|April 12, 2000   |  | July 17, 2000    |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 6.07 |   |  |  |  |  |  |  | .37960 | 
|January 10, 2000 |  | April 15, 2000   |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 6.40 |   |  |  |  |  |  |  | .39970 | 
|October 7, 1999  |  | January 15, 2000 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 6.01 |   |  |  |  |  |  |  | .37590 | 
|July 13, 1999    |  | October 15, 1999 |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 6.01 |   |  |  |  |  |  |  | .37560 | 
|April 13, 1999   |  | July 15, 1999    |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.55 |   |  |  |  |  |  |  | .34680 | 
|January 15, 1999 |  | April 15, 1999   |  |  |  |          |  |              | 7.50                        |   |  |              | .46875 |                             |  |  |  |  |  |  | 5.50 |   |  |  |  |  |  |  | .34380 | 
|                



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##### 



MBNA Corporation and Subsidiaries

COMMON STOCK
On January 10, 2002, the Corporations Board of Directors declared a quarterly
dividend of $.10 per common share, payable April 1, 2002 to stockholders of
record as of March 15, 2002.

In August 2000, the Corporation issued 50 million shares of common stock. The
Corporation used the net proceeds from this offering, $1.6 billion net of
issuance costs, to complete the acquisition of the consumer and commercial
revolving credit loan portfolio from First Union Corporation in September 2000
and for other general corporate purposes.

In January 1999, the Corporation issued 50 million shares of common stock. The
Corporation used the net proceeds from this offering, $1.2 billion net of
issuance costs, to complete the acquisition of the credit card business of PNC
Bank, N.A. and for other general corporate purposes.

NOTE Q: CAPITAL ADEQUACY
The Corporation is subject to risk-based capital guidelines adopted by the
Federal Reserve Board for bank holding companies. The Bank and MBNA Delaware
are also subject to similar capital requirements adopted by the Office of the
Comptroller of the Currency. Under these requirements, the federal bank
regulatory agencies have established quantitative measures to ensure that
minimum thresholds for Tier 1 Capital, Total Capital, and Leverage ratios are
maintained. Failure to meet these minimum capital requirements can initiate
certain mandatory, and possible additional discretionary, actions by the
federal bank regulators that, if undertaken, could have a direct material
effect on the Corporations, the Banks, and MBNA Delawares consolidated
financial statements. Under the capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Corporation, the Bank, and MBNA
Delaware must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices.

The Corporations, the Banks, and MBNA Delawares capital amounts and
classification are also subject to qualitative judgments by the federal bank
regulators about components, risk weightings, and other factors. At December
31, 2001 and 2000, the Corporations, the Banks, and MBNA Delawares capital
exceeded all minimum regulatory requirements to which they are subject, and the
Bank and MBNA Delaware were well-capitalized as defined under the federal
bank regulatory guidelines. The risk-based capital ratios have been computed in
accordance with regulatory accounting practices.

Capital Adequacydollars in thousands    |

|                                          |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |       |  
|----------------------------------------- | ---------------------------- |  | ------ | --------- | ----------------- |  | ----------------------- | ----- | - |  | - | --------- | ----- |  | ------ |  | ----- |  |  | ---- | - |  | ---------------------- | --------- | - |  |  | ----- | -
|                                          |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  | To Be Well-Capitalized
|                                          |                              |  |        |           | For Capital       |  | Under
Prompt Corrective
|                                          |                              |  | Actual |           | Adequacy
Purposes |  | Action
Provisions      
|                                         
|                                          |                              |  | Amount |           | Ratio             |  | Amount                  |       |   |  |   |           | Ratio |  | Amount |  | Ratio
|                                          |                              |  |       
|December 31, 2001                         |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|Tier 1 Capital (to Risk-Weighted Assets): |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  | $      | 7,818,571 |                   |  |                         | 15.99 | % |  | $ | 1,955,703 |       |  |        |  |       |  |  | 4.00 | % |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 6,077,705 |                   |  |                         | 13.14 |   |  |   | 1,850,421 |       |  |        |  |       |  |  | 4.00 |   |  | $                      | 2,775,631 |   |  |  | 6.00  | %
|                                          | MBNA America (Delaware), N.A |  |        | 299,278   |                   |  |                         | 18.24 |   |  |   | 65,642    |       |  |        |  |       |  |  | 4.00 |   |  |                        | 98,463    |   |  |  | 6.00  |  
|Total Capital (to Risk-Weighted Assets):  |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  |        | 8,783,987 |                   |  |                         | 17.97 |   |  |   | 3,911,406 |       |  |        |  |       |  |  | 8.00 |   |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 6,997,176 |                   |  |                         | 15.13 |   |  |   | 3,700,842 |       |  |        |  |       |  |  | 8.00 |   |  |                        | 4,626,052 |   |  |  | 10.00 |  
|                                          | MBNA America (Delaware), N.A |  |        | 316,337   |                   |  |                         | 19.28 |   |  |   | 131,284   |       |  |        |  |       |  |  | 8.00 |   |  |                        | 164,105   |   |  |  | 10.00 |  
|Tier 1 Capital (to Average Assets):       |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  |        | 7,818,571 |                   |  |                         | 18.12 |   |  |   | 1,725,687 |       |  |        |  |       |  |  | 4.00 |   |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 6,077,705 |                   |  |                         | 15.00 |   |  |   | 1,620,755 |       |  |        |  |       |  |  | 4.00 |   |  |                        | 2,025,944 |   |  |  | 5.00  |  
|                                          | MBNA America (Delaware), N.A |  |        | 299,278   |                   |  |                         | 18.49 |   |  |   | 64,749    |       |  |        |  |       |  |  | 4.00 |   |  |                        | 80,936    |   |  |  | 5.00  |  
|                                         
|December 31, 2000                         |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|Tier 1 Capital (to Risk-Weighted Assets): |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  |        | 6,208,553 |                   |  |                         | 14.98 |   |  |   | 1,657,991 |       |  |        |  |       |  |  | 4.00 |   |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 4,285,929 |                   |  |                         | 10.78 |   |  |   | 1,590,625 |       |  |        |  |       |  |  | 4.00 |   |  |                        | 2,385,937 |   |  |  | 6.00  |  
|                                          | MBNA America (Delaware), N.A |  |        | 258,338   |                   |  |                         | 20.88 |   |  |   | 49,479    |       |  |        |  |       |  |  | 4.00 |   |  |                        | 74,218    |   |  |  | 6.00  |  
|Total Capital (to Risk-Weighted Assets):  |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  |        | 6,882,891 |                   |  |                         | 16.61 |   |  |   | 3,315,982 |       |  |        |  |       |  |  | 8.00 |   |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 4,948,482 |                   |  |                         | 12.44 |   |  |   | 3,181,249 |       |  |        |  |       |  |  | 8.00 |   |  |                        | 3,976,561 |   |  |  | 10.00 |  
|                                          | MBNA America (Delaware), N.A |  |        | 270,123   |                   |  |                         | 21.84 |   |  |   | 98,957    |       |  |        |  |       |  |  | 8.00 |   |  |                        | 123,696   |   |  |  | 10.00 |  
|Tier 1 Capital (to Average Assets):       |                              |  |        |           |                   |  |                         |       |   |  |   |           |       |  |        |  |       |  |  |      |   |  |                        |           |   |  |  |      
|                                          | MBNACorporation              |  |        | 6,208,553 |                   |  |                         | 17.30 |   |  |   | 1,435,683 |       |  |        |  |       |  |  | 4.00 |   |  |                        | (a        | ) |  |  |       |  
|                                          | MBNAAmerica Bank, N.A        |  |        | 4,285,929 |                   |  |                         | 12.79 |   |  |   | 1,340,751 |       |  |        |  |       |  |  | 4.00 |   |  |                        | 1,675,939 |   |  |  | 5.00  |  
|                                          | MBNA America (Delaware), N.A |  |        | 258,338   |                   |  |                         | 62.74 |   |  |   | 16,470    |       |  |        |  |       |  |  | 4.00 |   |  |                        | 20,587    |   |  |  | 5.00  |  
|                                         



---

|(a) |  | Not applicable for bank holding companies.
|--- |  | ------------------------------------------



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Think of Yourself as a
Customer  |  77






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##### 



MBNA Corporation and Subsidiaries

In November 2001, the FFIEC published revised risk-based capital guidelines to
address the treatment of recourse obligations, retained interests and direct
credit substitutes that expose banks and bank holding companies to credit risk.
The revised guidelines treat recourse obligations and direct credit substitutes
more consistently than the agencies current risk-based capital standards, and
introduce a credit ratings-based approach to assigning risk weights within a
securitization. The revised guidelines also impose a dollar-for-dollar
capital charge on retained interests and a concentration limit on the
interest-only strip receivable, a subset of retained interests. The revised
guidelines are effective for all transactions settled on or after January 1,
2002. For transactions entered into before January 1, 2002, the Corporation may
elect early adoption for any provision of the revised guidelines that results
in reduced capital requirements, and may delay adoption until December 31, 2002
for any provision that results in increased capital requirements. The revised
guidelines when adopted will result in increased capital requirements for the
Corporation and the Bank. If the increased capital requirements had been in
effect at December 31, 2001, the Corporation would have remained adequately
capitalized and the Bank would have remained well-capitalized for regulatory
capital purposes. MBNA Delawares regulatory capital ratios would be
unaffected.

Other than the FFIECs revised risk-based capital guidelines, there are no
conditions or events that have occurred since December 31, 2001 that have
changed the Banks or MBNA Delawares regulatory capital classification.

NOTE R: OTHER OPERATING EXPENSE

Other Expense Component of Other Operating Expense
dollars in thousands    |

|                                  |                     |      |         |           |  |      |         |           |  |   |         |           | 
|--------------------------------- | ------------------- | ---- | ------- | --------- |  | ---- | ------- | --------- |  | - | ------- | --------- | 
|Year Ended December 31,           |                     | 2001 |         | 2000      |  | 1999
|                                 
|Purchased services                |                     | $    | 498,809 |           |  | $    | 358,688 |           |  | $ | 312,936 |          
|Advertising                       |                     |      | 268,897 |           |  |      | 224,582 |           |  |   | 211,263 |          
|Collection                        |                     |      | 46,260  |           |  |      | 41,960  |           |  |   | 40,692  |          
|Stationery and supplies           |                     |      | 45,477  |           |  |      | 39,963  |           |  |   | 36,779  |          
|Service bureau                    |                     |      | 63,375  |           |  |      | 55,217  |           |  |   | 46,080  |          
|Postage and delivery              |                     |      | 354,226 |           |  |      | 287,368 |           |  |   | 280,356 |          
|Telephone usage                   |                     |      | 84,900  |           |  |      | 75,785  |           |  |   | 73,552  |          
|Loan receivable fraud losses      |                     |      | 172,366 |           |  |      | 164,027 |           |  |   | 102,604 |          
|Amortization of intangible assets |                     |      | 381,792 |           |  |      | 273,219 |           |  |   | 170,636 |          
|                                  |                     |      |         |           |  |      |         |           |  |   |         |           | 
|Computer software                 |                     |      | 83,230  |           |  |      | 71,052  |           |  |   | 58,987  |          
|Other                             |                     |      | 274,329 |           |  |      | 205,053 |           |  |   | 174,360 |          
|                                  |                     |      |         |           |  |      |         |           |  |   |         |           | 
|                                  | Total other expense |      | $       | 2,273,661 |  |      | $       | 1,796,914 |  |   | $       | 1,508,245 | 
|                                  |                     |      |         |           |  |      |         |           |  |   |         |           | 

NOTE S: COMPREHENSIVE INCOME

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income (Statement No. 130), established standards for the reporting and
disclosure of comprehensive income and its components in the financial
statements. Statement No. 130 requires the impact of foreign currency
translation, unrealized gains or losses on the Corporations investment
securities available-for-sale and other financial instruments, and changes in
certain minimum benefit plan liabilities, to be included in other comprehensive
income. The table below presents the components of other comprehensive income
on a before tax and net of tax basis.

Other Comprehensive Income Components
dollars in thousands |

|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |         |  
|--------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ---- | ------- | ------ | - | ---- | ------- | ------- | - | - | ------- | ------- | -
|Year Ended December 31,                                                                                   |                                                  | 2001 |         | 2000   |   | 1999
|                                                                                                         
|Before Tax                                                                                                |                                                  |      |         |        |   |      |         |         |   |   |         |        
|Foreign currency translation                                                                              |                                                  | $    | (28,984 | )      |   | $    | (42,640 | )       |   | $ | (6,738  | )      
|Net unrealized gains (losses) on investment securities available-for-sale
and other financial instruments |                                                  |      | 29,764  |        |   |      | 26,191  |         |   |   | (16,164 | )      
|Minimum benefit plan liability adjustment                                                                 |                                                  |      |        |        |   |      |        |         |   |   | 7,205   |        
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        
|                                                                                                          | Other comprehensive income, before tax           |      | $       | 780    |   |      | $       | (16,449 | ) |   | $       | (15,697 | )
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        
|Applicable Income Tax (Benefit)                                                                           |                                                  |      |         |        |   |      |         |         |   |   |         |        
|Foreign currency translation                                                                              |                                                  | $    |        |        |   | $    |        |         |   | $ |        |        
|Net unrealized gains (losses) on investment securities available-for-sale
and other financial instruments |                                                  |      | 10,689  |        |   |      | 9,515   |         |   |   | (5,760  | )      
|Minimum benefit plan liability adjustment                                                                 |                                                  |      |        |        |   |      |        |         |   |   | 2,630   |        
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        
|                                                                                                          | Other comprehensive income tax expense (benefit) |      | $       | 10,689 |   |      | $       | 9,515   |   |   | $       | (3,130  | )
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        
|Net of Tax                                                                                                |                                                  |      |         |        |   |      |         |         |   |   |         |        
|Foreign currency translation                                                                              |                                                  | $    | (28,984 | )      |   | $    | (42,640 | )       |   | $ | (6,738  | )      
|Net unrealized gains (losses) on investment securities available-for-sale
and other financial instruments |                                                  |      | 19,075  |        |   |      | 16,676  |         |   |   | (10,404 | )      
|Minimum benefit plan liability adjustment                                                                 |                                                  |      |        |        |   |      |        |         |   |   | 4,575   |        
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        
|                                                                                                          | Other comprehensive income, net of tax           |      | $       | (9,909 | ) |      | $       | (25,964 | ) |   | $       | (12,567 | )
|                                                                                                          |                                                  |      |         |        |   |      |         |         |   |   |         |        



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78  |  Think of Yourself as a Customer






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##### 



MBNA CORPORATION AND SUBSIDIARIES

NOTE T: INCOME TAXES

Reconciliation of Statutory Income Taxesdollars in thousands |

|                                    |                                |                             |           |           |           |      |           |         |         |   |           |         |         |   | 
|----------------------------------- | ------------------------------ | --------------------------- | --------- | --------- | --------- | ---- | --------- | ------- | ------- | - | --------- | ------- | ------- | - | 
|Year Ended December 31,             |                                | 2001                        |           | 2000      |           | 1999
|                                   
|Income before income taxes          |                                | $                           | 2,715,210 |           |           | $    | 2,120,407 |         |         | $ | 1,654,964 |        
|Statutory tax rate                  |                                |                             | 35        | %         |           |      | 35        | %       |         |   | 35        | %      
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|Income tax at statutory
tax rate    |                                |                             | 950,324   |           |           |      | 742,142   |         |         |   | 579,237   |        
|State taxes, net of
federal benefit |                                |                             | 30,321    |           |           |      | 19,569    |         |         |   | 20,449    |        
|Other                               |                                |                             | 40,274    |           |           |      | 46,164    |         |         |   | 30,855    |        
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    |                                | Total income taxes          |           | $         | 1,020,919 |      |           | $       | 807,875 |   |           | $       | 630,541 |  
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|Current Income Taxes                |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    | U.S. federal                   |                             | $         | 1,020,232 |           |      | $         | 668,974 |         |   | $         | 572,571 |        
|                                    | U.S. state and local           |                             |           | 46,648    |           |      |           | 30,106  |         |   |           | 31,459  |        
|                                    | Foreign                        |                             |           | 65,306    |           |      |           | 63,988  |         |   |           | 73,115  |        
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    |                                | Total current income taxes  |           |           | 1,132,186 |      |           |         | 763,068 |   |           |         | 677,145 |  
|Deferred Income Taxes               |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    | U.S. federal, state, and local |                             |           | (125,324  | )         |      |           | 47,326  |         |   |           | (48,700 | )      
|                                    | Foreign                        |                             |           | 14,057    |           |      |           | (2,519  | )       |   |           | 2,096   |        
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    |                                | Total deferred income taxes |           |           | (111,267  | )    |           |         | 44,807  |   |           |         | (46,604 | )
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                    |                                | Total income taxes          |           | $         | 1,020,919 |      |           | $       | 807,875 |   |           | $       | 630,541 |  
|                                    |                                |                             |           |           |           |      |           |         |         |   |           |        
|                                   

Foreign subsidiaries contributed approximately 12.2% in 2001, 9.6% in 2000, and
12.9% in 1999 to consolidated income before income taxes. No U.S. income taxes
have been provided on the accumulated undistributed earnings of foreign
subsidiaries, totaling $592.4 million at December 31, 2001, which continue to
be reinvested. It is not practicable to determine the amount of any additional
U.S. income taxes that might be payable in the event that these earnings are
repatriated. The Corporation has foreign tax loss carryforwards, the tax effect
of which is $29.0 million, that begin to expire in 2005. The valuation
allowance at December 31, 2001 and 2000, applies to the foreign tax loss
carryforwards.

Summary of Deferred Taxesdollars in thousands |

|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |          |  
|----------------------------------------- | -------------------------------------------------- |  |  |  |  | ---- | -------- | -------- | - |  |  | ---- |  | - | -------- | -------- | -
|December 31,                              |                                                    |  |  |  |  | 2001 |          |          |   |  |  | 2000
|                                         
|Deferred Tax Assets                       |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|Reserve for possible credit losses        |                                                    |  |  |  |  | $    | 195,508  |          |   |  |  |      |  | $ | 101,512  |         
|Intangible assets and other similar items |                                                    |  |  |  |  |      | 125,436  |          |   |  |  |      |  |   | 87,615   |         
|Foreign tax loss carryforwards            |                                                    |  |  |  |  |      | 29,026   |          |   |  |  |      |  |   | 47,844   |         
|Other deferred tax assets                 |                                                    |  |  |  |  |      | 310,023  |          |   |  |  |      |  |   | 271,988  |         
|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|                                          | Total deferred tax assets                          |  |  |  |  |      |          | 659,993  |   |  |  |      |  |   |          | 508,959  |  
|Valuation allowance                       |                                                    |  |  |  |  |      | (29,026  | )        |   |  |  |      |  |   | (47,844  | )       
|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|                                          | Total deferred tax assets less valuation
allowance |  |  |  |  |      |          | 630,967  |   |  |  |      |  |   |          | 461,115  |  
|Deferred Tax Liabilities                  |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|Securitizations and related items         |                                                    |  |  |  |  |      | (383,500 | )        |   |  |  |      |  |   | (336,058 | )       
|Other deferred tax liabilities            |                                                    |  |  |  |  |      | (100,439 | )        |   |  |  |      |  |   | (78,315  | )       
|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|                                          | Total deferred tax liabilities                     |  |  |  |  |      |          | (483,939 | ) |  |  |      |  |   |          | (414,373 | )
|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|                                          | Net deferred tax assets                            |  |  |  |  |      | $        | 147,028  |   |  |  |      |  |   | $        | 46,742   |  
|                                          |                                                    |  |  |  |  |      |          |          |   |  |  |      |  |   |          |         
|                                         

NOTE U: FOREIGN ACTIVITIES
The Corporations foreign activities are primarily performed through the Banks
two foreign bank subsidiaries, MBNA Europe and MBNA Canada. The Banks net
investment in MBNA Europe was $902.7 million and in MBNA Canada was $190.4
million at December 31, 2001. The Bank also has a foreign branch office which
invests in interest-earning time deposits and accepts eurodollar deposits. This
branch also participates in a portion of the remaining undivided interests in
loan receivables securitized by MBNA Europe.

Foreign Loan Receivables Distributiondollars in thousands |

|                              |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |           |           | 
|----------------------------- | -------------- | ----------------------------------- |  |  |  | ---- | - | --------- | --------- |  |  | ---- |  |  | - | --------- | --------- | 
|December 31,                  |                |                                     |  |  |  | 2001 |   |           |           |  |  | 2000
|                             
|Loans Held for Securitization |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                              | Credit card    |                                     |  |  |  |      | $ | 953,286   |           |  |  |      |  |  | $ | 852,525   |          
|                              |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                              |                | Total loans held for securitization |  |  |  |      |   |           | 953,286   |  |  |      |  |  |   |           | 852,525   | 
|Loan Portfolio                |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                              | Credit card    |                                     |  |  |  |      |   | 1,822,104 |           |  |  |      |  |  |   | 1,185,859 |          
|                              | Other consumer |                                     |  |  |  |      |   | 1,347,843 |           |  |  |      |  |  |   | 1,084,843 |          
|                              |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                              |                | Total loan portfolio                |  |  |  |      |   |           | 3,169,947 |  |  |      |  |  |   |           | 2,270,702 | 
|                              |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                              |                | Total loan receivables              |  |  |  |      |   | $         | 4,123,233 |  |  |      |  |  |   | $         | 3,123,227 | 
|                              |                |                                     |  |  |  |      |   |           |           |  |  |      |  |  |   |          
|                             

Because certain foreign operations are integrated with many of the Banks
domestic operations, certain estimates and assumptions have been made to assign
income and expense items between domestic and foreign operations. Amounts are
allocated for interest costs to users of funds, capital invested, income taxes,
and for other items incurred. The provision for possible credit losses is
allocated based on specific charge-off experience and risk characteristics of
the foreign loan receivables.

Selected Foreign Financial Datadollars in thousands |

|                                  |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|--------------------------------- |  | ---- | ---------- |  |  |  |  | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|December 31,                      |  | 2001 |            |  |  |  |  | 2000 |  | 1999
|                                 
|United Kingdom/Ireland            |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|Total assets                      |  | $    | 5,654,605  |  |  |  |  |      |  | $    | 3,951,404  |   |  | $ | 3,104,940  |  
|Total income                      |  |      | 1,011,309  |  |  |  |  |      |  |      | 786,793    |   |  |   | 713,512    |  
|Income before income taxes        |  |      | 199,221    |  |  |  |  |      |  |      | 164,912    |   |  |   | 213,137    |  
|Net income                        |  |      | 149,786    |  |  |  |  |      |  |      | 121,041    |   |  |   | 148,806    |  
|Other Foreign                     |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|Total assets                      |  |      | 1,884,726  |  |  |  |  |      |  |      | 1,651,315  |   |  |   | 1,706,289  |  
|Total income                      |  |      | 251,774    |  |  |  |  |      |  |      | 191,114    |   |  |   | 179,617    |  
|Income (loss) before
income taxes |  |      | 27,329     |  |  |  |  |      |  |      | (17,914    | ) |  |   | (44,032    | )
|Net income (loss)                 |  |      | 35,890     |  |  |  |  |      |  |      | (14,960    | ) |  |   | (38,815    | )
|Total Foreign                     |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|Total assets                      |  |      | 7,539,331  |  |  |  |  |      |  |      | 5,602,719  |   |  |   | 4,811,229  |  
|Total income                      |  |      | 1,263,083  |  |  |  |  |      |  |      | 977,907    |   |  |   | 893,129    |  
|Income before income taxes        |  |      | 226,550    |  |  |  |  |      |  |      | 146,998    |   |  |   | 169,105    |  
|Net income                        |  |      | 185,676    |  |  |  |  |      |  |      | 106,081    |   |  |   | 109,991    |  
|Domestic                          |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|Total assets                      |  |      | 37,908,614 |  |  |  |  |      |  |      | 33,075,377 |   |  |   | 26,047,903 |  
|Total income                      |  |      | 8,881,638  |  |  |  |  |      |  |      | 7,029,238  |   |  |   | 5,804,663  |  
|Income before income taxes        |  |      | 2,488,660  |  |  |  |  |      |  |      | 1,973,409  |   |  |   | 1,485,859  |  
|Net income                        |  |      | 1,508,615  |  |  |  |  |      |  |      | 1,206,451  |   |  |   | 914,432    |  
|MBNA Corporation                  |  |      |            |  |  |  |  |      |  |      |            |   |  |   |            |  
|Total assets                      |  |      | 45,447,945 |  |  |  |  |      |  |      | 38,678,096 |   |  |   | 30,859,132 |  
|Total income                      |  |      | 10,144,721 |  |  |  |  |      |  |      | 8,007,145  |   |  |   | 6,697,792  |  
|Income before income taxes        |  |      | 2,715,210  |  |  |  |  |      |  |      | 2,120,407  |   |  |   | 1,654,964  |  
|Net income                        |  |      | 1,694,291  |  |  |  |  |      |  |      | 1,312,532  |   |  |   | 1,024,423  |  
|                                 



Think of Yourself as a Customer | 79






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##### 



MBNA CORPORATION AND SUBSIDIARIES

NOTE V: SEGMENT REPORTING
Statement of Financial Accounting Standards No. 131, Disclosures about
Segments of an Enterprise and Related Information (Statement No. 131),
established standards for the disclosure of selected information pertaining to
operating segments of a public company in its interim and annual financial
statements.

The Corporation derives its income primarily from credit card loans, other
consumer loans, and insurance products. The credit card and other consumer loan
products have similar economic characteristics and, therefore, have been
aggregated into one operating segment. The Corporations insurance products
have also been aggregated into the one operating segment due to immateriality.

The Corporation allocates resources on a managed basis, and financial
information provided to management reflects the Corporations results on a
managed basis. Therefore, an adjustment is required to reconcile the managed
financial information to the Corporations reported financial information in
its consolidated financial statements. This adjustment reclassifies
securitization income into interest income, interchange income, credit card and
other fees, insurance income, recoveries, interest paid to investors, credit
losses, and other trust expenses. The managed results also include the impact
of the net incremental change in the interest-only strip receivable.

Segment Reportingdollars in thousands |

|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|-------------------------------------------------------------- |  |  |  |  |  | ---- | ----------- | - |  |  |  | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|Year Ended December 31,                                        |  |  |  |  |  | 2001 |             |   |  |  |  | 2000 |  | 1999
|                                                              
|Managed Income Statements                                      |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Interest income                                                |  |  |  |  |  | $    | 13,073,453  |   |  |  |  |      |  | $    | 11,268,251  |   |  | $ | 9,133,754   |  
|Interest expense                                               |  |  |  |  |  |      | 4,869,311   |   |  |  |  |      |  |      | 5,431,142   |   |  |   | 3,945,953   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |  |  |  |  |      | 8,204,142   |   |  |  |  |      |  |      | 5,837,109   |   |  |   | 5,187,801   |  
|Provision for possible credit losses                           |  |  |  |  |  |      | 4,592,629   |   |  |  |  |      |  |      | 3,348,289   |   |  |   | 2,885,149   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |  |  |  |  |      | 3,611,513   |   |  |  |  |      |  |      | 2,488,820   |   |  |   | 2,302,652   |  
|Other operating income                                         |  |  |  |  |  |      | 3,578,528   |   |  |  |  |      |  |      | 3,279,289   |   |  |   | 2,430,020   |  
|Other operating expense                                        |  |  |  |  |  |      | 4,474,831   |   |  |  |  |      |  |      | 3,647,702   |   |  |   | 3,077,708   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |  |  |  |  |      | 2,715,210   |   |  |  |  |      |  |      | 2,120,407   |   |  |   | 1,654,964   |  
|Applicable income taxes                                        |  |  |  |  |  |      | 1,020,919   |   |  |  |  |      |  |      | 807,875     |   |  |   | 630,541     |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net income                                                     |  |  |  |  |  | $    | 1,694,291   |   |  |  |  |      |  | $    | 1,312,532   |   |  | $ | 1,024,423   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Managed Loans                                                  |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|At period end                                                  |  |  |  |  |  | $    | 97,496,051  |   |  |  |  |      |  | $    | 88,790,721  |   |  | $ | 72,255,513  |  
|Average for the period                                         |  |  |  |  |  |      | 90,899,988  |   |  |  |  |      |  |      | 77,444,986  |   |  |   | 64,129,255  |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Securitization Adjustments                                     |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Interest income                                                |  |  |  |  |  | $    | (9,868,351  | ) |  |  |  |      |  | $    | (8,397,892  | ) |  | $ | (6,794,014  | )
|Interest expense                                               |  |  |  |  |  |      | (3,055,246  | ) |  |  |  |      |  |      | (3,739,415  | ) |  |   | (2,617,447  | )
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |  |  |  |  |      | (6,813,105  | ) |  |  |  |      |  |      | (4,658,477  | ) |  |   | (4,176,567  | )
|Provision for possible credit losses                           |  |  |  |  |  |      | (3,452,014  | ) |  |  |  |      |  |      | (2,800,980  | ) |  |   | (2,248,535  | )
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |  |  |  |  |      | (3,361,091  | ) |  |  |  |      |  |      | (1,857,497  | ) |  |   | (1,928,032  | )
|Other operating income                                         |  |  |  |  |  |      | 3,361,091   |   |  |  |  |      |  |      | 1,857,497   |   |  |   | 1,928,032   |  
|Other operating expense                                        |  |  |  |  |  |      |            |   |  |  |  |      |  |      |            |   |  |   |            |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |  |  |  |  |      |            |   |  |  |  |      |  |      |            |   |  |   |            |  
|Applicable income taxes                                        |  |  |  |  |  |      |            |   |  |  |  |      |  |      |            |   |  |   |            |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net income                                                     |  |  |  |  |  | $    |            |   |  |  |  |      |  | $    |            |   |  | $ |            |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Securitized Loans                                              |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|At period end                                                  |  |  |  |  |  | $    | (72,862,487 | ) |  |  |  |      |  | $    | (68,835,884 | ) |  | $ | (54,591,804 | )
|Average for the period                                         |  |  |  |  |  |      | (70,560,600 | ) |  |  |  |      |  |      | (59,726,838 | ) |  |   | (49,706,760 | )
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Consolidated Statements of Income                              |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Interest income                                                |  |  |  |  |  | $    | 3,205,102   |   |  |  |  |      |  | $    | 2,870,359   |   |  | $ | 2,339,740   |  
|Interest expense                                               |  |  |  |  |  |      | 1,814,065   |   |  |  |  |      |  |      | 1,691,727   |   |  |   | 1,328,506   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |  |  |  |  |      | 1,391,037   |   |  |  |  |      |  |      | 1,178,632   |   |  |   | 1,011,234   |  
|Provision for possible credit losses                           |  |  |  |  |  |      | 1,140,615   |   |  |  |  |      |  |      | 547,309     |   |  |   | 636,614     |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |  |  |  |  |      | 250,422     |   |  |  |  |      |  |      | 631,323     |   |  |   | 374,620     |  
|Other operating income                                         |  |  |  |  |  |      | 6,939,619   |   |  |  |  |      |  |      | 5,136,786   |   |  |   | 4,358,052   |  
|Other operating expense                                        |  |  |  |  |  |      | 4,474,831   |   |  |  |  |      |  |      | 3,647,702   |   |  |   | 3,077,708   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |  |  |  |  |      | 2,715,210   |   |  |  |  |      |  |      | 2,120,407   |   |  |   | 1,654,964   |  
|Applicable income taxes                                        |  |  |  |  |  |      | 1,020,919   |   |  |  |  |      |  |      | 807,875     |   |  |   | 630,541     |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Net income                                                     |  |  |  |  |  | $    | 1,694,291   |   |  |  |  |      |  | $    | 1,312,532   |   |  | $ | 1,024,423   |  
|                                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|Loan Receivables                                               |  |  |  |  |  |      |             |   |  |  |  |      |  |      |             |   |  |   |             |  
|At period end                                                  |  |  |  |  |  | $    | 24,633,564  |   |  |  |  |      |  | $    | 19,954,837  |   |  | $ | 17,663,709  |  
|Average for the period                                         |  |  |  |  |  |      | 20,339,388  |   |  |  |  |      |  |      | 17,718,148  |   |  |   | 14,422,495  |  
|                                                              



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##### 



MBNA CORPORATION AND SUBSIDIARIES

NOTE W: FAIR VALUE OF FINANCIAL INSTRUMENTS
The following presents the fair value of financial instruments at December 31,
2001 and 2000, whether or not recognized in the Corporations consolidated
statements of financial condition, for which it is practicable to estimate that
value. In addition, certain financial instruments and all nonfinancial
instruments are excluded in accordance with generally accepted accounting
principles. In cases where quoted market prices are not available, fair values
are estimated using present value or other valuation techniques. These
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. The derived fair value
estimates cannot be substantiated by comparison to independent market values
and, in many cases, could not be realized in an immediate settlement of the
instrument. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Corporation.

FINANCIAL ASSETS

Cash and due from banks are carried at an amount that approximates fair value.

Money market instruments include interest-earning time deposits in other banks
and federal funds sold and securities purchased under resale agreements. As a
result of the short-term nature of these instruments, the carrying amounts
reported in the consolidated statements of financial condition approximate
these assets fair values.

The fair value of investment securities is based on the market value of the
individual investment security without regard to any premium or discount that
may result from concentrations of ownership of a financial instrument, possible
tax ramifications, or estimated transaction costs. Market value for investment
securities is based on quoted market prices or dealer quotes.

The carrying value of loans held for securitization approximates its fair value
due to the short-term nature of these assets.

The carrying value of the Corporations loan portfolio approximates its fair
value. The loan portfolio includes variable-rate loans, with interest rates
that approximate current market rates, and fixed-rate loans, which can be
repriced frequently at market rates.

The valuations of loans held for securitization and the loan
portfolio do not include the value that relates to estimated cash flows from
new loans generated from existing Customers over the remaining life of the loan
receivables or the value of established Customer relationships. Accordingly,
the fair values of loans held for securitization and the loan portfolio do not
represent the underlying value of the Corporations accounts.

Accrued income receivable includes interest and fee income earned but not yet
received from investment securities, money market instruments, loan
receivables, interest rate swap agreements, foreign exchange swap agreements
and insurance products. The carrying amount reported in the consolidated
statements of financial condition approximates the fair value of these assets
due to their relatively short-term nature.

The fair value of accounts receivable from securitization is
determined by a review of each component. The interest-only strip receivable,
cash reserve accounts, and other subordinated retained interests are carried at
amounts that approximate their fair values. The carrying values of the sale of
new loan receivables, accrued interest and fees on securitized loans, accrued
servicing fees, and other accounts receivable from securitization approximate
their fair values due to the short-term nature of these assets.

FINANCIAL LIABILITIES

The fair value of the Corporations deposits is determined by a review of each
component. The fair value of money market deposit accounts, noninterest-bearing
deposits, interest-bearing transaction accounts, and savings accounts is equal
to the amount payable upon demand. The fair value of time deposits is estimated
by discounting the future cash flows of the stated maturities using estimated
rates currently offered for like deposits. The valuation does not include the
benefit that results from the low-cost funding provided by the various deposit
liabilities compared to the cost of borrowing funds in the market.

Short-term borrowings include federal funds purchased and securities sold under
repurchase agreements, short-term deposit notes, structured financings, and
other short-term borrowings. The fair value of short-term borrowings
approximates the carrying value of these instruments based upon their
short-term nature.

Carrying Values and Estimated Fair Values of the Corporations Financial Assets dollars in thousands |

|                                                          |                    |      |            |           |            |   |            |           |            |   |            |           |  |   |            |           | 
|--------------------------------------------------------- | ------------------ | ---- | ---------- | --------- | ---------- | - | ---------- | --------- | ---------- | - | ---------- | --------- |  | - | ---------- | --------- | 
|December 31,                                              |                    | 2001 |            | 2000     
|                                                         
|                                                          |                    |      | Carrying   |           | Estimated  |   | Carrying   |           | Estimated 
|                                                          |                    |      | Value      |           | Fair Value |   | Value      |           | Fair Value
|                                                          |                    |      |           
|Financial Assets                                          |                    |      |            |           |            |   |            |           |            |   |            |           |  |   |            |          
|Cash and due from banks                                   |                    | $    | 962,118    |           |            | $ | 962,118    |           |            | $ | 971,469    |           |  | $ | 971,469    |          
|Money market instruments                                  |                    |      | 3,030,863  |           |            |   | 3,030,863  |           |            |   | 2,205,331  |           |  |   | 2,205,331  |          
|Investment securities:                                    |                    |      |            |           |            |   |            |           |            |   |            |           |  |   |            |          
|                                                          | Available-for-sale |      |            | 3,106,884 |            |   |            | 3,106,884 |            |   |            | 2,666,196 |  |   |            | 2,666,196 | 
|                                                          | Held-to-maturity   |      |            | 439,987   |            |   |            | 426,317   |            |   |            | 384,088   |  |   |            | 368,547   | 
|Loans held for securitization                             |                    |      | 9,929,948  |           |            |   | 9,929,948  |           |            |   | 8,271,933  |           |  |   | 8,271,933  |          
|Loan portfolio, net of reserve for possible credit losses |                    |      | 13,870,193 |           |            |   | 13,870,193 |           |            |   | 11,155,331 |           |  |   | 11,155,331 |          
|Accrued income receivable                                 |                    |      | 369,383    |           |            |   | 369,383    |           |            |   | 305,437    |           |  |   | 305,437    |          
|Accounts receivable from securitization                   |                    |      | 7,495,501  |           |            |   | 7,495,501  |           |            |   | 7,081,572  |           |  |   | 7,081,572  |          
|                                                         



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##### 



MBNA CORPORATION AND SUBSIDIARIES

Carrying Values and Estimated Fair Values of the Corporations Financial Liabilities dollars in thousands |

|                              |  |          |            |            |  |          |            |            |  |   |            |  |  |   |            | 
|----------------------------- |  | -------- | ---------- | ---------- |  | -------- | ---------- | ---------- |  | - | ---------- |  |  | - | ---------- | 
|December 31,                  |  | 2001     |            | 2000      
|                             
|                              |  | Carrying |            | Estimated  |  | Carrying |            | Estimated 
|                              |  | Value    |            | Fair Value |  | Value    |            | Fair Value
|                              |  |         
|Financial Liabilities         |  |          |            |            |  |          |            |            |  |   |            |  |  |   |            | 
|Deposits                      |  | $        | 27,094,745 |            |  | $        | 27,828,000 |            |  | $ | 24,343,595 |  |  | $ | 24,788,000 | 
|Short-term borrowings         |  |          | 1,774,816  |            |  |          | 1,774,816  |            |  |   | 159,512    |  |  |   | 159,512    | 
|Long-term debt and bank notes |  |          | 6,867,033  |            |  |          | 7,001,000  |            |  |   | 5,735,635  |  |  |   | 5,792,000  | 
|Accrued interest payable      |  |          | 226,653    |            |  |          | 226,653    |            |  |   | 237,610    |  |  |   | 237,610    | 
|                             

The fair value of substantially all of the Corporations long-term debt and
bank notes is estimated by discounting the future cash flows of the stated
maturities of the long-term debt and bank notes using estimated rates currently
offered for similar debt obligations. The fair value of the Corporations
guaranteed preferred beneficial interests in Corporations junior subordinated
deferrable interest debentures is based upon its quoted market price.

Accrued interest payable includes interest expensed but not yet paid for
deposits, short-term borrowings, long-term debt and bank notes, interest rate
swap agreements, and foreign exchange swap agreements. The carrying amount
approximates the fair value of these liabilities due to their relatively
short-term nature.

DERIVATIVE FINANCIAL INSTRUMENTS
The Corporation utilizes derivative financial instruments to enhance its
ability to manage interest rate risk and foreign currency exchange rate risk.
Derivative financial instruments do not expose the Corporation to credit risk
equal to the notional amount, however, the Corporation is exposed to credit
risk if the counterparty fails to perform. This credit risk is measured as the
gross unrealized gain on the financial instrument. In order to minimize the
amount of credit risk, the Corporation only enters into derivative financial
instruments with counterparties who have credit ratings of investment grade as
rated by the major rating agencies. The derivative financial instruments the
Corporation uses are interest rate swap agreements, foreign exchange swap
agreements and forward exchange contracts. The Corporation does not have any
other derivative financial instruments.

The fair value of the Corporations derivative financial instruments is
represented by the estimated unrealized gains or losses as determined by quoted
market prices or dealer quotes. This value generally reflects the estimated
amounts that the Corporation would receive or pay to terminate the instruments
at the reporting date.

The Corporation uses interest rate swap agreements to change fixed-rate funding
sources to floating-rate funding sources to better match the interest rate
sensitivity of the Corporations assets. Interest rate swap agreements are
agreements between counterparties to exchange cash flows based on the
difference between two interest rates, applied to a notional principal amount
for a specific period. Interest rate swap agreements may subject the
Corporation to market risk associated with changes in interest rates, as a
result of the change to floating-rate funding sources, as well as the risk of
default by a counterparty to the agreement.

The Corporations interest rate swap agreements qualify as
fair value hedges under Statement No. 133. The fair value
of the Corporations interest rate swap agreements was a gross unrealized gain
of $100.7 million and a gross unrealized loss of $9.2 million at December 31,
2001. At December 31, 2000, the outstanding interest rate swap agreements had a
gross unrealized gain of $44.3 million. There were no unrealized losses on the
Corporations interest rate swap agreements at December 31, 2000. For the year
ended December 31, 2001, the Corporations hedging ineffectiveness for its
interest rate swap agreements was immaterial to the Corporations consolidated
statement of income. At December 31, 2001, the Corporation had interest rate
swap agreements maturing in varying amounts from 2002 through 2027.

Under the terms of certain interest rate swap agreements, each party may be
required to pledge certain assets if the market value of the interest rate swap
agreement exceeds an amount set forth in the agreement or in the event of a
change in its credit rating. There were no securities pledged under the terms
of the interest rate swap agreements at December 31, 2001 and 2000. The
Corporation is holding a $21.0 million deposit received from a swap
counterparty, which is collateralizing an interest rate swap agreement at
December 31, 2001.

Summary of Activity of Derivative Financial Instruments (Notional Amounts) dollars in thousands |

|                           |  |                 |           |                  |  |                  |            |       |  |   |           |   |  |   |            |  
|-------------------------- |  | --------------- | --------- | ---------------- |  | ---------------- | ---------- | ----- |  | - | --------- | - |  | - | ---------- | -
|                           |  | Interest Rate   |           | Forward Exchange |  | Foreign Exchange |            |       |  |  
|                           |  | Swap Agreements |           | Contracts        |  | Swap Agreements  |            | Total
|                          
|Balance, December 31, 1998 |  | $               | 655,000   |                  |  | $                | 857,131    |       |  | $ | 40,000    |   |  | $ | 1,552,131  |  
|Additions                  |  |                 | 536,303   |                  |  |                  | 3,410,572  |       |  |   | 160,675   |   |  |   | 4,107,550  |  
|Maturities                 |  |                 | (150,000  | )                |  |                  | (3,226,982 | )     |  |   |          |   |  |   | (3,376,982 | )
|                           |  |                 |           |                  |  |                  |            |       |  |   |           |   |  |   |            |  
|Balance, December 31, 1999 |  |                 | 1,041,303 |                  |  |                  | 1,040,721  |       |  |   | 200,675   |   |  |   | 2,282,699  |  
|Additions                  |  |                 | 713,523   |                  |  |                  | 5,787,563  |       |  |   | 290,783   |   |  |   | 6,791,869  |  
|Maturities                 |  |                 |          |                  |  |                  | (5,507,100 | )     |  |   | (40,000   | ) |  |   | (5,547,100 | )
|                           |  |                 |           |                  |  |                  |            |       |  |   |           |   |  |   |            |  
|Balance, December 31, 2000 |  |                 | 1,754,826 |                  |  |                  | 1,321,184  |       |  |   | 451,458   |   |  |   | 3,527,468  |  
|Additions                  |  |                 | 1,578,547 |                  |  |                  | 9,400,474  |       |  |   | 1,400,671 |   |  |   | 12,379,692 |  
|Maturities                 |  |                 | (450,000  | )                |  |                  | (9,278,535 | )     |  |   |          |   |  |   | (9,728,535 | )
|                           |  |                 |           |                  |  |                  |            |       |  |   |           |   |  |   |            |  
|Balance, December 31, 2001 |  | $               | 2,883,373 |                  |  | $                | 1,443,123  |       |  | $ | 1,852,129 |   |  | $ | 6,178,625  |  
|                           |  |                 |           |                  |  |                  |            |       |  |   |           |   |  |   |            |  
|                          



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##### 



MBNA CORPORATION AND SUBSIDIARIES

The Corporation is exposed to foreign currency exchange rate risk as a result
of transactions in currencies other than the designated functional currency of
its foreign bank subsidiaries. The Corporation uses foreign exchange swap
agreements to reduce its exposure to foreign currency exchange rate risk and to
change a portion of fixed-rate long-term debt and bank notes to floating-rate
long-term debt and bank notes to better match the interest rate sensitivity of
the Corporations assets. The foreign exchange swap agreements are primarily
related to the issuance of long-term debt and bank notes by the Corporations
foreign bank subsidiaries. Foreign exchange swap agreements are agreements to
exchange principal amounts of different currencies and interest rates, usually
at a prevailing exchange rate. When the agreement matures, the underlying
principal or notional amount will be reexchanged at the agreed-upon exchange
rate.

The Corporations qualifying foreign exchange swap agreements are accounted for
as fair value hedges. The fair value of the Corporations qualifying foreign
exchange swap agreements
was a gross unrealized loss of $4.0 million at December 31, 2001. The
Corporation also enters into foreign exchange swap agreements that are not
designated as accounting hedges. The fair value of the Corporations foreign
exchange swap agreements not designated or effective as accounting hedges sp;million and a gross unrealized loss of $57.2
million at December 31, 2001. For the year ended December 31, 2001,
the Corporation recognized a net loss of $52.6 million on its foreign exchange
swap agreements and an offsetting net gain of $72.4 million on the related
underlying long-term debt and bank notes in the consolidated statement of
income. The Corporations hedging ineffectiveness for its foreign exchange swap
agreements was immaterial to the Corporations consolidated statement of income
for 2001. The Corporations foreign exchange swap agreements mature in varying
amounts from 2002 through 2006.

Significant Classes of Derivative Financial Instrumentsdollars in thousands |

|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         |         |    |        | 
|------------------------------------------ | ----------------------- | ----- | --------- | ----- |  | -------- | ---- | ---------------- |  | ------------ | ---- | -------- |  | ---------------- | --- | --------- |  |  | - | ------- | ------- | -- | ------ | 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  | Weighted Average |     |           |  |  |   |         |         |   
|                                          
|                                           |                         |       |           |       |  | Notional |      |                  |  |              |      |          |  | Maturity         |     | Estimated
|                                           |                         |       |           |       |  | Amount   |      | Receive
Rate (a) |  | Pay Rate (b) |      | in
Years |  | Fair
Value      
|                                           |                         |       |           |       |  |         
|December 31, 2001                          |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Interest rate swap agreements              |                         | $     | 2,883,373 |       |  |          | 5.89 | %                |  |              | 2.58 | %        |  |                  | 5.6 |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 100,657 |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (9,167  | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         |       |           | Total |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         |         | $  | 91,490 | 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Forward exchange contractspounds sterling |                         |       | 1,310,626 |       |  |          | 1.44 |                  |  |              | 1.45 |          |  |                  | .1  |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 1,423   |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (9,347  | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         | Total |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | $       | (7,924  | ) 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Forward exchange contractseuros           |                         |       | 54,434    |       |  |          | .90  |                  |  |              | .88  |          |  |                  | .1  |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 1,170   |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        |        
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         |       |           | Total |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         |         | $  | 1,170  | 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Forward exchange contractsU.S. dollars    |                         |       | 78,063    |       |  |          | .69  |                  |  |              | .69  |          |  |                  | .1  |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 56      |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (35     | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         |       | Total     |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         | $       | 21 |       
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Foreign exchange swap agreements           |                         |       | 1,852,129 |       |  |          | 4.11 |                  |  |              | 5.36 |          |  |                  | 2.7 |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 3,897   |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (61,174 | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         | Total |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | $       | (57,277 | ) 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|December 31, 2001                          |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Interest rate swap agreements              |                         |       | 1,754,826 |       |  |          | 6.82 | %                |  |              | 6.70 | %        |  |                  | 7.8 |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 44,314  |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        |        
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         |       |           | Total |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         |         | $  | 44,314 | 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Forward exchange contractspounds sterling |                         |       | 1,298,162 |       |  |          | 1.45 |                  |  |              | 1.49 |          |  |                  | .1  |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 1,546   |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (35,908 | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         | Total |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | $       | (34,362 | ) 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Forward exchange contractseuros           |                         |       | 23,022    |       |  |          | .85  |                  |  |              | .93  |          |  |                  | .1  |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ |        |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (2,366  | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|                                           |                         | Total |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | $       | (2,366  | ) 
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |        
|Foreign exchange swap agreements           |                         |       | 451,458   |       |  |          | 4.61 |                  |  |              | 6.61 |          |  |                  | 2.0 |           |  |  |   |        
|                                           | Gross unrealized gains  |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  | $ | 1,913   |        
|                                           | Gross unrealized losses |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | (7,223  | )      
|                                           |                         |       |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   |         |         |    |        | 
|                                           |                         | Total |           |       |  |          |      |                  |  |              |      |          |  |                  |     |           |  |  |   | $       | (5,310  | ) 
|                                          

|(a) |  | Weighted average receive rate represents the rate contracted at the time
the derivative financial instruments were entered into.                                                                    
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Weighted average pay rate for the forward exchange contracts represents the
spot rate for the currency the forward exchange contract was denominated in at
December 31, 2001 and 2000, respectively.



Think of Yourself as a Customer | 83






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##### 



MBNA CORPORATION AND SUBSIDIARIES

Expected Maturities of Derivative Financial Instrumentsdollars in thousands |

|                                 |                      |               |   |           |   |            |   |               |   |  |   |         |   |       |   |         |  |  |   |  |  |  |  |           |  
|-------------------------------- | -------------------- | ------------- | - | --------- | - | ---------- | - | ------------- | - |  | - | ------- | - | ----- | - | ------- |  |  | - |  |  |  |  | --------- | -
|December 31, 2001                |                      | Within 1 Year |   | 1-5 Years |   | 6-10 Years |   | Over 10 Years |   |  |   |         |   | Total
|                                
|Interest Rate Swap Agreements    |                      |               |   |           |   |            |   |               |   |  |   |         |   |       |   |         |  |  |   |  |  |  |  |          
|                                 | Notional amount      |               | $ | 200,000   |   |            | $ | 2,131,350     |   |  | $ | 265,720 |   |       | $ | 286,303 |  |  | $ |  |  |  |  | 2,883,373 |  
|                                 | Estimated fair value |               |   | 707       |   |            |   | 81,620        |   |  |   | (5,711  | ) |       |   | 14,874  |  |  |   |  |  |  |  | 91,490    |  
|Forward Exchange Contracts       |                      |               |   |           |   |            |   |               |   |  |   |         |   |       |   |         |  |  |   |  |  |  |  |          
|                                 | Notional amount      |               |   | 1,443,123 |   |            |   |              |   |  |   |        |   |       |   |        |  |  |   |  |  |  |  | 1,443,123 |  
|                                 | Estimated fair value |               |   | (6,733    | ) |            |   |              |   |  |   |        |   |       |   |        |  |  |   |  |  |  |  | (6,733    | )
|Foreign Exchange Swap Agreements |                      |               |   |           |   |            |   |               |   |  |   |         |   |       |   |         |  |  |   |  |  |  |  |          
|                                 | Notional amount      |               |   | 120,834   |   |            |   | 1,731,295     |   |  |   |        |   |       |   |        |  |  |   |  |  |  |  | 1,852,129 |  
|                                 | Estimated fair value |               |   | (4,607    | ) |            |   | (52,670       | ) |  |   |        |   |       |   |        |  |  |   |  |  |  |  | (57,277   | )
|                                

The Corporation enters into transactions and has related assets and liabilities
in currencies other than the currency in which the Corporation or its foreign
bank subsidiaries operate. As a result, the Corporation is exposed to foreign
currency exchange rate risk and enters into forward exchange contracts to
reduce its exposure to that risk. Those forward exchange contracts are
commitments to buy or sell foreign currency at a future date for a contracted
price. Those forward exchange contracts may expose the Corporation to varying
degrees of credit and market risk and are subject to the same credit and risk
limitations as the Corporations other financial instruments.

While the forward exchange contracts reduce the exposure to foreign currency
exchange rate movements, the contracts are
not accounting hedges under Statement No. 133. The recognized fair value of the
open forward exchange contracts at December 31, 2001, was a gross unrealized
gain, or an asset, of $2.7 million and a gross unrealized loss, or a liability,
of $9.4 million, which was recognized in the consolidated statement of income
as a net loss of $6.7 million.

The net loss of $6.7 million on the Corporations open foreign exchange
contracts outstanding at December 31, 2001, shown in the table above, along
with the gains on its matured foreign exchange contracts, resulted in a net
gain of $28.3 million on the Corporations forward exchange contracts in the
consolidated statement of income for the year ended December 31, 2001. The
Corporation recognized an offsetting net loss of $40.2 million on the related
foreign denominated assets and liabilities in the consolidated statement of
income. The Corporations forward exchange contracts all mature in 2002.

NOTE X: PARENT COMPANY FINANCIAL INFORMATION
The parent companys investment in subsidiaries represents the total equity of
all consolidated subsidiaries, using the equity method of accounting for
investments. The Corporations principal subsidiary is the Bank which
constituted 91.6% and 92.3% of the consolidated assets of the Corporation at
December 31, 2001 and 2000, respectively.

Condensed Statements of Financial Conditiondollars in thousands |

|                                                                                |          |                                            |           |           |           |   |           |           |           | 
|------------------------------------------------------------------------------- | -------- | ------------------------------------------ | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|December 31,                                                                    |          | 2001                                       |           | 2000     
|                                                                               
|Assets                                                                          |          |                                            |           |           |           |   |           |          
|Cash and due from bank subsidiary                                               |          | $                                          | 3,145     |           |           | $ | 5,569     |          
|Interest-earning time deposits due from bank subsidiary                         |          |                                            | 479,796   |           |           |   | 816,296   |          
|Notes receivable from non-bank subsidiaries                                     |          |                                            | 1,486,887 |           |           |   | 1,310,219 |          
|Investment in subsidiaries:                                                     |          |                                            |           |           |           |   |           |          
|                                                                                | Bank     |                                            |           | 7,228,830 |           |   |           | 5,884,652 |          
|                                                                                | Non-bank |                                            |           | 242,671   |           |   |           | 192,848   |          
|Premises and equipment, net                                                     |          |                                            | 152,385   |           |           |   | 128,558   |          
|Accrued income receivable                                                       |          |                                            | 32,770    |           |           |   | 18,062    |          
|Other assets                                                                    |          |                                            | 216,726   |           |           |   | 174,550   |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total assets                               |           | $         | 9,843,210 |   |           | $         | 8,530,754 | 
|                                                                                |          |                                            |           |           |           |   |           |          
|Liabilities and Stockholders Equity                                            |          |                                            |           |           |           |   |           |          
|Long-term debt                                                                  |          | $                                          | 1,159,844 |           |           | $ | 1,103,107 |          
|Junior subordinated deferrable interest debentures due to non-bank subsidiaries |          |                                            | 595,792   |           |           |   | 580,817   |          
|Accrued interest payable                                                        |          |                                            | 12,164    |           |           |   | 16,839    |          
|Dividends payable                                                               |          |                                            | 79,635    |           |           |   | 71,203    |          
|Accrued expenses and other liabilities                                          |          |                                            | 197,057   |           |           |   | 131,510   |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total liabilities                          |           |           | 2,044,492 |   |           |           | 1,903,476 | 
|Stockholders equity                                                            |          |                                            | 7,798,718 |           |           |   | 6,627,278 |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total liabilities and stockholders equity |           | $         | 9,843,210 |   |           | $         | 8,530,754 | 
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                               



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MBNA CORPORATION AND SUBSIDIARIES

Condensed Statements of Incomedollars in thousands |

|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |         |         | 
|---------------------------------------------------------------------------------------- | -------- | ----------------------- | --------- | --------- | ------- | ---- | --------- | --------- | ------- | - | --------- | ------- | ------- | 
|Year Ended December 31,                                                                  |          | 2001                    |           | 2000      |         | 1999
|                                                                                        
|Operating Income                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|Interest income                                                                          |          | $                       | 121,264   |           |         | $    | 151,450   |           |         | $ | 166,782   |        
|Dividends from subsidiaries:                                                             |          |                         |           |           |         |      |           |           |         |   |           |        
|                                                                                         | Bank     |                         |           | 308,000   |         |      |           | 296,681   |         |   |           | 240,000 |        
|                                                                                         | Non-bank |                         |           | 1,181     |         |      |           | 1,452     |         |   |           | 1,270   |        
|Management fees from subsidiaries                                                        |          |                         | 97,867    |           |         |      | 70,245    |           |         |   | 38,206    |        
|Other                                                                                    |          |                         | 15,044    |           |         |      | 3,128     |           |         |   | 44        |        
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|                                                                                         |          | Total operating income  |           |           | 543,356 |      |           |           | 522,956 |   |           |         | 446,302 | 
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|Operating Expense                                                                        |          |                         |           |           |         |      |           |           |         |   |           |        
|Interest expense                                                                         |          |                         | 90,092    |           |         |      | 133,600   |           |         |   | 160,229   |        
|Salaries and employee benefits                                                           |          |                         | 41,249    |           |         |      | 33,813    |           |         |   | 24,083    |        
|Other                                                                                    |          |                         | 49,652    |           |         |      | 32,019    |           |         |   | 12,553    |        
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|                                                                                         |          | Total operating expense |           |           | 180,993 |      |           |           | 199,432 |   |           |         | 196,865 | 
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|Income before income taxes and equity in undistributed net income (loss) of subsidiaries |          |                         | 362,363   |           |         |      | 323,524   |           |         |   | 249,437   |        
|Applicable income taxes                                                                  |          |                         | 24,694    |           |         |      | 16,380    |           |         |   | 1,575     |        
|Equity in undistributed net income (loss) of subsidiaries:                               |          |                         |           |           |         |      |           |           |         |   |           |        
|                                                                                         | Bank     |                         |           | 1,354,094 |         |      |           | 1,002,055 |         |   |           | 784,731 |        
|                                                                                         | Non-bank |                         |           | 2,528     |         |      |           | 3,333     |         |   |           | (8,170  | )      
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|Net Income                                                                               |          | $                       | 1,694,291 |           |         | $    | 1,312,532 |           |         | $ | 1,024,423 |        
|                                                                                         |          |                         |           |           |         |      |           |           |         |   |           |        
|                                                                                        

Condensed Statements of Cash Flowsdollars in thousands |

|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |          |          |  
|---------------------------------------------------------------------------------- | ------------------------------------------------ | --------------------------------------------------- | --------- | ---------- | -------- | ---- | --------- | ---------- | ---------- | - | --------- | -------- | -------- | -
|Year Ended December 31,                                                            |                                                  | 2001                                                |           | 2000       |          | 1999
|                                                                                  
|Operating Activities                                                               |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Net income                                                                         |                                                  | $                                                   | 1,694,291 |            |          | $    | 1,312,532 |            |            | $ | 1,024,423 |         
|Adjustments to reconcile net income to net cash provided by operating activities:  |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|                                                                                   | Equity in undistributed earnings of subsidiaries |                                                     |           | (1,356,622 | )        |      |           | (1,005,388 | )          |   |           | (776,561 | )       
|                                                                                   | Deferred income tax benefit                      |                                                     |           | (4,658     | )        |      |           | (4,374     | )          |   |           | (4,644   | )       
|                                                                                   | Depreciation and amortization                    |                                                     |           | 42,688     |          |      |           | 32,296     |            |   |           | 19,481   |         
|                                                                                   | Decrease in other operating activities           |                                                     |           | 95,984     |          |      |           | 26,282     |            |   |           | 39,981   |         
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|                                                                                   |                                                  | Net cash provided by operating activities           |           |            | 471,683  |      |           |            | 361,348    |   |           |          | 302,680  |  
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Investing Activities                                                               |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Net decrease (increase) in interest-earning time deposits due from bank subsidiary |                                                  |                                                     | 336,500   |            |          |      | (80,900   | )          |            |   | (568,183  | )       
|Net (issuance) maturity of notes receivable from non-bank subsidiaries             |                                                  |                                                     | (176,668  | )          |          |      | (169,219  | )          |            |   | 446,960   |         
|Net purchases of premises and equipment                                            |                                                  |                                                     | (35,771   | )          |          |      | (49,213   | )          |            |   | (33,626   | )       
|Net investment in subsidiaries                                                     |                                                  |                                                     | (47,285   | )          |          |      | (765,999  | )          |            |   | (321,370  | )       
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|                                                                                   |                                                  | Net cash provided by (used in) investing activities |           |            | 76,776   |      |           |            | (1,065,331 | ) |           |          | (476,219 | )
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Financing Activities                                                               |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Proceeds from issuance of long-term debt                                           |                                                  |                                                     | 294,562   |            |          |      |          |            |            |   |          |         
|Maturity of long-term debt                                                         |                                                  |                                                     | (241,000  | )          |          |      | (367,000  | )          |            |   | (591,000  | )       
|Proceeds from issuance of common stock                                             |                                                  |                                                     |          |            |          |      | 1,599,055 |            |            |   | 1,174,086 |         
|Proceeds from exercise of stock options and other awards                           |                                                  |                                                     | 84,032    |            |          |      | 62,874    |            |            |   | 27,932    |         
|Acquisition and retirement of common stock                                         |                                                  |                                                     | (376,095  | )          |          |      | (323,464  | )          |            |   | (211,337  | )       
|Dividends paid                                                                     |                                                  |                                                     | (312,382  | )          |          |      | (267,250  | )          |            |   | (227,733  | )       
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|                                                                                   |                                                  | Net cash (used in) provided by financing activities |           |            | (550,883 | )    |           |            | 704,215    |   |           |          | 171,948  |  
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|(Decrease) Increase in Cash and Cash Equivalents                                   |                                                  |                                                     | (2,424    | )          |          |      | 232       |            |            |   | (1,591    | )       
|Cash and cash equivalents at beginning of year                                     |                                                  |                                                     | 5,569     |            |          |      | 5,337     |            |            |   | 6,928     |         
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Cash and cash equivalents at end of year                                           |                                                  | $                                                   | 3,145     |            |          | $    | 5,569     |            |            | $ | 5,337     |         
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Supplemental Disclosures                                                           |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Interest expense paid                                                              |                                                  | $                                                   | 95,304    |            |          | $    | 137,141   |            |            | $ | 163,785   |         
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|Income taxes paid                                                                  |                                                  | $                                                   |          |            |          | $    |          |            |            | $ |          |         
|                                                                                   |                                                  |                                                     |           |            |          |      |           |            |            |   |           |         
|                                                                                  

Think of Yourself as a Customer | 85






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##### 



MBNA CORPORATION AND SUBSIDIARIES

Quarterly Data (unaudited)dollars in thousands, except per share amounts |

|                                                                              |  |           |           |          |  |               |           |              |  |   |           |  |  |   |           | 
|----------------------------------------------------------------------------- |  | --------- | --------- | -------- |  | ------------- | --------- | ------------ |  | - | --------- |  |  | - | --------- | 
|Three Months Ended                                                            |  | March 31, |           | June 30, |  | September 30, |           | December 31,
|                                                                             
|2001                                                                          |  |           |           |          |  |               |           |              |  |   |           |  |  |   |           | 
|Interest income                                                               |  | $         | 769,769   |          |  | $             | 793,248   |              |  | $ | 799,218   |  |  | $ | 842,867   | 
|Interest expense                                                              |  |           | 479,021   |          |  |               | 453,591   |              |  |   | 451,333   |  |  |   | 430,120   | 
|Net interest income                                                           |  |           | 290,748   |          |  |               | 339,657   |              |  |   | 347,885   |  |  |   | 412,747   | 
|Provision for possible credit losses                                          |  |           | 218,840   |          |  |               | 322,216   |              |  |   | 314,322   |  |  |   | 285,237   | 
|Other operating income                                                        |  |           | 1,517,729 |          |  |               | 1,640,181 |              |  |   | 1,873,432 |  |  |   | 1,908,277 | 
|Other operating expense                                                       |  |           | 1,091,151 |          |  |               | 1,048,443 |              |  |   | 1,140,421 |  |  |   | 1,194,816 | 
|Income before income taxes                                                    |  |           | 498,486   |          |  |               | 609,179   |              |  |   | 766,574   |  |  |   | 840,971   | 
|Net income                                                                    |  |           | 311,055   |          |  |               | 380,128   |              |  |   | 478,342   |  |  |   | 524,766   | 
|Net income applicable to common stock                                         |  |           | 307,492   |          |  |               | 376,607   |              |  |   | 474,804   |  |  |   | 521,246   | 
|Earnings per common share                                                     |  |           | .36       |          |  |               | .44       |              |  |   | .56       |  |  |   | .61       | 
|Earnings per common shareassuming dilution                                   |  |           | .35       |          |  |               | .43       |              |  |   | .54       |  |  |   | .60       | 
|Weighted average common shares outstanding (000)                              |  |           | 851,840   |          |  |               | 851,853   |              |  |   | 851,812   |  |  |   | 851,815   | 
|Weighted average common shares outstanding and common
stock equivalents (000) |  |           | 878,402   |          |  |               | 877,749   |              |  |   | 875,139   |  |  |   | 873,390   | 
|                                                                              |  |           |           |          |  |               |           |              |  |   |           |  |  |   |           | 
|2000                                                                          |  |           |           |          |  |               |           |              |  |   |           |  |  |   |           | 
|Interest income                                                               |  | $         | 688,672   |          |  | $             | 690,280   |              |  | $ | 733,863   |  |  | $ | 757,544   | 
|Interest expense                                                              |  |           | 383,615   |          |  |               | 399,592   |              |  |   | 433,945   |  |  |   | 474,575   | 
|Net interest income                                                           |  |           | 305,057   |          |  |               | 290,688   |              |  |   | 299,918   |  |  |   | 282,969   | 
|Provision for possible credit losses                                          |  |           | 139,336   |          |  |               | 165,572   |              |  |   | 110,107   |  |  |   | 132,294   | 
|Other operating income                                                        |  |           | 1,128,540 |          |  |               | 1,247,267 |              |  |   | 1,298,090 |  |  |   | 1,462,889 | 
|Other operating expense                                                       |  |           | 915,310   |          |  |               | 911,339   |              |  |   | 892,183   |  |  |   | 928,870   | 
|Income before income taxes                                                    |  |           | 378,951   |          |  |               | 461,044   |              |  |   | 595,718   |  |  |   | 684,694   | 
|Net income                                                                    |  |           | 234,571   |          |  |               | 285,386   |              |  |   | 368,749   |  |  |   | 423,826   | 
|Net income applicable to common stock                                         |  |           | 230,845   |          |  |               | 281,714   |              |  |   | 365,099   |  |  |   | 420,200   | 
|Earnings per common share                                                     |  |           | .29       |          |  |               | .35       |              |  |   | .44       |  |  |   | .49       | 
|Earnings per common shareassuming dilution                                   |  |           | .28       |          |  |               | .34       |              |  |   | .43       |  |  |   | .48       | 
|Weighted average common shares outstanding (000)                              |  |           | 801,849   |          |  |               | 801,821   |              |  |   | 826,310   |  |  |   | 851,819   | 
|Weighted average common shares outstanding and common
stock equivalents (000) |  |           | 824,445   |          |  |               | 826,308   |              |  |   | 854,672   |  |  |   | 880,256   | 
|                                                                             

On April 1, 2001, the Corporation adopted Emerging Issues Task Force Issue
99-20, Recognition of Interest Income and Impairment on Purchased and Retained
Beneficial Interests in Securitized Financial Assets (EITF 99-20). The
Corporation now records accretion of interest income related to beneficial
interests retained in a securitization transaction accounted for as a sale as
interest income in the Corporations consolidated statement of income. This
income was previously recorded as securitization income in the Corporations
consolidated statement of income. For purposes of comparability, certain prior
period amounts previously reported in the Corporations reports filed with the
Securities and Exchange Commission on Form 10-Q and its 2000 Annual Report
filed on Form 10-K have been reclassified. As a result, interest income and
other operating income were adjusted.

In December 2001, the Corporation elected to amend its
securitization agreements to transfer the legal right to recoveries from
charged-off securitized loans from the Corporation to the securitization
transaction cash flows. Previously, the Corporation recognized these recoveries
in the reserve for possible credit losses and the provision for possible credit
losses. The Corporation now includes these recoveries in other operating income
and accounts receivable from securitization. For purposes of comparability,
certain prior period amounts previously reported in the Corporations reports
filed with the Securities and Exchange Commission on Form 10-Q and its 2000
Annual Report filed on Form 10-K have been reclassified. As a result, the
provision for possible credit losses and other operating income were adjusted.



---





---



##### 



MBNA CORPORATION AND SUBSIDIARIES

Preferred Stock Price Range and Dividends (unaudited)

---

|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |        | 
|-------- | -------------- |  | ---- | ----- | --- |  | ----- | --------------- |  |  | - | ----- |  |  | ------------ | ------ | 
|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  | Dividends   
|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  | Declared per
|         |                |  | High |       | Low |  | Close | Preferred Share
|        
|Series A |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |       
|         | 2001           |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |       
|         | Fourth quarter |  | $    | 25.50 |     |  | $     | 25.00           |  |  | $ | 25.25 |  |  | $            | .46875 | 
|         | Third quarter  |  |      | 26.09 |     |  |       | 24.85           |  |  |   | 25.00 |  |  |              | .46875 | 
|         | Second quarter |  |      | 25.90 |     |  |       | 24.20           |  |  |   | 25.40 |  |  |              | .46875 | 
|         | First quarter  |  |      | 24.99 |     |  |       | 23.50           |  |  |   | 24.40 |  |  |              | .46875 | 
|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |             
|         | 2000           |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |        | 
|         | Fourth quarter |  |      | 24.50 |     |  |       | 23.50           |  |  |   | 23.50 |  |  |              | .46875 | 
|         | Third quarter  |  |      | 24.75 |     |  |       | 23.38           |  |  |   | 24.38 |  |  |              | .46875 | 
|         | Second quarter |  |      | 24.75 |     |  |       | 23.25           |  |  |   | 24.75 |  |  |              | .46875 | 
|         | First quarter  |  |      | 25.00 |     |  |       | 23.25           |  |  |   | 24.75 |  |  |              | .46875 | 
|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |             
|Series B |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |       
|         | 2001           |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |        | 
|         | Fourth quarter |  |      | 22.75 |     |  |       | 21.34           |  |  |   | 22.30 |  |  |              | .34380 | 
|         | Third quarter  |  |      | 21.75 |     |  |       | 21.40           |  |  |   | 21.45 |  |  |              | .35020 | 
|         | Second quarter |  |      | 22.56 |     |  |       | 21.75           |  |  |   | 21.75 |  |  |              | .34380 | 
|         | First quarter  |  |      | 22.56 |     |  |       | 22.56           |  |  |   | 22.56 |  |  |              | .35270 | 
|         |                |  |      |       |     |  |       |                 |  |  |   |       |  |  |             
|         | 2000           |  |      |       |     |  |       |                 |  |  |   |       |  |  |              |        | 
|         | Fourth quarter |  |      | 22.56 |     |  |       | 22.25           |  |  |   | 22.56 |  |  |              | .37020 | 
|         | Third quarter  |  |      | 24.00 |     |  |       | 22.25           |  |  |   | 22.25 |  |  |              | .37650 | 
|         | Second quarter |  |      | 24.94 |     |  |       | 21.19           |  |  |   | 24.00 |  |  |              | .37960 | 
|         | First quarter  |  |      | 26.00 |     |  |       | 24.50           |  |  |   | 24.75 |  |  |              | .39970 | 
|        

The Corporation has two series of preferred stock issued and outstanding, both
with a $25 stated value per share. Each series of preferred stock is traded on
the New York Stock Exchange, the Series A Preferred Stock under the symbol
KRBpfa and the Series B Preferred Stock under the symbol KRBpfb.

On January 10, 2002, the Corporations Board of Directors declared a quarterly
dividend of $.46875 per share on the 71/2% Cumulative Preferred Stock, Series
A, and a quarterly dividend of $.3438 per share on the Adjustable Rate Cumulative
Preferred Stock, Series B. Both dividends are payable April 15, 2002 to stockholders
of record as of March 29, 2002.

Common Stock Price Range and Dividends (unaudited)

---

|               |  |      |       |     |  |       |              |  |  |   |       |              |           |   |     | 
|-------------- |  | ---- | ----- | --- |  | ----- | ------------ |  |  | - | ----- | ------------ | --------- | - | --- | 
|               |  |      |       |     |  |       |              |  |  |   |       |              | Dividends |  
|               |  |      |       |     |  |       |              |  |  |   |       | Declared per |          
|               |  | High |       | Low |  | Close | Common Share
|              
|2001           |  |      |       |     |  |       |              |  |  |   |       |              |           |   |     | 
|Fourth quarter |  | $    | 35.53 |     |  | $     | 27.61        |  |  | $ | 35.20 |              |           | $ | .09 | 
|Third quarter  |  |      | 37.35 |     |  |       | 25.05        |  |  |   | 30.29 |              |           |   | .09 | 
|Second quarter |  |      | 38.18 |     |  |       | 31.20        |  |  |   | 33.00 |              |           |   | .09 | 
|First quarter  |  |      | 39.06 |     |  |       | 28.81        |  |  |   | 33.10 |              |           |   | .09 | 
|               |  |      |       |     |  |       |              |  |  |   |       |              |           |   |    
|2000           |  |      |       |     |  |       |              |  |  |   |       |              |           |   |     | 
|Fourth quarter |  |      | 39.38 |     |  |       | 33.00        |  |  |   | 36.94 |              |           |   | .08 | 
|Third quarter  |  |      | 39.81 |     |  |       | 26.88        |  |  |   | 38.50 |              |           |   | .08 | 
|Second quarter |  |      | 29.63 |     |  |       | 22.00        |  |  |   | 27.13 |              |           |   | .08 | 
|First quarter  |  |      | 27.56 |     |  |       | 20.00        |  |  |   | 25.50 |              |           |   | .08 | 
|              

The Corporations Common Stock is traded on the New York Stock Exchange under
the symbol KRB and is listed as MBNA in newspapers. At January 31, 2002,
the Corporation had 2,723 common stockholders of record which does not include
beneficial owners for whom Cede & Co. or others act as nominees.

On January 10, 2002, the Corporations Board of Directors declared a quarterly
dividend of $.10 per common share, payable April 1, 2002 to stockholders of
record as of March 15, 2002.



Think of Yourself as a Customer | 87






---



##### 



|CORPORATION
BOARD OF DIRECTORSAlfred LernerChairman and Chief Executive Officer
MBNA CorporationCharles M. CawleyPresident
MBNA CorporationJames H. Berick, Esq.Partner
Squire, Sanders &
Dempsey L.L.P.Former Chairman
Berick, Pearlman & Mills Co., L.P.A.Benjamin R. Civiletti, Esq.Chairman
Venable, Baetjer and Howard, LLPFormer Attorney General
of the United StatesBernadine P. Healy, M.D.Former President and Chief Executive Officer
American Red CrossFormer Director
National Institutes of HealthWilliam L. JewsPresident and Chief Executive Officer
CareFirst BlueCross BlueShieldChief Executive Officer
Blue Cross Blue Shield of DelawareRandolph D. Lerner, Esq.Partner
Securities Advisors, L.P.Stuart L. Markowitz, M.D.Internist and Managing Partner
Drs. Markowitz, Rosenberg,
Stein & AssociatesClinical Professor
Case Western Reserve University,
College of MedicineMichael Rosenthal, Ph.D.Professor
Columbia UniversityFormer Associate Dean for
Academic Administration
Columbia College | CORPORATION BOARD OF DIRECTORSSTANDING LEFT TO RIGHT:
Randolph D. Lerner, Esq., James H. Berick, Esq., Benjamin R. Civiletti, Esq.,
Charles M. Cawley, Alfred LernerSITTING LEFT TO RIGHT:
William L. Jews, Bernadine P. Healy, M.D., Michael Rosenthal, Ph.D., Stuart L.
Markowitz, M.D.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                 |  |                   |  |                      |  |                   
|-------------------------------- |  | ----------------- |  | -------------------- |  | ------------------
|                                
|BANK EXECUTIVE COMMITTEE        
|                                
|                                
|Charles M. Cawley                |  | Bruce L. Hammonds |  | Alfred Lerner        |  | Lance L. Weaver   
|                                
|John R. Cochran III              |  | M. Scot Kaufman   |  | Richard K. Struthers |  |                   
|                                
|                                
|BANK SENIOR MANAGEMENT COMMITTEE
|                                
|                                
|Gregg Bacchieri                  |  | Louis J. Freeh    |  | Janine D. Marrone    |  | David W. Spartin  
|                                
|Kenneth F. Boehl                 |  | John J. Hewes     |  | Michael G. Rhodes    |  | Penelope J. Taylor
|                                
|Ronald W. Davies                 |  | Charles C. Krulak |  | John W. Scheflen     |  | Vernon H.C. Wright
|                                



---



---



##### 



SUBSIDIARIES OF MBNA CORPORATION
MBNA AMERICA BANK, N.A.

The principal subsidiary of MBNA Corporation, MBNA America, a national bank
with $96.0 billion in managed loans, is the largest independent credit card
lender in the world. It also provides retail deposit, consumer loan, and
insurance products. MBNA America markets its products through thousands of
membership organizations and financial institutions, making it the recognized
industry leader in endorsed marketing.

SUBSIDIARIES OF MBNA AMERICA BANK, N.A.
MBNA.COM

Through a single Web addresswww.MBNA.comCustomers can access their existing
account information, apply for new credit card or consumer loan accounts, shop
for products and services, plan and finance travel, and open certificates of
deposit or money market accounts.

MBNA EUROPE

MBNA issues credit cards in the United Kingdom and the Republic of Ireland.
MBNA Europe is headquartered in Chester, England, with business development
offices in London and in Dublin and
Carrick-on-Shannon, Ireland.

MBNA CANADA

MBNA issues credit cards in Canada. MBNACanada is headquartered in Ottawa,
Ontario, with a business development office in Montreal, Quebec.

MBNA INSURANCE AGENCY, INC.

MBNA Insurance Agency, Inc., markets credit protection, credit-related life and
disability, automobile, and life & health insurance.

MBNA MARKETING SYSTEMS, INC.

MBNA has state-of-the-art telephone sales facilities to support account
acquisition and maintains offices in
Delaware, Florida, Maine, Maryland, New Hampshire, New Jersey, Ohio,
Pennsylvania, and Texas. In addition to credit cards, MBNA Marketing Systems
cross-sells consumer loan, deposit, and insurance products.

MBNA TECHNOLOGY, INC.

MBNA Information Services, Inc., headquartered in Dallas, Texas, provides
information technology support and services to MBNA America Bank, N.A., and its
affiliates.

INDEPENDENT AUDITORS
Ernst & Young LLP

CORPORATE REGISTRARS AND TRANSFER AGENTS
National City Bank (common stock) (800) 622-6757
The Bank of New York (preferred stock) (212) 815-4905

PRINCIPAL FINANCIAL CONTACTS
For further information about MBNA Corporation or its subsidiaries, please contact:

|                          |  |                             
|------------------------- |  | ----------------------------
|David W. Spartin          |  | Brian D. Dalphon            
|Senior Vice Chairman      |  | Director, Investor Relations
|MBNA Corporation          |  | MBNA Corporation            
|Wilmington, DE 19884-0141 |  | Wilmington, DE 19884-0131   
|(800) 362-6255            |  | (800) 362-6255              
|(302) 456-8588            |  | (302) 432-1251              

Internet address: www.MBNA.com

COMMON STOCK
Listed on New York Stock Exchange
Stock Symbol KRB

This annual report was printed on paper recycled from MBNA offices.