---





SUCCESS IS GETTING THE RIGHT CUSTOMERS
AND KEEPING THEM





---

2000 ANNUAL REPORT



---



CONTENTS

|   |  |                                  
|-- |  | ---------------------------------
|2  |  | Ten-Year Highlights              
|  
|  
|  
|  
|3  |  | Financial Highlights             
|  
|  
|  
|  
|4  |  | 2000 Highlights                  
|  
|  
|  
|  
|5  |  | To Our Stockholders              
|  
|  
|  
|  
|6  |  | What We Do                       
|  
|  
|  
|  
|7  |  | Our 10th Year as a Public Company
|  
|  
|  
|  
|10 |  | How We Get the Right Customers   
|  
|  
|  
|  
|12 |  | New Products                     
|  
|  
|  
|  
|15 |  | Asset Quality                    
|  
|  
|  
|  
|16 |  | Think of Yourself as a Customer  
|  
|  
|  
|  
|18 |  | Other Businesses                 
|  
|  
|  
|  
|22 |  | MBNA Foundation                  
|  
|  
|  
|  
|26 |  | MBNA Office Locations            
|  
|  
|  
|  
|27 |  | Financial Contents               
|  
|  
|  
|  
|83 |  | Board of Directors               
|  
|  
|  
|  
|84 |  | Officers                         



Cover photo:

MBNA executives ring the closing bell at the New York Stock Exchange to
celebrate 10 years as a public company. Pictured (left to right) are: Alfred
Lerner,* M. Scot Kaufman,* Richard K. Struthers, Richard A. Grasso (NYSE),
Lance L. Weaver, Diane S. Kedash, Michael G. Rhodes, Penelope J. Taylor, John
R. Cochran III,* Michelle D. Shepherd, Ronald W. Davies,* Charles M. Cawley,*
Bruce L. Hammonds,* Randolph D. Lerner*

*Also present at original listing ceremony in 1991.





---









---



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, and introduced during the summer of 1986,
the precepts above 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 until now not one word had ever been
changed. This year, a new precept about the people of the company has been
added. These precepts are simple and straightforward, and we mean every single
word.





---



TEN-YEAR HIGHLIGHTS

Every great and commanding event in the annals of the world is a triumph of
enthusiasmnothing great was ever achieved without it.

2    THINK OF YOURSELF AS A CUSTOMER



---



FINANCIAL HIGHLIGHTS

|                                                 |                                        |      |   |             |   |      |   |             |   |      |   |            |   |  |   |            |   |  |   |            |  
|------------------------------------------------ | -------------------------------------- | ---- | - | ----------- | - | ---- | - | ----------- | - | ---- | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|Year Ended December 31,                          |                                        | 2000 |   | 1999        |   | 1998 |   | 1997        |   | 1996
|                                                 |                                        |      |   |             |   |      |   |             |   |     
|                                                
|                                                
|                                                
|                                                
|                                                
|(dollars in thousands, except per
share amounts)
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Per Common Share Data for the Year              
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 | Earnings                               |      | $ | 1.58        |   |      | $ | 1.26        |   |      | $ | 1.01       |   |  | $ | .80        |   |  | $ | .61        |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Earnings assuming dilution            |      |   | 1.53        |   |      |   | 1.21        |   |      |   | .97        |   |  |   | .76        |   |  |   | .59        |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Dividends (a)                          |      |   | .32         |   |      |   | .28         |   |      |   | .24        |   |  |   | .21        |   |  |   | .19        |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Book value                             |      |   | 7.53        |   |      |   | 4.97        |   |      |   | 2.90       |   |  |   | 2.34       |   |  |   | 1.87       |  
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Ratios                                          
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 | Return on average total assets         |      |   | 3.94        | % |      |   | 3.62        | % |      |   | 3.38       | % |  |   | 3.25       | % |  |   | 3.26       | %
|                                                
|                                                
|                                                
|                                                
|                                                 | Return on average stockholders equity |      |   | 25.79       |   |      |   | 27.18       |   |      |   | 36.91      |   |  |   | 35.56      |   |  |   | 34.46      |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Stockholders equity to total assets   |      |   | 17.13       |   |      |   | 13.61       |   |      |   | 9.27       |   |  |   | 9.25       |   |  |   | 10.00      |  
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Financial Statement Data for the Year           
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 | Net interest income                    |      | $ | 1,083,952   |   |      | $ | 933,765     |   |      | $ | 742,339    |   |  | $ | 692,390    |   |  | $ | 640,477    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Other operating income                 |      |   | 5,093,174   |   |      |   | 4,207,821   |   |      |   | 3,228,969  |   |  |   | 2,812,879  |   |  |   | 1,895,923  |  
|                                                
|                                                 | Net income                             |      |   | 1,312,532   |   |      |   | 1,024,423   |   |      |   | 776,266    |   |  |   | 622,500    |   |  |   | 474,495    |  
|                                                
|                                                 | Deposits                               |      |   | 24,343,595  |   |      |   | 18,714,753  |   |      |   | 15,407,040 |   |  |   | 12,913,213 |   |  |   | 10,151,686 |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Stockholders equity                   |      |   | 6,627,278   |   |      |   | 4,199,443   |   |      |   | 2,391,035  |   |  |   | 1,970,050  |   |  |   | 1,704,308  |  
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Managed Loan Data                               
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                 | Managed loans at year end              |      | $ | 88,790,721  |   |      | $ | 72,255,513  |   |      | $ | 59,641,106 |   |  | $ | 49,379,860 |   |  | $ | 38,623,533 |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Sales and cash advance volume          |      |   | 125,683,731 |   |      |   | 105,806,935 |   |      |   | 82,968,874 |   |  |   | 66,399,425 |   |  |   | 48,666,129 |  
|                                                



---

|(a) |  | On January 10, 2001, the Board of Directors approved an increase of
12.5% in the quarterly dividend to $.09 per
common share.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------

THINK OF YOURSELF AS A CUSTOMER    3



---



|              |  |                   |  |                 |  |                  
|------------- |  | ----------------- |  | --------------- |  | -----------------
|              |  |                   |  |                 |  |                  
|             
|             
|             
|             
|ALFRED LERNER |  | CHARLES M. CAWLEY |  | JOHN R. COCHRAN |  | BRUCE L. HAMMONDS

The compelling principle on which MBNAs present and future rests is an
unswerving belief that
success is essentially the result of an unrelenting pursuit of Customer
satisfaction.


Attention to Customer satisfaction can become a companys mindset only if all
of its people
live it with passion, persistence, and above all consistency.


Its Customer satisfaction that sets us apart and its Customer satisfaction
that drives our success.
 Its Customer satisfaction that makes our Customers
use our cards first and most often.




---

2000 HIGHLIGHTS



| |  | Continued consistent earnings record, averaging an increase of 25%, in each
of the 40 quarters or 10 years since becoming a public company.                                                                                                                                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Grew managed loans $16.5 billion, or 23% from 1999, to $88.8 billionmore
than two times the industrys overall growth rate.                                                                                                                                                                                                                                                                                              
|
| |  | Added 13.7 million new accounts.                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Acquired endorsements of 459 new groups, including the United States Tennis
Association (USTA), National Audubon Society, Thurgood Marshall Scholarship
Fund, Atlanta Braves, Fraternal Order of Police, Rotary International,
Ameritrade, United Parcel Service, barnesandnoble.com, First Union Corporation,
Ontario Trial Lawyers Association (Canada), America Online (U.K.), and The
Corps of Royal Engineers (U.K.).
|
| |  | Extended exclusive endorsement agreements with more than 700 organizations,
including the University of North Carolina, Major League Baseball, American
Medical Student Association, and The Nature Conservancy.                                                                                                                                                                                                          
|
| |  | Maintained superior credit quality with charge-offs well below published
industry averages.                                                                                                                                                                                                                                                                                                                               
|
| |  | Continued expansion of MBNA International to 5.6 million Customers with $8.8
billion in loan balances, an increase of 23% from 1999. Completed the third
full year of operations in Canada with $1.5 billion in loan balances and 333
group endorsements.                                                                                                                                                                 
|
| |  | Grew Consumer Finance loans to $9.5 billion. Entered into 70 new sales
finance partnerships with high-quality organizations, including Apple Computer;
Fujitsu PC Corporation; Schwinn, Inc.; and Uniglobe Travel, Inc.                                                                                                                                                                                                   
|
| |  | Launched MBNA.com, the hub for all Internet products and services. Enrolled
1.3 million Customers to use MBNA Net Access, MBNAs online banking service.
MBNA ShopSafe and MBNA MarketPlace were introduced providing greater options
for shopping online. Internet marketing efforts generated one million new
Customers in 2000 and MBNA.com now serves more than three million Customers.                              

4    THINK OF YOURSELF AS A CUSTOMER



---



TO OUR STOCKHOLDERS

This report presents MBNAs full-year results for 2000, our 19th year in
business, our 10th as a public company, and our best year yet. Earnings
increased 28% to $1.313 billionbringing to 40 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 $88.8 billion, a
$16.5 billion increase over year-end 1999. This 23% growth rate was more than
two times that of our industry. We also added 13.7 million new accounts. The
characteristics of new cardholders are consistent with the superior quality of
the companys existing Customers. The typical new Customer has a $68,000
average annual household income, has been employed for 11 years, owns a home,
and has a 17-year history of paying bills promptly. Our loan losses continue to
be significantly lower than published industry levels.

MBNA provides a service that enables people to have the things they need
today while paying for them sensibly out of future income. It is a good
business and an enduring one. We provide this service through a credit card and
will continue to do so. We are also expanding our international and consumer
finance businesses.

Everything that happens at MBNA is the direct result of the commitment,
attitude, and dedication of the people who work here. We are very proud of the
people of MBNA and what they have accomplished over the last 19 years10 as a
public company. Were sure you are proud of them too.

We hope you enjoy this report and find it informative.

|                |  |                  
|--------------- |  | -----------------
|                |  |                  
|               
|               
|               
|               
|ALFRED LERNER   |  | CHARLES M. CAWLEY
|               
|               
|               
|               
|               
|               
|               
|               
|               
|                |  |                  
|               
|               
|               
|               
|JOHN R. COCHRAN |  | BRUCE L. HAMMONDS

If it is true that every Company is a portrait of all of its people . . . MBNA is a masterpiece.

THINK OF YOURSELF AS A CUSTOMER    5



---



WHAT WE DO

MBNA Corporation is a holding company comprised of three banks: MBNA
America, a national bank in the United States; MBNA Europe, a fully
chartered bank in the United Kingdom; and MBNA Canada, a fully chartered
bank in Canada. Like other national banks, we take deposits and make
loans. Our deposit business totals $24 billion and our consumer finance
business, which offers Customers access to a variety of loan products,
totals $9.5 billion.

But thats where the similarity to a traditional bank ends. We dont have
a branch network, and we emphasize one businessmaking loans to individuals
through credit cards. We provide a service that frees people from the need to
carry cash and lets them have the things they need today while paying for them
sensibly out of future income.

Credit card lending is a good business for a number
of reasons. There is widespread demand for credit cards, and there are
nearly 200 million people in the United States, the United Kingdom, and Canada
who qualify for them. Further, the market for credit cards continually
refreshes itself as young people reach adulthood.

Done right, credit card lending produces low-risk assets. It is a business
with no concentration of risk. There are no geographic, industry, or Customer
concentrations. Our $89 billion loan portfolio is spread among millions of
active borrowers in the United States, the United Kingdom, and Canada.

The credit card is a product that nearly everyone wants. Although this is
a strength, it also makes credit card lending a business in which success comes
only to those who can differentiate themselves. We do so through the methods we
use to attract new Customers and satisfy them once we have them. In the credit
card business, if youre not good
at both of these things, nothing else matters. MBNA is very good at both.






MBNA Gold
MBNA Quantum
MBNAPlatinum Plus

MBNA is the leader in
innovative new products, from our Gold and
Platinum Pluscredit cards
to the latest : the exclusive Quantum credit card.



|Consistent Profitable Growth    Managed Loans ($ Billions)    Net
Income ($ Millions) |  | 
|------------------------------------------------------------------------------------- |  | 

6    THINK OF YOURSELF AS A CUSTOMER



---






|                                                 |  |                                         
|------------------------------------------------ |  | ----------------------------------------
|MICHELLE SCHWANDTDirector, Customer Satisfaction |  | THOMAS W. BROOKSDirector, Central Region

|                                                                                                                                                                              |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                             
|                                                                                                                                                                              |  | 
|                                                                                                                                                                             
|Over the last 10 years, MBNA has emerged as the worlds leading
independent credit card lender, increasing market share of combined
Visa/MasterCard loans in the U.S. to 15%.
|                                                                                                                                                                             



|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|University of Georgia
The Nature Conservancy | OUR 10TH YEAR AS 
        A PUBLIC COMPANY
         
              During 2000, MBNA recorded its 10th consecutive year of earnings per share
growth, averaging 25%, since its initial public offering in 1991. Net income
grew to $1.3 billion in 2000 from $149.2 million in 1991, an average annual
growth rate of 26%. Managed loans grew a record $16.5 billion to $88.8 billion,
a 23% growth rate that was more than two times the rate of the overall U.S.
credit card industry.
 
              The credit card business remained very competitive in 2000but there is
still plenty of room to grow. Over the past 10 years, weve increased our
market share of combined Visa and MasterCard loans from 5% to 15% in the United
States while solidifying our position as the largest independent credit card
lender in the world. MBNA products are currently being used by more than 51
million people worldwide, compared to seven million during 1991.

(continued)

THINK OF YOURSELF AS A CUSTOMER    7



---



|When it came time to renew our affinity card program, there was no question
that we would extend our partnership with MBNA. They understand sports
marketing, and no one else leverages the power of Major League Baseball like
they do. They are wonderful caretakers of the National Pastime.
MBNAs investment in TMSFs mission to preserve the rich legacy of the
late Justice Thurgood Marshalls commitment to academic excellence in Black
Public Higher Education is the best way to ensure that we continue to have new
leaders for our nation. MBNAs strong commitment to education helps TMSFs 44
member colleges and universities preserve the rich academic environments for
more than 215,000 young men and women. Because of corporate partners such as
MBNA, these young men and women are being prepared as the next generation of
leaders. | PAUL M. BEESTON  (left)President and Chief Operating Officer, Major League BaseballTIMOTHY J. BROSNANExecutive Vice President, Business, Major League Baseball Properties

DWAYNE ASHLEYPresident, Thurgood Marshall Scholarship Fund
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8    THINK OF YOURSELF AS A CUSTOMER



---



(continued from page 7)

OUR 10TH YEAR AS A PUBLIC COMPANY

In 2000, our International and Consumer Finance businesses continued to
grow, as did our Insurance business. In addition, MBNA acquired the
high-quality credit card portfolio of First Union, the nations sixth-largest
bank. Along with acquiring First Unions credit card loans, MBNA markets
personal, business, and corporate credit card products to First Unions 15
million customers under a long-term agreement.

Maintaining the quality of our rapidly growing loan portfolio is
essential. Loan losses have remained well below the averages of typical bank
credit card lenders. Additionally, MBNA Customers remain very loyal. Our
Customers use their cards more often and carry balances 52% higher than the
industry average.

MBNA has produced consistent results in each of its 10 years as a public
company. During that time weve created a marketing franchise with thousands of
endorsements from membership organizations, expanded our regional and
international centers, and invested in new technology and processing systems
dedicated to serving the needs of
our Customers. Most importantly, we continue to make lending decisions one Customer at a time.

Our Customers use us more:

|                        |  |      |       |          |  |   |       | 
|----------------------- |  | ---- | ----- | -------- |  | - | ----- | 
|                        |  | MBNA |       | Industry
|                       
|Average Account Balance |  | $    | 3,519 |          |  | $ | 2,311 | 
|                       
|                       
|                       
|                       
|Average Transaction     |  | $    | 129   |          |  | $ | 99    | 

Customers respond better to a hugging than a mugging.




MBNAs credit card program with L.L.Bean generated more than 300,000 new
Customers in the year 2000. This program alone has 1.6 million Customers and
$1.5 billion in loan balances.

THINK OF YOURSELF AS A CUSTOMER    9



---



HOW WE GET THE RIGHT
CUSTOMERS AND KEEP THEM.

MBNAs
strategic plan can be summarized in nine words: Success is getting the right
Customers and keeping them. In 1982, we began selling our credit card products
to people with a strong common interest by marketing to members of endorsing
groupsknown as affinity marketing. The first organization that endorsed MBNAs
credit cards was the Georgetown University Alumni Association. Nineteen years
later,
we have gone on to receive the endorsement of more than 4,700 other membership
organizations and financial institutions in the United States, the United
Kingdom, and Canada. Our success in affinity marketing has helped create the
marketing franchise that generated 13.7 million new accounts in the year 2000.

MBNAs largest market sector is made up of professional organizations. We
currently have the endorsement of more than 1,400 professional groups,
including 38 state dental, 41 state bar, 38 state
medical, and 49 state nurses associations. This sector alone has generated
nearly $20 billion in loans. Typical professional organizations include
the American College of Surgeons, the American Medical Student
Association, and the National Society of Professional Engineers. Overall, MBNA
credit cards are carried by 67% of all physicians, 47% of all lawyers, 67% of
all dentists, and more than 30% of all nurses, teachers, engineers, and
architects in the United States.

In our sports business, weve received more than
530 endorsements by groups whose members and fans have generated $6.1
billion in loans. Our focus on sports has made MBNAs credit card the official
card of the National Football League, Major League Baseball, the National
Hockey League, NASCAR, the United States Tennis Association, and the
Professional Golfers Association of America. In addition,
76 major league sports franchises from the NBA, NFL, NHL, and MLB endorse
MBNA products.

MBNA is also the official card of more than 600 colleges and universities,
including nine of the Big 10 schools and six of the Pac 10 schools. More than
3.5 million alumni and students from these schools use MBNA products, and have
produced $6.4 billion in loans. Through the colleges and universities sector,
we attract high-quality Customers as they enter the workforce after graduation.

Although MBNA doesnt have branches, our products are sold in more than
12,000 bank offices across the United States and



| |                                           | 
| | ----------------------------------------- | 
| | Columbia University
Penn State University | 



| |                                                                                                                         | 
| | ----------------------------------------------------------------------------------------------------------------------- | 
| | Association of Trial Lawyers of America
National Society of Professional Engineers
American Medical Student Association | 



| |                                                                       | 
| | --------------------------------------------------------------------- | 
| | National Football League
Major League Baseball
National Hockey League | 

10    THINK OF YOURSELF AS A CUSTOMER



---



MARKETING
HIGHLIGHTS



| |  | 17.5 million new Customers    
|- |  | ------------------------------
| 
| |  | 459 new endorsements          
| 
| |  | 4,700 total endorsements      
| 
| |  | $16.5 billion in loan growth  
| 
| |  | $88.8 billion in managed loans

the United Kingdom through the endorsement of hundreds of financial
institutions. MBNA has more than eight million financial institution Customers
with $13 billion in loans. Altogether, MBNA has generated more than $60 billion
in loans from Customers through affinity groups over the last 10 years.

MBNA received the endorsement of 459 new organizations in 2000, including
barnesandnoble.com, United Parcel Service, America Online (U.K.), Ameritrade,
National Audubon Society, Atlanta Braves, First Union, Philadelphia Flyers, and
the United States Tennis Association. These new endorsements strengthen MBNAs
marketing franchise and will be an important source of new accounts for many
years

| |  |                                                                                     
| |  | ------------------------------------------------------------------------------------
| |  | Barnes & Noble
National Audubon Society
United States Tennis Association
First Union

|                                                                                                                                                                                                                                                                                                                      |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                      |  | 
|MBNA generated three million credit card applications at more than 8,000
events in the year 2000, such as sporting events. The MBNA NASCAR credit
card program alone added a record 150,000 new accounts thanks in part to
MBNAs support of Joe Gibbs Racing and driver Bobby Labontethe 2000
Winston Cup Champion.
|                                                                                                                                                                                                                                                                                                                     

C. MICHAEL CAWLEY, M.D.NASCAR Fan

 

JOE GIBBSTeam Owner, Joe Gibbs Racing

 

BOBBY LABONTE2000 Champion, NASCAR Winston Cup Series




THINK OF YOURSELF AS A CUSTOMER    11



---



NEW PRODUCTS AND SERVICES

MBNA.com

MBNA continues to lead in innovation with the
introduction of several new products and services. Centering on our
Internet platform, MBNA launched MBNA.com that now serves more
than three million Customers. Through a single web address, www.MBNA.com,
Customers can access account information, apply
for new loan accounts, shop for additional products and services, plan
and finance travel, and open CD and money market accounts.

More than 1.3 million MBNA Customers enrolled to use the Net Access online
banking service in 2000. Net Access brings the power of the Internet to
Customers and gives them all the services they need to manage their credit card
accounts24 hours a dayfrom their personal computers. This highly secure site
enables Customers to get real-time
information on their accounts, track charges and payments, request address
changes and credit reference letters, review recent statements, pay monthly
bills, and more.

MBNA has also enhanced its e-wallet product to simplify online shopping by
allowing Customers to store credit card and pre-filled shipping information
securely while using a one-click feature to shop
at more than 1,500 Internet merchant sites. To help make our Customers
more confident shopping online, MBNA introduced ShopSafe, an Internet-based
security feature that generates substitute credit card numbers for Customers to
use when making online purchases. The company also introduced MarketPlace, an
online shopping center that enables Customers to browse through thousands of
products and services conveniently, compare prices and features, and read
product reviews.

In 2000, e-commerce spending was nearly twice 1999s level and is expected
to triple over the next two years, as credit cards
continue to be the predominate method of payment on the Web. MBNA
Customers alone spent nearly $3 billion over the Internet in 2000.



| |                                | 
| | ------------------------------ | 
| | Ameritrade
America Online (UK) | 



| |                | 
| | -------------- | 
|
| | MARKET PLACESM | 

Innovative new products and services, such as MBNA ShopSafe and
MarketPlace, provide MBNA Customers with greater online options
and enhanced Customer satisfaction



| |                               | 
| | ----------------------------- | 
| | Image from MBNA.com home page | 

12    THINK OF YOURSELF AS A CUSTOMER



---








|                                                              |  |                                                        
|------------------------------------------------------------- |  | -------------------------------------------------------
|MATTHEW T. TWYMAN, IIIDepartment Manager, Customer Assistance |  | WENDY D. STAUDTDirector, Cleveland Business Development

|                                                                                                                                                                                                     |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                    
|                                                                                                                                                                                                     |  | 
|                                                                                                                                                                                                    
|MBNAs fast-growing Internet presence links us to the Web sites of
more than 1,600 of our endorsing organizations. In 2000, MBNA generated more
than one million new Customers through the Internet.
|                                                                                                                                                                                                    

HIGHLIGHTS



| |  | 3 million Customers served through MBNA.com                                    
|- |  | -------------------------------------------------------------------------------
| 
| |  | 1.3 million Customers enrolled to use Net Access, MBNAs online banking
service
| 
| |  | $3 billion spent by MBNA Customers at Internet merchants                       
| 
| |  | MBNA ShopSafe and MarketPlace introduced                                       
| 
| |  | 1 million Quantum Customers                                                    

| |             
| | ------------
| | MBNA Quantum

Quantum

MBNA also introduced Quantum, an exclusive credit card that meets the
needs of affluent Customers. The translucent credit card features high lines of
credit, distinctive travel benefits, and peerless Customer satisfaction and
resulted in nearly one million Customers. This product has been particularly
appealing to professionals such as physicians, engineers, and teachers.

Complacency is devastating.

THINK OF YOURSELF AS A CUSTOMER    13



---



|After an extensive evaluation,
we selected MBNA because of their strong commitment and ability to provide
service excellence to our
most important assetour banking customers.A colleague once summed up his experience with MBNA quite simply by
saying MBNA consistently
underpromises and overdelivers.
That is exactly the experience we have had with MBNAdedication
to superior service conducted under
the highest professional standards. | RONALD W. EASTBURNChief Executive Officer, SunTrust BankCard, N.A.DEBORAH B. DUBOSEExecutive Director, Clemson Alumni Association
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------

14    THINK OF YOURSELF AS A CUSTOMER



---



ASSET QUALITY

Getting the right Customer begins with effective targeted marketing and ends
with superior underwriting by MBNA credit analysts. One of the many ways MBNA
is different from other credit card issuers: Peoplenot computersdecide
whether or not to approve an account. MBNAs credit analysts review millions of
applications every year. They rely on sophisticated technology and behavioral
scoring systems to assist them in choosing the right Customers and assigning
the right credit lines. However, the most important tools are their experience
and good judgment.

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 25% of the time, the analyst contacts the applicant for additional
information, thus gaining a better understanding of the applicants
circumstances before making a final decision. An automated system would make
the decision without having this additional informationinformation that is
critical in making the right decision.

This personal approach has helped build a superior Customer base. A
typical MBNA credit card Customer has an average household income of $64,000,
owns a home, and has a 16-year history of paying bills on time. Not only do our
Customers look good, they perform well. Our Customers use their cards 52% more
than the average credit card holder does, with typical purchase amounts 30%
higher than the average credit card transaction. The result is higher loan
balances
per Customer and greater revenue for MBNA. In addition, loss rates in 2000
continued to be well below the industry average. The characteristics of our
Customers have remained relatively unchanged over the last 19 years, and this
will continue.

LOAN LOSS COMPARISON





The Ducks Unlimited credit card was launched in 1985 and has generated
more than 190,000 Customers and $320 million in loan balances. Ducks Unlimited
members also have millions of dollars on deposit with MBNA in money market and
CD accounts.

THINK OF YOURSELF AS A CUSTOMER    15



---



Getting the right Customers is only part of the job. MBNA keeps Customers
by treating them well, because the people of MBNA think
of themselves as Customers every minute of every day. We keep Customers by
exceeding their expectations every single time they contact us. Each person who
works here has the opportunity to influence the way Customers feel about the
company. Maintaining high levels of Customer satisfaction has enabled us to
retain consistently our most profitable Customers.

Commitment to Customer
satisfaction is a pervasive and unrelenting attitude. We hire
people who like other people and then give them the tools they need to satisfy
Customers. We develop and manage technology internally to ensure the
reliability and responsiveness of the data processing and telecommunication
systems used to satisfy Customers.

THINK OF YOURSELF AS

|                                                                                                                                                                        |  |                                                                                                                                                                                                                                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                        |  | At MBNA, we strive to attract a diverse, talented
workforce dedicated to satisfying the Customer.
Its an attitude we believe makes good sense from a business
point of view and from a people point of view.                   
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|PENELOPE J. TAYLORVice Chairwoman
Administration                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|At MBNA, weve always been incredibly focused
on providing our Customers with the finest products,
and weve always supported these products with the
finest service. |  |                                                                                                                                                                                                                                   
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                        |  | MICHELLE D. SHEPHERDVice Chairwoman
Product Development                                                                                                                                                                           
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                        |  | What we often call the magic of MBNA is really a reference to the people of MBNA.
People are what make us a leader in both the lending business and the community, and
theyre absolutely essential to our continuing success.
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|GENERAL CHARLES C. KRULAK, USMC (Ret.)Chief Executive Officer
MBNA International                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|MBNAs success at satisfying Customers is a direct
result of the type of people that work at MBNApeople who like
other people.                                       |  |                                                                                                                                                                                                                                   
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                        |  | JANINE D. MARRONEVice Chairwoman
Customer Satisfaction                                                                                                                                                                            
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                        |  | Each individual at MBNA is absolutely fundamental to
satisfying our Customers.                                                                                                                                                  
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|SHANE G. FLYNNChief Executive Officer
MBNA Marketing Systems                                                                                                           

16    THINK OF YOURSELF AS A CUSTOMER



---



|                                                                                                                                                                                   |  |                                                                                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A CUSTOMER                                                                                                                                                                        
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                   |  | There are many things we do at MBNA to keep the right Customers. But the most
important by far is the superior level of service we provide.                                                               
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|JAE W. CHUNGSenior Executive Vice President
Finance                                                                                                                               
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|Since the earliest days of MBNA, the people of
the company have displayed a
commitment to not only
serving Customers but serving the community as well.                          |  |                                                                                                                                                                                                             
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                   |  | JOSEPH A. DE SANTISSenior Executive Vice
President
Marketing                                                                                                                                                
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                   |  | MBNAs success begins with attracting the right
Customerssatisfying them once they become Customers determines our future
success.                                                                       
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|TERRI C. MURPHYVice Chairwoman
Personnel                                                                                                                                          
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|MBNA focuses on satisfying one Customer at a
time, which strengthens our relationship
with individual Customers as well as with the
membership groups that
endorse our products. |  |                                                                                                                                                                                                             
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                   |  | JAMES D. THORNTONSenior Executive Vice President
Quality Assurance                                                                                                                                          
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                   |  | Successful marketing hinges on reaching the right Customers.
We do that very well through a variety of methods, including direct mail,
telesales, direct promotions events, advertising, and the Internet.
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|MICHAEL G. RHODESVice Chairman
Marketing                                                                                                                                          

Our Customer Satisfaction area receives more than 80 million inquiries from
Customers every yearinquiries ranging from requests for credit line increases
and duplicate statements to
questions about card benefits and account balances. Each of these contacts is
an opportunity to demonstrate why MBNA people have consistently been recognized
throughout the industry for providing unparalleled Customer service.

We quantify our success at satisfying Customers through the daily Customer
Satisfaction Test, which tracks service in 12 categories. The results are
posted on boards throughout the company to remind MBNA people that everything
they do affects the Customer. We reward everyone in the company based on the
achievement of
a demanding set of standards.

THINK OF YOURSELF AS A CUSTOMER    17



---



OTHER BUSINESSES

MBNA continues to invest in other products and services.
In 2000, we expanded our international, consumer finance, and consumer
services businesses to better position the company for future growth.

MBNA International

MBNAs international business in the United Kingdom, Ireland, and Canada
reached $8.9 billion, up 23% from $7.2 billion in 1999, with 5.6 million
Customers. Internationally, we employ the same business strategy as in the
United Statesmarketing to people with a strong common interest.

MBNA Europe

MBNA continues to grow in the United Kingdom and Ireland, where we have
built a combined 12% market share. Outstanding loans grew to $7.4 billion with
more than four million Customers. MBNA Europe has earned the endorsements of
825 membership organizations, including more than 50 in Ireland. Examples of
new signings in 2000 include AOL (UK), Association of Teachers and Lecturers,
The Corps
of Royal Engineers, and Gateway. MBNAs European operation now has more
than 2,800 people at four locations in the United Kingdom and Ireland,
including an international call center in Dublin that also actively markets
to people in the United States.

MBNA Canada

MBNA Canada has completed its third full year of
marketing and is producing results similar to those of MBNA Europe
at a comparable point in time. Outstanding loans reached $1.5 billion, 63%
higher than the end of 1999, and MBNA Canada now has 1.5 million Customers.
MBNA Canada signed new endorsements with 87 membership organizations in 2000,
including the University of Alberta, Ontario Trial Lawyers Association, and the
Council for Exceptional Children. In total, 333 organizations endorse MBNA
Canadas products. There are nearly 700 people working for MBNA Canada at its
two locations in Ottawa, Ontario, and Montréal, Québec.



| |  | 
| |  | 



| |                                                                                                            | 
| | ---------------------------------------------------------------------------------------------------------- | 
| | Irish HeritageEmerald
Manchester United
The Corps of Royal Engineers
Royal College of Surgeons in Ireland | 



| |                                                                       | 
| | --------------------------------------------------------------------- | 
| | University of Alberta
Toronto Maple Leafs
Canadian Nurses Association | 

18    THINK OF YOURSELF AS A CUSTOMER



---



HIGHLIGHTS



| |  | $8.9 billion in international outstandings                            
|- |  | ----------------------------------------------------------------------
| 
| |  | 167 new international endorsements, bringing the total to nearly 1,200
| 
| |  | $9.5 billion in Consumer Finance loans                                
| 
| |  | 70 new Sales Finance partnerships                                     
| 
| |  | 2.6 million Customers insured                                         

MBNA Consumer Finance

MBNAs consumer finance business grew $3.3 billion or 52% from 1999, with
loans reaching $9.5 billion. This business had its best acquisition year ever,
adding 1.4 million new accounts, bringing total accounts to more than three
million. Consumer Finances two primary
products, revolving lines of credit accessed by check and unsecured loan
accounts, grew a combined $2.6 billion, or 62%, to $6.8 billion.

Sales Finance

Consumer Finances Sales Finance products continued to produce strong
results with $2.4 billion in loans, up 30% or $600 million from 1999. MBNA
offers point-of-sale retail loans for a wide variety of major
purchases such as computers, travel packages, and elective surgery. MBNA
currently has 120 partners, including Gateway, TLC Laser Eye Center, American
Society of Plastic and Reconstructive Surgeons, and Ethan Allen. In 2000, MBNA
and Apple Computer introduced instant financing
for Apple customers online. These programs have helped fuel nearly 700,000
new consumer finance accounts added via the Internet in 2000.

|                                                                                                                                                                                                                        |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                                       
|                                                                                                                                                                                                                        |  | 
|                                                                                                                                                                                                                       
|In 2000, MBNA increased its market share in the United Kingdom and Ireland
to 12%, which represents four million Customers. In Canada, MBNA increased its
market share to 5%MBNA Canada now has
1.5 million Customers.
|                                                                                                                                                                                                                       

P.J. ODWYERVice Chairman and Chief Operating Officer
MBNA International Bank, Ltd.



THINK OF YOURSELF AS A CUSTOMER    19



---



|When we considered moving our program from a different issuer, MBNA impressed
us as an outstanding organization. Through their energy and enthusiasm, the
people of MBNA exemplify a total commitment to Customer satisfaction that
matches the high standards we have for our member and consumer services.As a membership organization,
AAA is committed to providing high-quality products backed by customer service
excellence. To a large degree, the success of the AAA/MBNA
partnership is a result of the
alignment of our customer service principles, which are consistent with the
Think of yourself as
a Customer philosophy. | JOHN FLICKERPresident, National Audubon SocietyROBERT L. DARBELNETPresident and Chief Executive Officer, AAA
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------

20    THINK OF YOURSELF AS A CUSTOMER



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|PETER OPPENHEIMERVice President of Finance and Controller, Apple Computer | Apple is all about making the
best technology more accessible to consumers. We are proud to work with MBNA, a
recognized pioneer
in providing immediate web-based loan decisions, to give more
people a chance to experience
our revolutionary products.MBNA began marketing
to the members of AOPA
in 1984. Today, more than 140,000 aircraft owners
carry an MBNA credit card with loans totaling more than $400 million. AOPA
members also benefit from an aircraft financing program for new or used
aircraft.
|------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(continued from page 19)

MBNA Consumer Services

MBNA Consumer Services continued its success in cross-selling diverse,
high-quality products and services to our Customers in 2000. These products
will continue to be a growing source of non-interest revenues for MBNA.

Insurance Services

MBNA has been selling credit-related insurance since 1987 and now has 2.6
million Customers. Over the past few years, the company has greatly expanded
its insurance business. MBNA began offering auto insurance in 1999 and has
opened nearly 100,000 new policies through 2000. In addition, more than 100
affinity groups endorse MBNA insurance products, including Penn State
University, the American Nurses Association, and the Telephone Pioneers of
America.

MBNA also began cross-selling several other insurance-related products,
including life and health and fixed annuities. In total, nearly 20,000 of these
new insurance policies were opened. The insurance business continues to be a
logical extension of our product offerings.

THINK OF YOURSELF AS A CUSTOMER    21



---



MBNA FOUNDATION

The people of MBNA have always been active in the community. Over the past 10
years, the impact of this involvement has increased significantly as MBNA has
grown from 4,000 to 25,000 people. Formal programs to encourage volunteering,
assist in education, award community grants, and identify additional needs in
the community were established. MBNAs commitment to the communityled by the
individual dedication of MBNA people through nearly two decadescontinues to
expand today.

In 1997, MBNA established a foundation to expand and formalize this
commitment. The MBNA Foundation strives to improve the quality of life in
communities where MBNA people live
and work. Its main objectives are to enhance the quality and availability
of education through grants and scholarships, provide assistance to human
service organizations that help people in need, support environmental
conservation and preservation, and aid organizations that enable
peopleespecially young peoplethroughout the community
to enjoy and learn more about the arts.

In 2000, the MBNA Foundation began a number of new initiatives to benefit
local communities. The Foundation awarded its first grants and scholarships to
students in Cleveland and created a library grants program in mid-coast Maine.
The Foundation also launched a new Web site (www.mbnafoundation.org) to make
information more accessible to teachers, students, and community organizations.

Improving education is an ongoing priority for MBNA. The MBNA Foundation
has awarded $15 million in scholarships to enable 917 talented, lower-income
students to attend college. The Foundation has also given $17.4 million in
grants to help improve the quality of education in local classrooms and
libraries, including special needs grants to help people with cognitive
disabilities. For teachers and students in kindergarten through twelfth grade,
the Foundation has provided volunteer support, tutoring and mentoring programs,
assistance with operating expenses, funding for need-based scholarships,
college and career counseling, summer internships, and other educational and
advisory services at a number of local schools. The Foundation also supports
numerous colleges and universities, including several schools that count many
MBNA people among their alumni.





The MBNA Foundation strives to improve the quality of life in communities
where MBNA people live and work.

22    THINK OF YOURSELF AS A CUSTOMER



---






CRAIG SCHROEDER (left)Executive Director, MBNA Foundation

 

KAREN YANICKDirector of Volunteer Programs, MBNA Foundation

 

SAM CONKLINGMember of the Educational Grants CommitteeMaine

 

JEFFREY MARTINIScholarship Manager, MBNA Foundation

|                                                                                                                                                                                                            |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                           
|                                                                                                                                                                                                            |  | 
|                                                                                                                                                                                                           
|Through grants and scholarship programs, the MBNA Foundation
helps increase the availability of high-quality education and supports
educational initiatives that make a difference in young peoples lives.
|                                                                                                                                                                                                           

MBNA FOUNDATION HIGHLIGHTS



| |  | Provided 917 four-year college
scholarships totaling $15 million                                                                                       
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Committed $17.4 million in grants for more than 3,300 academic programs                                                                                
| 
| |  | Provided 1,300 college scholarships
totaling $15.7 million for the children
of people who work at MBNA                                                 
| 
| |  | Raised $32 million over the past
10 years through MBNAs annual Community Campaign for the
United Way and other charities
that help local organizations
| 
| |  | MBNA people have volunteered more
than 2 million hours since 1991                                                                                      
| 
| |  | MBNAs senior executives have personally donated nearly $15 million to
the MBNA Foundation since 1991                                                  

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 at MBNA. Overall, the
program has helped to provide more than 1,300 scholarships totaling $15.7
million, approximately $4 million of which MBNA senior executives personally
funded. 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.

MBNAs volunteer and financial support has made it possible for many
nonprofit organizations to expand the services that they provide to those less
fortunate. MBNA has been a primary sponsor of a number of programs that help
low-income residents, including child care and dental care centers, homeless
shelters, and job training programs. MBNAs capital and operating donations,
along with volunteer support, have helped organizations provide special
education, housing,

(continued)

THINK OF YOURSELF AS A CUSTOMER    23



---



|                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------
|MBNAs long-standing involvement with St. Benedicts, as well as
the city of Newark, New Jersey, is invaluable. The people of MBNA
have been instrumental in helping us pioneer innovative career
programs at St. Benedicts that provide our students with opportunities to
succeed in life.                                                                                                           |  |                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                          |  | FATHER EDWIN LEAHY, OSBHeadmaster, St. Benedicts
Preparatory School               
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|MBNA has been an invaluable partner to the Cleveland
Municipal School District. Through scholarships provided to our
students and educational grants provided to our teachers, MBNA has worked
with us to develop educational programs and opportunities for Clevelands
children. Projects supported by MBNA grants permit our students
to reach beyond the familiar and expand the world around them. |  |                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                          |  | BARBARA BYRD-BENNETTChief Executive Officer, Cleveland Municipal Schools           
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|MBNA is a consistent leader in support of Delawares social service
agencies. They are always among
the first to volunteer to help or make a donation. People throughout MBNA
truly care about helping other people, and it shows.                                                                                                                                                                      |  |                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                          |  | BROTHER RONALD GIANNONE, OFM CAP.Founder and Executive Director, Ministry of Caring

24    THINK OF YOURSELF AS A CUSTOMER



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(continued from page 23)

MBNA FOUNDATION

and life skills education to children and adults with cognitive
disabilities. Additionally, MBNAs support for several local health care
organizations has led to improved medical care for people living in communities
near MBNAs offices.

MBNAs commitment to the environment includes
significant funding for preservation and land conservation efforts, as
well as environmental advocacy and education programs. For example, MBNA has
provided more than $400,000 in grants to environmental education programs and
set aside 17% of the land it owns in Maine
for conservation purposes.

The companys investment in local arts organizations enables a greater
number of people from all segments of the community to benefit from involvement
in the visual and performing arts. These commitments include capital and
operating support for subsidized dance lessons at a dance and music school in
Wilmington, as well as expanded exhibition space and educational activities at
local art museums in Delaware and Maine. As a result of this support from MBNA,
more than 100,000 students from local public schools have been able for the
first time to experience the work of renowned artists.

The Foundation continues to promote volunteer opportunities throughout
MBNA. Every MBNA person is encouraged
to volunteer four hours per month on company time and the Foundation works
with senior managers to establish or further expand divisional volunteer
partnerships with community organizations and schools. Over
the past 10 years, MBNAs annual Community Campaign for the United Way has
raised $32 million to benefit local organizations. In addition, more than
10,000 MBNA people, family members, and friends have raised nearly $10 million
in MBNA Foundation Walks since 1998. MBNA people have volunteered more than 2
million hours since 1991, including 325,000 hours in 2000a 30% increase over
1999.

The people of MBNA donate their time to a variety
of organizations including childrens youth groups, clothing and food banks,
elder care facilities, homes for the physically and developmentally challenged,
neighborhood centers, and more. The following list represents just a few of the
organizations where MBNA volunteers are making
a difference: Big Brothers/Big Sisters, Benedictine Foundation, Brady
Center, Boys and Girls Clubs, Food Bank, Easter Seals, Friendship House,
Ministry of Caring, Meals on Wheels, Special Olympics, West End Neighborhood
House, Habitat for Humanity, Junior Achievement,
Literacy Volunteers of America, Ronald McDonald House, and the YMCA.

In the spring of 2000, Lincolnville Central School
in Maine was forced to close its building due to health
concerns. Because the
necessary repairs would take several years, school officials had just a few
months to find another home for Lincolnvilles 240 students before the start of
school in the fall.

Principal Paul Russo approached MBNA about assisting in the development of a
temporary school location.

With MBNAs assistance, a new building was constructed that the town of
Lincolnville will use as a temporary Central School until a permanent school is
completed. Best of all, it was open for the start of school on September 5.

THINK OF YOURSELF AS A CUSTOMER    25



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MBNA OFFICE LOCATIONS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|United StatesHeadquarters                                                                                                                                                                                                                                                                                                                                                                                                                          |  | MBNA Marketing Systems
Headquarters                                                                                                                                                                                                                                                                                                                                                                                           |  | 18 Green Hill Dr.
Presque Isle, ME 04769
(800) 545-2977                                                                                                                                                                                                                                                                                          |  | International OfficesCanada                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|MBNA Corporation
Wilmington, DE 19884
(800) 441-7048                                                                                                                                                                                                                                                                                                                                                                                               |  | 32 Washington St.
Camden, ME 04843
(800) 386-6262                                                                                                                                                                                                                                                                                                                                                                             |  | 411 Old County Rd.
Rockland, ME 04841
(800) 386-6262                                                                                                                                                                                                                                                                                             |  | 1600 James Naismith Dr.
Gloucester, Ontario
K1B 5N8
(888) 871-6262                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|United StatesRegional Offices
 
75 Enterprise, Suite 200
Aliso Viejo, CA 92656
(888) 874-6262
 
1501 Yamato Rd.
Boca Raton, FL 33431
(800) 841-6845
 
3475 Piedmont Rd. NE
Suite 1650
Atlanta, GA 30305
(800) 446-7048
 
676 North Michigan Ave.
Chicago, IL 60611
(800) 906-6262
 
11333 McCormick Rd.
Hunt Valley, MD 21031
(888) 680-6945
 
1 Hatley Rd.
Belfast, ME 04915
(800) 843-3526
 
320 University Ave.
Newark, NJ 07102
(888) 652-6262 |  | MBNA Marketing Systems
Offices
 
1075 Silver Lake Blvd.
Dover, DE 19904
(800) 346-2620
 
400 Christiana Rd.
Newark, DE 19713
(800) 441-7048
 
1501 Yamato Rd.
Boca Raton, FL 33431
(800) 841-6845
 
11333 McCormick Rd.
Hunt Valley, MD 21031
(888) 680-6945
 
5 Industrial Pkwy.
Brunswick, ME 04011
(800) 645-6682
 
274 Front St.
Farmington, ME 04938
(888) 465-3110
 
50 Pleasant St.
Fort Kent, ME 04743
(888) 336-6262 |  | 100 Main St.
Suite 303
Dover, NH 03820
(800) 330-5929
 
320 University Ave.
Newark, NJ 07102
(888) 652-6262
 
388 S. Main St.
Akron, OH 44311
(800) 731-9260
 
25875 Science Park Dr.
Beachwood, OH 44122
(800) 410-6262
 
2568 Park Centre Blvd.
State College, PA 16801
(800) 471-6262
 
16001 N. Dallas Pkwy.
Dallas, TX 75248
(800) 435-9672 |  | 1000 de la Gauchetière
Suite 4300
Montréal, Québec
H3B 4W5
(514) 390-2150
 England
 
Stansfield House
Chester Business Park
Wrexham Rd.
Chester, Cheshire
CH4 9QQ
United Kingdom
(011) 44-1244-672000
 
86 Jermyn St.
London SW1Y 6JD
United Kingdom
(011) 44-207-389-6200
 Ireland
 
46 St. Stephens Green
Dublin 2, Ireland
(011) 353-1-619-6000
 
Carrick-on-Shannon
(To open in 2001)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9 W. 57th St.
New York, NY 10019
(800) 746-6262                                                                                                                                                                                                                                                                                                                                                                                                    |  | 16 Godfrey Dr.
Orono, ME 04473
(800) 503-6262                                                                                                                                                                                                                                                                                                                                                                                
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|25875 Science Park Dr.
Beachwood, OH 44122
(800) 410-6262                                                                                                                                                                                                                                                                                                                                                                                          |  | 901 Washington Ave.
Portland, ME 04103
(800) 626-2488                                                                                                                                                                                                                                                                                                                                                                        
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|16001 N. Dallas Pkwy.
Dallas, TX 75248
(800) 435-9672                                                                                                                                                                                                                                                                                                                                                                                             



26THINK OF YOURSELF AS A CUSTOMER



---



|                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------
|THOMAS D. WREN (left)Vice Chairman and Treasurer, MBNA America Bank, N.A.KENNETH A. VECCHIONEVice Chairman and Chief Financial Officer, MBNA America Bank, N.A.

FINANCIAL CONTENTS

|                                                                                      |  |  |    | 
|------------------------------------------------------------------------------------- |  |  | -- | 
|Ten-Year Statistical Summary                                                          |  |  | 28 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Glossary of Financial Terms                                                           |  |  | 30 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Managements Discussion
and Analysis of Financial Condition and Results of Operations |  |  | 31 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Supplemental Financial Information                                                    |  |  | 49 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Managements Report on
Consolidated Financial Statements and Internal Control         |  |  | 50 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Report of Independent Auditors                                                        |  |  | 51 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Consolidated Statements of Financial Condition                                        |  |  | 52 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Consolidated Statements of Income                                                     |  |  | 53 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Consolidated Statements of Changes in Stockholders Equity                            |  |  | 54 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Consolidated Statements of Cash Flows                                                 |  |  | 55 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Notes to the Consolidated Financial Statements                                        |  |  | 56 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Quarterly Data                                                                        |  |  | 80 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Preferred Stock Price Range and Dividends                                             |  |  | 81 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Common Stock Price Range and Dividends                                                |  |  | 82 | 





---



MBNA CORPORATION AND SUBSIDIARIES

TEN-YEAR STATISTICAL SUMMARY

---

(dollars in thousands, except per share amounts)

|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |            |            | 
|--------------------------------------------------------------------------------- | ----------------------------- | ------------------- | ---------- | ----------- | ---------- | ---- | ---------- | ----------- | ---------- | - | ---------- | ---------- | ---------- | 
|Year Ended December 31,                                                           |                               | 2000                |            | 1999        |            | 1998
|                                                                                  |                               |                     |            |             |            |     
|Income Statement Data for
the Year                                               
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net interest income                                                               |                               | $                   | 1,083,952  |             |            | $    | 933,765    |             |            | $ | 742,339    |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Provision for possible credit losses                                              |                               |                     | 409,017    |             |            |      | 408,914    |             |            |   | 310,039    |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other operating income                                                            |                               |                     | 5,093,174  |             |            |      | 4,207,821  |             |            |   | 3,228,969  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other operating expense                                                           |                               |                     | 3,647,702  |             |            |      | 3,077,708  |             |            |   | 2,407,204  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net income                                                                        |                               |                     | 1,312,532  |             |            |      | 1,024,423  |             |            |   | 776,266    |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Per Common Share Data for
the Year                                               
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Earnings (a)                                                                      |                               | $                   | 1.58       |             |            | $    | 1.26       |             |            | $ | 1.01       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Earningsassuming dilution (a)                                                    |                               |                     | 1.53       |             |            |      | 1.21       |             |            |   | .97        |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Dividends                                                                         |                               |                     | .32        |             |            |      | .28        |             |            |   | .24        |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Book value                                                                        |                               |                     | 7.53       |             |            |      | 4.97       |             |            |   | 2.90       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Ratios                                                                           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Return on average total assets                                                    |                               |                     | 3.94       | %           |            |      | 3.62       | %           |            |   | 3.38       | %         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Return on average stockholders equity                                            |                               |                     | 25.79      |             |            |      | 27.18      |             |            |   | 36.91      |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Average receivables to average deposits                                           |                               |                     | 85.79      |             |            |      | 85.33      |             |            |   | 86.04      |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Stockholders equity to total assets                                              |                               |                     | 17.13      |             |            |      | 13.61      |             |            |   | 9.27       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loan receivables (c):                                                            
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Delinquency (b)               |                     |            | 3.89        |            |      |            | 3.82        |            |   |            | 3.86       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Net credit losses             |                     |            | 2.49        |            |      |            | 2.63        |            |   |            | 2.39       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Managed loans (c) (d):                                                           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Delinquency                   |                     |            | 4.49        |            |      |            | 4.45        |            |   |            | 4.62       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Net credit losses             |                     |            | 4.39        |            |      |            | 4.33        |            |   |            | 4.31       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Net interest margin (e)       |                     |            | 7.08        |            |      |            | 7.42        |            |   |            | 7.47       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Managed Loan Data
(d)                                                            
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|At year end:                                                                     
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loans held for securitization |                     | $          | 8,271,933   |            |      | $          | 9,692,616   |            |   | $          | 1,692,268  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loan portfolio                |                     |            | 11,682,904  |            |      |            | 7,971,093   |            |   |            | 11,776,099 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Securitized loans             |                     |            | 68,835,884  |            |      |            | 54,591,804  |            |   |            | 46,172,739 |           
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  |                               | Total managed loans |            | $           | 88,790,721 |      |            | $           | 72,255,513 |   |            | $          | 59,641,106 | 
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|Average for the year:                                                            
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loans held for securitization |                     | $          | 8,129,333   |            |      | $          | 4,071,394   |            |   | $          | 2,577,482  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loan portfolio                |                     |            | 9,588,815   |            |      |            | 10,351,101  |            |   |            | 9,352,807  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Securitized loans             |                     |            | 59,726,838  |            |      |            | 49,706,760  |            |   |            | 40,970,936 |           
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  |                               | Total managed loans |            | $           | 77,444,986 |      |            | $           | 64,129,255 |   |            | $          | 52,901,225 | 
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|For the year:                                                                    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Sales and cash advance volume |                     | $          | 125,683,731 |            |      | $          | 105,806,935 |            |   | $          | 82,968,874 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Balance Sheet Data at Year End
Investment securities and money market instruments |                               | $                   | 5,255,615  |             |            | $    | 4,572,052  |             |            | $ | 5,440,939  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loans held for securitization                                                     |                               |                     | 8,271,933  |             |            |      | 9,692,616  |             |            |   | 1,692,268  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Credit card loans                                                                 |                               |                     | 7,798,772  |             |            |      | 6,060,564  |             |            |   | 8,975,051  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other consumer loans                                                              |                               |                     | 3,884,132  |             |            |      | 1,910,529  |             |            |   | 2,801,048  |           
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  | Total loans                   |                     |            | 11,682,904  |            |      |            | 7,971,093   |            |   |            | 11,776,099 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Reserve for possible credit losses                                                |                               |                     | (386,568   | )           |            |      | (355,959   | )           |            |   | (216,911   | )         
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  | Net loans                     |                     |            | 11,296,336  |            |      |            | 7,615,134   |            |   |            | 11,559,188 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Total assets                                                                      |                               |                     | 38,678,096 |             |            |      | 30,859,132 |             |            |   | 25,806,260 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Total deposits                                                                    |                               |                     | 24,343,595 |             |            |      | 18,714,753 |             |            |   | 15,407,040 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Long-term debt and bank notes                                                     |                               |                     | 5,735,635  |             |            |      | 5,708,880  |             |            |   | 5,939,025  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Stockholders equity                                                              |                               |                     | 6,627,278  |             |            |      | 4,199,443  |             |            |   | 2,391,035  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Average Balance Sheet Data
for the Year                                          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Investment securities and money market instruments                                |                               | $                   | 5,082,598  |             |            | $    | 5,797,141  |             |            | $ | 4,905,943  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loans held for securitization                                                     |                               |                     | 8,129,333  |             |            |      | 4,071,394  |             |            |   | 2,577,482  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Credit card loans                                                                 |                               |                     | 6,784,742  |             |            |      | 8,184,713  |             |            |   | 6,820,538  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other consumer loans                                                              |                               |                     | 2,804,073  |             |            |      | 2,166,388  |             |            |   | 2,532,269  |           
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  | Total loans                   |                     |            | 9,588,815   |            |      |            | 10,351,101  |            |   |            | 9,352,807  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Reserve for possible credit losses                                                |                               |                     | (382,443   | )           |            |      | (299,754   | )           |            |   | (192,024   | )         
|                                                                                  |                               |                     |            |             |            |      |            |             |            |   |            |           
|                                                                                  | Net loans                     |                     |            | 9,206,372   |            |      |            | 10,051,347  |            |   |            | 9,160,783  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Total assets                                                                      |                               |                     | 33,299,176 |             |            |      | 28,310,222 |             |            |   | 22,982,349 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Total deposits                                                                    |                               |                     | 20,654,087 |             |            |      | 16,901,334 |             |            |   | 13,866,645 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Long-term debt and bank notes                                                     |                               |                     | 5,699,638  |             |            |      | 5,974,276  |             |            |   | 5,873,122  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Stockholders equity                                                              |                               |                     | 5,088,882  |             |            |      | 3,769,539  |             |            |   | 2,103,043  |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Weighted average common shares outstanding (000)                                  |                               |                     | 820,551    |             |            |      | 801,020    |             |            |   | 751,856    |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Weighted average common shares
outstanding and common stockequivalents (000)      |                               |                     | 846,535    |             |            |      | 837,083    |             |            |   | 789,421    |           



---

|(a) |  | 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. MBNA Corporations (the Corporation)
common stock equivalents are solely related to employee stock options. The
Corporation has no other
common stock equivalents.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Loan delinquency does not include loans held for securitization or securitized loans.
|--- |  | -------------------------------------------------------------------------------------

28    THINK OF YOURSELF AS A CUSTOMER



---



MBNA CORPORATION AND SUBSIDIARIES



---

| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  | ---- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
| |  | 1997 |            | 1996 |  | 1995 |            | 1994 |  | 1993 |            | 1992 |  | 1991
| |  |      |            |      |  |      |            |      |  |      |            |      |  |     
| |  | $    | 692,390    |      |  | $    | 640,477    |      |  | $    | 544,226    |      |  | $    | 532,108    |   |  | $ | 474,323    |   |  | $ | 357,515    |   |  | $ | 239,599    |  
|
|
|
|
| |  |      | 260,040    |      |  |      | 178,224    |      |  |      | 138,176    |      |  |      | 108,477    |   |  |   | 98,795     |   |  |   | 97,534     |   |  |   | 86,723     |  
|
|
|
|
| |  |      | 2,812,879  |      |  |      | 1,895,923  |      |  |      | 1,424,618  |      |  |      | 1,013,580  |   |  |   | 739,968    |   |  |   | 577,505    |   |  |   | 540,708    |  
|
|
|
|
| |  |      | 2,223,121  |      |  |      | 1,626,882  |      |  |      | 1,246,067  |      |  |      | 996,110    |   |  |   | 924,872    |   |  |   | 565,467    |   |  |   | 459,035    |  
|
|
|
|
| |  |      | 622,500    |      |  |      | 474,495    |      |  |      | 353,099    |      |  |      | 266,593    |   |  |   | 207,796    |   |  |   | 172,732    |   |  |   | 149,213    |  
|
|
|
|
|
|
|
|
|
| |  | $    | .80        |      |  | $    | .61        |      |  | $    | .47        |      |  | $    | .35        |   |  | $ | .28        |   |  | $ | .23        |   |  | $ | .20        |  
|
|
|
|
| |  |      | .76        |      |  |      | .59        |      |  |      | .46        |      |  |      | .35        |   |  |   | .27        |   |  |   | .23        |   |  |   | .20        |  
|
|
|
|
| |  |      | .21        |      |  |      | .19        |      |  |      | .17        |      |  |      | .14        |   |  |   | .13        |   |  |   | .12        |   |  |   | .11        |  
|
|
|
|
| |  |      | 2.34       |      |  |      | 1.87       |      |  |      | 1.48       |      |  |      | 1.22       |   |  |   | 1.02       |   |  |   | .88        |   |  |   | .79        |  
|
|
|
|
|
|
|
|
|
| |  |      | 3.25       | %    |  |      | 3.26       | %    |  |      | 3.09       | %    |  |      | 3.16       | % |  |   | 3.15       | % |  |   | 2.96       | % |  |   | 2.79       | %
|
|
|
|
| |  |      | 35.56      |      |  |      | 34.46      |      |  |      | 35.51      |      |  |      | 32.70      |   |  |   | 30.01      |   |  |   | 28.55      |   |  |   | 28.55      |  
|
|
|
|
| |  |      | 88.82      |      |  |      | 92.50      |      |  |      | 91.60      |      |  |      | 93.05      |   |  |   | 85.34      |   |  |   | 69.98      |   |  |   | 71.77      |  
|
|
|
|
| |  |      | 9.25       |      |  |      | 10.00      |      |  |      | 9.56       |      |  |      | 9.51       |   |  |   | 10.51      |   |  |   | 10.25      |   |  |   | 9.86       |  
|
|
|
|
|
|
|
|
|
| |  |      | 3.93       |      |  |      | 3.59       |      |  |      | 3.11       |      |  |      | 2.60       |   |  |   | 3.03       |   |  |   | 3.78       |   |  |   | 4.39       |  
|
|
|
|
| |  |      | 2.14       |      |  |      | 1.98       |      |  |      | 1.91       |      |  |      | 1.96       |   |  |   | 2.43       |   |  |   | 2.87       |   |  |   | 2.65       |  
|
|
|
|
|
|
|
|
|
| |  |      | 4.59       |      |  |      | 4.28       |      |  |      | 3.70       |      |  |      | 3.03       |   |  |   | 3.27       |   |  |   | 3.99       |   |  |   | 4.40       |  
|
|
|
|
| |  |      | 3.97       |      |  |      | 3.35       |      |  |      | 2.74       |      |  |      | 2.59       |   |  |   | 2.97       |   |  |   | 3.33       |   |  |   | 3.05       |  
|
|
|
|
| |  |      | 7.50       |      |  |      | 7.62       |      |  |      | 7.42       |      |  |      | 8.16       |   |  |   | 8.47       |   |  |   | 7.22       |   |  |   | 6.36       |  
|
|
|
|
|
|
|
|
|
| |  | $    | 2,900,198  |      |  | $    | 2,469,974  |      |  | $    | 3,168,427  |      |  | $    | 2,299,026  |   |  | $ | 741,869    |   |  | $ | 678,000    |   |  | $ | 600,000    |  
|
|
|
|
| |  |      | 8,261,876  |      |  |      | 7,659,078  |      |  |      | 4,967,491  |      |  |      | 3,407,974  |   |  |   | 3,725,509  |   |  |   | 3,300,650  |   |  |   | 2,886,405  |  
|
|
|
|
| |  |      | 38,217,786 |      |  |      | 28,494,481 |      |  |      | 18,575,786 |      |  |      | 13,036,864 |   |  |   | 7,891,140  |   |  |   | 5,881,479  |   |  |   | 5,327,901  |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  | $    | 49,379,860 |      |  | $    | 38,623,533 |      |  | $    | 26,711,704 |      |  | $    | 18,743,864 |   |  | $ | 12,358,518 |   |  | $ | 9,860,129  |   |  | $ | 8,814,306  |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|
|
|
|
|
|
|
|
|
| |  | $    | 2,875,212  |      |  | $    | 2,529,484  |      |  | $    | 2,269,362  |      |  | $    | 1,330,011  |   |  | $ | 642,750    |   |  | $ | 733,473    |   |  | $ | 560,447    |  
|
|
|
|
| |  |      | 7,563,301  |      |  |      | 6,174,095  |      |  |      | 4,792,536  |      |  |      | 4,000,271  |   |  |   | 3,425,935  |   |  |   | 2,659,305  |   |  |   | 2,707,535  |  
|
|
|
|
| |  |      | 32,746,963 |      |  |      | 22,514,014 |      |  |      | 15,440,499 |      |  |      | 9,462,401  |   |  |   | 6,596,387  |   |  |   | 5,528,394  |   |  |   | 4,563,279  |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  | $    | 43,185,476 |      |  | $    | 31,217,593 |      |  | $    | 22,502,397 |      |  | $    | 14,792,683 |   |  | $ | 10,665,072 |   |  | $ | 8,921,172  |   |  | $ | 7,831,261  |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|
|
|
|
|
|
|
|
|
| |  | $    | 66,399,425 |      |  | $    | 48,666,129 |      |  | $    | 34,272,909 |      |  | $    | 25,078,918 |   |  | $ | 17,889,747 |   |  | $ | 14,523,570 |   |  | $ | 12,915,104 |  
|
|
|
|
|
|
|
|
|
| |  | $    | 4,594,709  |      |  | $    | 3,194,664  |      |  | $    | 2,669,402  |      |  | $    | 2,269,081  |   |  | $ | 1,440,684  |   |  | $ | 1,345,995  |   |  | $ | 1,768,048  |  
|
|
|
|
| |  |      | 2,900,198  |      |  |      | 2,469,974  |      |  |      | 3,168,427  |      |  |      | 2,299,026  |   |  |   | 741,869    |   |  |   | 678,000    |   |  |   | 600,000    |  
|
|
|
|
| |  |      | 5,830,221  |      |  |      | 5,722,299  |      |  |      | 4,090,553  |      |  |      | 2,882,232  |   |  |   | 2,949,995  |   |  |   | 2,659,007  |   |  |   | 2,299,912  |  
|
|
|
|
| |  |      | 2,431,655  |      |  |      | 1,936,779  |      |  |      | 876,938    |      |  |      | 525,742    |   |  |   | 775,514    |   |  |   | 641,643    |   |  |   | 586,493    |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  |      | 8,261,876  |      |  |      | 7,659,078  |      |  |      | 4,967,491  |      |  |      | 3,407,974  |   |  |   | 3,725,509  |   |  |   | 3,300,650  |   |  |   | 2,886,405  |  
|
|
|
|
| |  |      | (162,476   | )    |  |      | (118,427   | )    |  |      | (104,886   | )    |  |      | (101,519   | ) |  |   | (97,580    | ) |  |   | (97,580    | ) |  |   | (97,580    | )
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  |      | 8,099,400  |      |  |      | 7,540,651  |      |  |      | 4,862,605  |      |  |      | 3,306,455  |   |  |   | 3,627,929  |   |  |   | 3,203,070  |   |  |   | 2,788,825  |  
|
|
|
|
| |  |      | 21,305,513 |      |  |      | 17,035,342 |      |  |      | 13,228,889 |      |  |      | 9,671,858  |   |  |   | 7,319,756  |   |  |   | 6,454,511  |   |  |   | 6,009,028  |  
|
|
|
|
| |  |      | 12,913,213 |      |  |      | 10,151,686 |      |  |      | 8,608,914  |      |  |      | 6,632,489  |   |  |   | 5,241,883  |   |  |   | 4,568,791  |   |  |   | 5,094,011  |  
|
|
|
|
| |  |      | 5,478,917  |      |  |      | 3,950,358  |      |  |      | 2,657,600  |      |  |      | 1,687,357  |   |  |   | 779,553    |   |  |   | 470,601    |   |  |   |           |  
|
|
|
|
| |  |      | 1,970,050  |      |  |      | 1,704,308  |      |  |      | 1,265,058  |      |  |      | 919,578    |   |  |   | 769,131    |   |  |   | 661,290    |   |  |   | 592,230    |  
|
|
|
|
|
|
|
|
|
| |  | $    | 3,851,867  |      |  | $    | 2,927,351  |      |  | $    | 2,451,783  |      |  | $    | 1,684,316  |   |  | $ | 1,364,350  |   |  | $ | 1,572,911  |   |  | $ | 1,401,469  |  
|
|
|
|
| |  |      | 2,875,212  |      |  |      | 2,529,484  |      |  |      | 2,269,362  |      |  |      | 1,330,011  |   |  |   | 642,750    |   |  |   | 733,473    |   |  |   | 560,447    |  
|
|
|
|
| |  |      | 5,456,349  |      |  |      | 4,907,814  |      |  |      | 4,160,230  |      |  |      | 3,207,110  |   |  |   | 2,735,191  |   |  |   | 2,050,487  |   |  |   | 2,176,144  |  
|
|
|
|
| |  |      | 2,106,952  |      |  |      | 1,266,281  |      |  |      | 632,306    |      |  |      | 793,161    |   |  |   | 690,744    |   |  |   | 608,818    |   |  |   | 531,391    |  
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  |      | 7,563,301  |      |  |      | 6,174,095  |      |  |      | 4,792,536  |      |  |      | 4,000,271  |   |  |   | 3,425,935  |   |  |   | 2,659,305  |   |  |   | 2,707,535  |  
|
|
|
|
| |  |      | (143,277   | )    |  |      | (111,041   | )    |  |      | (103,568   | )    |  |      | (99,175    | ) |  |   | (97,580    | ) |  |   | (97,580    | ) |  |   | (93,284    | )
| |  |      |            |      |  |      |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |   |  |   |            |  
| |  |      | 7,420,024  |      |  |      | 6,063,054  |      |  |      | 4,688,968  |      |  |      | 3,901,096  |   |  |   | 3,328,355  |   |  |   | 2,561,725  |   |  |   | 2,614,251  |  
|
|
|
|
| |  |      | 19,125,282 |      |  |      | 14,571,288 |      |  |      | 11,425,721 |      |  |      | 8,432,511  |   |  |   | 6,596,419  |   |  |   | 5,829,052  |   |  |   | 5,347,990  |  
|
|
|
|
| |  |      | 11,752,887 |      |  |      | 9,408,843  |      |  |      | 7,709,840  |      |  |      | 5,728,432  |   |  |   | 4,767,669  |   |  |   | 4,847,911  |   |  |   | 4,553,186  |  
|
|
|
|
| |  |      | 4,639,430  |      |  |      | 3,029,250  |      |  |      | 2,212,591  |      |  |      | 1,199,520  |   |  |   | 537,609    |   |  |   | 116,301    |   |  |   |           |  
|
|
|
|
| |  |      | 1,750,459  |      |  |      | 1,377,072  |      |  |      | 994,287    |      |  |      | 815,243    |   |  |   | 692,460    |   |  |   | 605,079    |   |  |   | 522,721    |  
|
|
|
|
| |  |      | 751,837    |      |  |      | 751,812    |      |  |      | 751,839    |      |  |      | 751,840    |   |  |   | 751,840    |   |  |   | 752,360    |   |  |   | 751,878    |  
|
|
|
|
| |  |      | 789,801    |      |  |      | 778,473    |      |  |      | 770,464    |      |  |      | 762,515    |   |  |   | 760,118    |   |  |   | 760,187    |   |  |   | 756,576    |  



---

|(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 2.14%, 3.94%, and 7.14%,
respectively, for the year ended December 31, 2000. The Loan Quality section in
Managements Discussion and Analysis of Financial Condition and Results of
Operations and Note D to the audited consolidated financial statements provide
further detail regarding the implementation of the revised FFIEC policy.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(d) |  | Managed loans include the Corporations loans held for securitization,
loan portfolio, and securitized loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|   
|   
|   
|(e) |  | Managed net interest margin is presented on a fully taxable
equivalent basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

29



---



MBNA CORPORATION AND SUBSIDIARIES

GLOSSARY OF FINANCIAL TERMS

---

The following definitions may be helpful when reading Managements
Discussion and Analysis of Financial Condition and Results of Operations
of MBNA Corporation (the Corporation).

ASSET SECURITIZATION

Asset securitization removes loan receivables from the consolidated statements
of financial condition by selling them, generally to a trust. Asset
securitization converts interest income, interchange income, credit card and
other fees, and insurance income in excess of interest paid to investors,
credit losses, and other trust expenses into securitization income.

BORROWED FUNDS

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

CREDIT CARD FEES

Credit card fees include annual, late, overlimit, returned check, cash advance,
and other miscellaneous fees earned on the Corporations credit card loans.

DIRECT DEPOSITS

Direct deposits are deposits marketed to and received from individual Customers
without the use of a third-party intermediary.

FOREIGN ACTIVITIES

The Corporations foreign activities are primarily performed through MBNA
International Bank Limited and MBNA Canada Bank, which are both subsidiaries of
MBNA America Bank, N.A. (the Bank). The Bank also has a foreign branch office
in the Grand Cayman Islands.

FOREIGN CURRENCY EXCHANGE RATE RISK

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 unhedged
portion of the Corporations net investment in its foreign subsidiaries.

FULLY TAXABLE EQUIVALENT (FTE) BASIS

FTE 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.

INSURANCE INCOME

Insurance income represents the commission fee the Corporation receives for
marketing credit-related Life and Disability, Automobile, and Life and Health
insurance products. The Corporation does not retain any of the underwriting
risk associated with the insurance products it markets.

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.

INTEREST RATE RISK

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.

INTEREST RATE SENSITIVE ASSETS/LIABILITIES

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.

INVESTMENT SECURITIES

Investment securities include both those available-for-sale and those
held-to-maturity. The Corporation does not hold investment securities for
trading purposes.

LOAN PORTFOLIO

Loan portfolio includes credit card and other consumer loans,
excluding loans held for securitization, as reported on the
consolidated statements of financial condition as total loans.

LOAN RECEIVABLES

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

MANAGED LOANS

Managed loans consist of the Corporations loans held for
securitization, loan portfolio, and securitized loans.

MONEY MARKET INSTRUMENTS

Money market instruments include interest-earning time deposits in other banks
and federal funds sold and securities purchased under resale agreements.

NET INTEREST INCOME

Net interest income represents interest income on total interest-earning
assets, on an FTE basis where appropriate, less interest expense on total
interest-bearing liabilities.

OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS

Off-balance-sheet financial instruments include interest rate swap agreements,
forward exchange contracts, 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. The Corporation uses forward exchange contracts and foreign exchange
swap agreements to reduce its exposure to foreign currency exchange rate risk
related to its foreign bank subsidiaries.

The Corporation does not hold or issue off-balance-sheet financial instruments
for trading purposes.

30



---



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, tables, and glossary of financial
terms included in this report.

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 International 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
affinity 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. (MBNADelaware), a newly chartered national
bank which was converted from a preexisting state chartered bank. MBNA Delaware
offers corporate loan products and travel related services.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Corporation generates interest and other income through finance charges
assessed on outstanding loan receivables, interchange income, credit card and
other fees, securitization income, insurance income, and interest earned on
investment securities and money market instruments. The Corporations primary
costs are the costs of funding its loan receivables and investment securities
and money market instruments, which include interest paid on deposits,
short-term borrowings, and long-term debt and bank notes; credit losses;
royalties paid to affinity groups and financial institutions; business
development and operating expenses; and income taxes.                                                                                                                                                                                                                                                                                                                                                                                 

EARNINGS SUMMARY

Net income for 2000 increased 28.1% to $1.3 billion or $1.53 per common share
from $1.0 billion or $1.21 per common share in 1999. Net income for 1999
increased 32.0% from $776.3 million
or $.97 per common share in 1998. Earnings per common share amounts are
presented assuming dilution.

The overall growth in earnings was primarily attributable to the growth in the
Corporations managed loans outstanding. The Corporations average managed
loans increased 20.8% to $77.4 billion for 2000 from $64.1 billion for 1999.
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. During 2000, the
Corporation acquired 459 new endorsements from organizations and added 13.7
million new accounts. The Corporations average managed loans increased 21.2%
for 1999 from $52.9 billion for 1998. Total managed loans at December 31, 1999
were $72.3 billion, a $12.6 billion increase from December 31, 1998. During
1999, the Corporation acquired 400 new endorsements from organizations and
added 12.5 million new accounts. The growth in managed
loans for 2000 and 1999 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 is the sale of loans to investors,
generally through a trust, that converts interest income, interchange income,
credit card and other fees, and insurance income in excess
of interest paid to investors, credit losses, and other trust expenses into
securitization income, while reducing the Corporations on-balance-sheet
assets. The Corporation had $68.8 billion of securitized loans outstanding at
December 31, 2000. During 2000, the Corporation securitized $15.8 billion of
credit card and other consumer loan receivables. In addition, the Corporation
assumed $3.9 billion of 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. During 1999, the Corporation
securitized $13.3 billion of credit card and other consumer loan receivables,
bringing the total amount of securitized loans outstanding to $54.6 billion at
December 31, 1999. | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Corporations return on average total assets for 2000 increased to 3.94%
from 3.62% for 1999 and 3.38% for 1998. The increases in 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 25.79% for 2000, as compared to
27.18% for 1999 and 36.91% for 1998. The lower return on average stockholders
equity during 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. The lower return on
average stockholders equity during 1999 was primarily a result of an increase
in average stockholders equity from the issuance of 50 million shares of
common stock in January 1999 for $1.2 billion, net of issuance costs.                                                                                                                                                                 | 

31



---



MBNA CORPORATION AND SUBSIDIARIES

---

Table 1: Statements of Average Balances, Yields and Rates, Income or Expense
(dollars in thousands, yields and rates on a fully taxable equivalent basis)

---

|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |        |           |         |           | 
|------------------------------------ | ------------------------------------------------------------------- | ---------------------------------- | ------------------------------------- | --------------------------------------------------- | --------- | ---------- | ---------- | ------ | ----- | ---------- | ----- | ------ | --------- | ------- | --------- | 
|Year Ended December 31,              |                                                                     |                                    |                                       |                                                     |           | 2000      
|                                     |                                                                     |                                   
|                                     |                                                                     |                                    |                                       |                                                     |           | Average    |            | Yield/ |       | Income    
|                                     |                                                                     |                                    |                                       |                                                     |           | Amount     |            | Rate   |       | or Expense
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |           
|Assets                              
|Interest-earning assets:            
|                                    
|                                    
|                                    
|                                    
|                                     | Interest-earning time deposits in other banks:                     
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic                           |                                       | $                                                   | 9,562     |            |            |        | 5.65  | %          |       | $      | 540       |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 1,324,770 |            |            |        | 6.28  |            |       |        | 83,187    |        
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-earning time deposits in other banks |           |            | 1,334,332  |        |       |            | 6.27  |        |           |         | 83,727    | 
|                                    
|                                    
|                                    
|                                    
|                                     | Federal funds sold and securities purchased under resale agreements |                                    |                                       | 676,512                                             |           |            |            | 6.43   |       |            |       | 43,486 |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total money market instruments                      |           |            | 2,010,844  |        |       |            | 6.33  |        |           |         | 127,213   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Investment securities (a):                                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Taxable                            |                                       |                                                     | 2,969,987 |            |            |        | 5.86  |            |       |        | 174,109   |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Tax-exempt (b)                     |                                       |                                                     | 101,767   |            |            |        | 6.65  |            |       |        | 6,763     |        
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total investment securities                         |           |            | 3,071,754  |        |       |            | 5.89  |        |           |         | 180,872   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans held for securitization:                                     
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic                           |                                       |                                                     | 7,095,873 |            |            |        | 14.45 |            |       |        | 1,025,409 |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 1,033,460 |            |            |        | 13.20 |            |       |        | 136,383   |        
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loans held for securitization                 |           |            | 8,129,333  |        |       |            | 14.29 |        |           |         | 1,161,792 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans:                                                             
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Credit card                           |                                                     |           | 5,706,303  |            |        |       | 13.71      |       |        |           | 782,454 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Other consumer                        |                                                     |           | 1,988,794  |            |        |       | 14.72      |       |        |           | 292,829 |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic loans                                |           |            | 7,695,097  |        |       |            | 13.97 |        |           |         | 1,075,283 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 1,893,718 |            |            |        | 12.30 |            |       |        | 232,886   |        
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loans                                         |           |            | 9,588,815  |        |       |            | 13.64 |        |           |         | 1,308,169 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loan receivables                              |           |            | 17,718,148 |        |       |            | 13.94 |        |           |         | 2,469,961 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-earning assets                       |           |            | 22,800,746 |        |       |            | 12.18 |        |           |         | 2,778,046 | 
|                                    
|                                    
|                                    
|                                    
|Cash and due from banks              |                                                                     |                                    | 676,007                               |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Premises and equipment, net          |                                                                     |                                    | 1,695,014                             |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                     |                                    | 8,509,852                             |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Reserve for possible credit losses   |                                                                     |                                    | (382,443                              | )                                                   |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total assets                                        |           | $          | 33,299,176 |        |       |            |       |        |           |         |           | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|Liabilities and Stockholders Equity
|                                    
|                                    
|                                    
|                                    
|Interest-bearing liabilities:       
|                                    
|                                    
|                                    
|                                    
|                                     | Interest-bearing deposits:                                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     | $         | 14,502,004 |            |        |       | 6.39       |       |        |           | 927,297 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Money market deposit accounts         |                                                     |           | 4,615,183  |            |        |       | 6.17       |       |        |           | 284,821 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Interest-bearing transaction accounts |                                                     |           | 39,635     |            |        |       | 5.15       |       |        |           | 2,041   |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Savings accounts                      |                                                     |           | 9,208      |            |        |       | 5.09       |       |        |           | 469     |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic interest-bearing deposits            |           |            | 19,166,030 |        |       |            | 6.34  |        |           |         | 1,214,628 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign:                          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     |           | 801,631    |            |        |       | 5.73       |       |        |           | 45,947  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing deposits                     |           |            | 19,967,661 |        |       |            | 6.31  |        |           |         | 1,260,575 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Borrowed funds:                                                    
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Short-term borrowings:            
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 388,415    |            |        |       | 6.11       |       |        |           | 23,739  |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 179,917    |            |        |       | 5.79       |       |        |           | 10,413  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total short-term borrowings                         |           |            | 568,332    |        |       |            | 6.01  |        |           |         | 34,152    | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Long-term debt and bank notes (c):
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 4,610,744  |            |        |       | 7.03       |       |        |           | 323,955 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 1,088,894  |            |        |       | 6.71       |       |        |           | 73,045  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total long-term debt and bank notes                 |           |            | 5,699,638  |        |       |            | 6.97  |        |           |         | 397,000   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total borrowed funds                                |           |            | 6,267,970  |        |       |            | 6.88  |        |           |         | 431,152   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing liabilities                  |           |            | 26,235,631 |        |       |            | 6.45  |        |           |         | 1,691,727 | 
|                                    
|                                    
|                                    
|                                    
|Demand deposits                      |                                                                     |                                    | 686,426                               |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                                                                     |                                    | 1,288,237                             |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total liabilities                                   |           |            | 28,210,294 |        |       |            |       |        |           |         |           | 
|                                    
|                                    
|                                    
|                                    
|Stockholders equity                 |                                                                     |                                    | 5,088,882                             |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total liabilities and stockholders equity          |           | $          | 33,299,176 |        |       |            |       |        |           |         |           | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       | Net interest income                                 |           |            |            |        |       |            |       |        |           | $       | 1,086,319 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Net interest margin                                 |           |            |            |        |       |            | 4.76  |        |           |         |           | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       | Interest rate spread                                |           |            |            |        |       |            | 5.73  |        |           |         |           | 

[Additional columns below]

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

|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |        |         |         |           | 
|------------------------------------ | ------------------------------------------------------------------- | ---------------------------------- | ------------------------------------- | --------------------------------------------------- | --------- | ---------- | ---------- | ------ | ----- | ---------- | ----- | ------ | ------- | ------- | --------- | 
|Year Ended December 31,              |                                                                     |                                    |                                       |                                                     |           | 1999      
|                                     |                                                                     |                                   
|                                     |                                                                     |                                    |                                       |                                                     |           | Average    |            | Yield/ |       | Income    
|                                     |                                                                     |                                    |                                       |                                                     |           | Amount     |            | Rate   |       | or Expense
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |           
|Assets                              
|Interest-earning assets:            
|                                    
|                                    
|                                    
|                                    
|                                     | 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   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans held for securitization:                                     
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic                           |                                       |                                                     | 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   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans:                                                             
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Credit card                           |                                                     |           | 7,183,094  |            |        |       | 13.43      |       |        |         | 964,912 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Other consumer                        |                                                     |           | 1,988,622  |            |        |       | 14.14      |       |        |         | 281,117 |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic loans                                |           |            | 9,171,716  |        |       |            | 13.59 |        |         |         | 1,246,029 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 1,179,385 |            |            |        | 13.40 |            |       |        | 158,034 |        
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loans                                         |           |            | 10,351,101 |        |       |            | 13.56 |        |         |         | 1,404,063 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loan receivables                              |           |            | 14,422,495 |        |       |            | 13.59 |        |         |         | 1,959,368 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-earning assets                       |           |            | 20,219,636 |        |       |            | 11.20 |        |         |         | 2,264,203 | 
|                                    
|                                    
|                                    
|                                    
|Cash and due from banks              |                                                                     |                                    | 541,644                               |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Premises and equipment, net          |                                                                     |                                    | 1,651,977                             |                                                     |           |            |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                     |                                    | 6,196,719                             |                                                     |           |            |            |        |       |           
|                                    
|                                    
|                                    
|                                    
|Reserve for possible credit losses   |                                                                     |                                    | (299,754                              | )                                                   |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total assets                                        |           | $          | 28,310,222 |        |       |            |       |        |         |         |           | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|Liabilities and Stockholders Equity
|                                    
|                                    
|                                    
|                                    
|Interest-bearing liabilities:       
|                                    
|                                    
|                                    
|                                    
|                                     | Interest-bearing deposits:                                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     | $         | 11,193,882 |            |        |       | 5.90       |       |        |         | 660,933 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Money market deposit accounts         |                                                     |           | 4,308,305  |            |        |       | 5.01       |       |        |         | 215,705 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Interest-bearing transaction accounts |                                                     |           | 36,895     |            |        |       | 4.27       |       |        |         | 1,574   |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Savings accounts                      |                                                     |           | 37,808     |            |        |       | 4.33       |       |        |         | 1,636   |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic interest-bearing deposits            |           |            | 15,576,890 |        |       |            | 5.65  |        |         |         | 879,848   | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign:                          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     |           | 742,210    |            |        |       | 5.33       |       |        |         | 39,578  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing deposits                     |           |            | 16,319,100 |        |       |            | 5.63  |        |         |         | 919,426   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Borrowed funds:                                                    
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Short-term borrowings:            
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 441,993    |            |        |       | 5.67       |       |        |         | 25,047  |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 222,383    |            |        |       | 5.08       |       |        |         | 11,290  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total short-term borrowings                         |           |            | 664,376    |        |       |            | 5.47  |        |         |         | 36,337    | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Long-term debt and bank notes (c):
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 5,450,998  |            |        |       | 6.18       |       |        |         | 336,728 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 523,278    |            |        |       | 6.88       |       |        |         | 36,015  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total long-term debt and bank notes                 |           |            | 5,974,276  |        |       |            | 6.24  |        |         |         | 372,743   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total borrowed funds                                |           |            | 6,638,652  |        |       |            | 6.16  |        |         |         | 409,080   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing liabilities                  |           |            | 22,957,752 |        |       |            | 5.79  |        |         |         | 1,328,506 | 
|                                    
|                                    
|                                    
|                                    
|Demand 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                                 |           |            |            |        |       |            |       |        |         | $       | 935,697   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |            |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Net interest margin                                 |           |            |            |        |       |            | 4.63  |        |         |         |           | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       | Interest rate spread                                |           |            |            |        |       |            | 5.41  |        |         |         |           | 

[Additional columns below]

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

|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |        |         |         |           | 
|------------------------------------ | ------------------------------------------------------------------- | ---------------------------------- | ------------------------------------- | --------------------------------------------------- | --------- | --------- | ---------- | ------ | ----- | ---------- | ----- | ------ | ------- | ------- | --------- | 
|Year Ended December 31,              |                                                                     |                                    |                                       |                                                     |           | 1998     
|                                     |                                                                     |                                    |                                       |                                                     |           |          
|                                     |                                                                     |                                    |                                       |                                                     |           | Average   |            | Yield/ |       | Income    
|                                     |                                                                     |                                    |                                       |                                                     |           | Amount    |            | Rate   |       | or Expense
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |           
|Assets                              
|Interest-earning assets:            
|                                    
|                                    
|                                    
|                                    
|                                     | Interest-earning time deposits in other banks:                     
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic                           |                                       | $                                                   | 8,806     |           |            |        | 4.69  | %          |       | $      | 413     |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 2,349,929 |           |            |        | 5.75  |            |       |        | 135,007 |        
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-earning time deposits in other banks |           |           | 2,358,735  |        |       |            | 5.74  |        |         |         | 135,420   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Federal funds sold and securities purchased under resale agreements |                                    |                                       | 538,009                                             |           |           |            | 5.35   |       |            |       | 28,783 |        
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total money market instruments                      |           |           | 2,896,744  |        |       |            | 5.67  |        |         |         | 164,203   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Investment securities (a):                                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Taxable                            |                                       |                                                     | 1,917,645 |           |            |        | 5.79  |            |       |        | 111,092 |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Tax-exempt (b)                     |                                       |                                                     | 91,554    |           |            |        | 5.72  |            |       |        | 5,238   |        
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total investment securities                         |           |           | 2,009,199  |        |       |            | 5.79  |        |         |         | 116,330   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans held for securitization:                                     
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic                           |                                       |                                                     | 1,853,805 |           |            |        | 14.36 |            |       |        | 266,190 |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 723,677   |           |            |        | 14.64 |            |       |        | 105,952 |        
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loans held for securitization                 |           |           | 2,577,482  |        |       |            | 14.44 |        |         |         | 372,142   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Loans:                                                             
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Credit card                           |                                                     |           | 6,174,766 |            |        |       | 14.19      |       |        |         | 876,094 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Other consumer                        |                                                     |           | 2,288,374 |            |        |       | 13.94      |       |        |         | 318,958 |          
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic loans                                |           |           | 8,463,140  |        |       |            | 14.12 |        |         |         | 1,195,052 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign                            |                                       |                                                     | 889,667   |           |            |        | 13.52 |            |       |        | 120,278 |        
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loans                                         |           |           | 9,352,807  |        |       |            | 14.06 |        |         |         | 1,315,330 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total loan receivables                              |           |           | 11,930,289 |        |       |            | 14.14 |        |         |         | 1,687,472 | 
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-earning assets                       |           |           | 16,836,232 |        |       |            | 11.69 |        |         |         | 1,968,005 | 
|                                    
|                                    
|                                    
|                                    
|Cash and due from banks              |                                                                     |                                    | 459,842                               |                                                    
|                                    
|                                    
|                                    
|                                    
|Premises and equipment, net          |                                                                     |                                    | 1,633,761                             |                                                    
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                     |                                    | 4,244,538                             |                                                    
|                                    
|                                    
|                                    
|                                    
|Reserve for possible credit losses   |                                                                     |                                    | (192,024                              | )                                                  
|                                     |                                                                     |                                    |                                       |                                                    
|                                     |                                                                     |                                    |                                       | Total assets                                        |           | $         | 22,982,349 |       
|                                     |                                                                     |                                    |                                       |                                                    
|Liabilities and Stockholders Equity
|                                    
|                                    
|                                    
|                                    
|Interest-bearing liabilities:       
|                                    
|                                    
|                                    
|                                    
|                                     | Interest-bearing deposits:                                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Domestic:                         
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     | $         | 8,965,995 |            |        |       | 6.27       |       |        |         | 562,161 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Money market deposit accounts         |                                                     |           | 3,564,300 |            |        |       | 5.40       |       |        |         | 192,384 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Interest-bearing transaction accounts |                                                     |           | 31,644    |            |        |       | 4.67       |       |        |         | 1,478   |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Savings accounts                      |                                                     |           | 11,303    |            |        |       | 4.60       |       |        |         | 520     |          
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total domestic interest-bearing deposits            |           |           | 12,573,242 |        |       |            | 6.02  |        |         |         | 756,543   | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Foreign:                          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Time deposits                         |                                                     |           | 865,975   |            |        |       | 6.88       |       |        |         | 59,561  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing deposits                     |           |           | 13,439,217 |        |       |            | 6.07  |        |         |         | 816,104   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Borrowed funds:                                                    
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Short-term borrowings:            
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 223,437   |            |        |       | 5.53       |       |        |         | 12,347  |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 225,065   |            |        |       | 6.08       |       |        |         | 13,691  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total short-term borrowings                         |           |           | 448,502    |        |       |            | 5.81  |        |         |         | 26,038    | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     | Long-term debt and bank notes (c):
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Domestic                              |                                                     |           | 5,643,825 |            |        |       | 6.44       |       |        |         | 363,593 |          
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    | Foreign                               |                                                     |           | 229,297   |            |        |       | 7.89       |       |        |         | 18,098  |          
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total long-term debt and bank notes                 |           |           | 5,873,122  |        |       |            | 6.50  |        |         |         | 381,691   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total borrowed funds                                |           |           | 6,321,624  |        |       |            | 6.45  |        |         |         | 407,729   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Total interest-bearing liabilities                  |           |           | 19,760,841 |        |       |            | 6.19  |        |         |         | 1,223,833 | 
|                                    
|                                    
|                                    
|                                    
|Demand deposits                      |                                                                     |                                    | 427,428                               |                                                    
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                                                                     |                                    | 691,037                               |                                                    
|                                     |                                                                     |                                    |                                       |                                                    
|                                     |                                                                     |                                    |                                       | Total liabilities                                   |           |           | 20,879,306 |       
|                                    
|                                    
|                                    
|                                    
|Stockholders equity                 |                                                                     |                                    | 2,103,043                             |                                                    
|                                     |                                                                     |                                    |                                       |                                                    
|                                     |                                                                     |                                    |                                       | Total liabilities and stockholders equity          |           | $         | 22,982,349 |       
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       | Net interest income                                 |           |           |            |        |       |            |       |        |         | $       | 744,172   | 
|                                     |                                                                     |                                    |                                       |                                                     |           |           |            |        |       |            |       |       
|                                     |                                                                     |                                    |                                       | Net interest margin                                 |           |           |            |        |       |            | 4.42  |       
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                     |                                    |                                       | Interest rate spread                                |           |           |            |        |       |            | 5.50  |       



---

|(a) |  | Average amounts for investment securities available-for-sale are based on market values; if these securities were carried at amortized cost, there would be no impact on the net
interest margin.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | The fully taxable equivalent adjustment for the years ended December 31, 2000, 1999, and 1998, was $2,367, $1,932, and $1,833, 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.               

32



---



MBNA CORPORATION AND SUBSIDIARIES

---

Table 2: Rate-Volume Variance Analysis (a)
(dollars in thousands, on a fully taxable equivalent basis)

---

|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |         |          |          |  
|------------------------------------------------------------------- | ------------------------------ | ------------------------------------- | --------------------------------------------------- | ------- | -------- | -------- | ------ | ------- | ------ | ------- | ------ | ------- | -------- | -------- | -
|Year Ended December 31,                                             |                                | 2000 Compared to 1999                
|                                                                    |                                |                                      
|                                                                    |                                |                                       |                                                     |         | Volume   |          | Rate   |         | Total 
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |       
|Interest-Earning Assets                                            
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|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   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans held for securitization:                                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic                       |                                       |                                                     | 566,955 |          |          |        | 25,884  |        |         |        | 592,839 |         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 16,602  |          |          |        | (2,954  | )      |         |        | 13,648  |         
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        
|                                                                    |                                |                                       | Total loans held for securitization                 |         |          | 583,557  |        |         |        | 22,930  |        |         |          | 606,487  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans:                                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Credit card                           |                                                     |         | (202,121 | )        |        |         | 19,663 |         |        |         | (182,458 | )       
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Other consumer                        |                                                     |         | 24       |          |        |         | 11,688 |         |        |         | 11,712   |         
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        
|                                                                    |                                |                                       | Total domestic loans                                |         |          | (202,097 | )      |         |        | 31,351  |        |         |          | (170,746 | )
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 88,788  |          |          |        | (13,936 | )      |         |        | 74,852  |         
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        
|                                                                    |                                |                                       | Total loans                                         |         |          | (113,309 | )      |         |        | 17,415  |        |         |          | (95,894  | )
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        
|                                                                    |                                |                                       | Total loan receivables                              |         |          | 470,248  |        |         |        | 40,345  |        |         |          | 510,593  |  
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        
|                                                                    |                                |                                       | Total interest income                               |         |          | 427,266  |        |         |        | 86,577  |        |         |          | 513,843  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|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                                 |         | $        | 224,309  |        |         | $      | (73,687 | )      |         | $        | 150,622  |  
|                                                                    |                                |                                       |                                                     |         |          |          |        |         |        |         |        |        

[Additional columns below]

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

|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |         |         |         |  
|------------------------------------------------------------------- | ------------------------------ | ------------------------------------- | --------------------------------------------------- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | -
|Year Ended December 31,                                             |                                | 1999 Compared to 1998                
|                                                                    |                                |                                      
|                                                                    |                                |                                       |                                                     |         | Volume  |         | Rate   |         | Total  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |        
|Interest-Earning Assets                                            
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest-earning time deposits in other banks:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic                       |                                       | $                                                   | (218    | )       |         | $      | (60     | )       |         | $      | (278    | )      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | (2,266  | )       |         |        | (12,642 | )       |         |        | (14,908 | )      
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total interest-earning time deposits in other banks |         |         | (2,484  | )      |         |         | (12,702 | )      |         |         | (15,186 | )
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Federal funds sold and securities purchased under resale agreements |                                |                                       | 20,190                                              |         |         |         | (1,709 | )       |         |         | 18,481 |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total money market instruments                      |         |         | 17,706  |        |         |         | (14,411 | )      |         |         | 3,295   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Investment securities:                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Taxable                        |                                       |                                                     | 29,162  |         |         |        | (8,436  | )       |         |        | 20,726  |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Tax-exempt                     |                                       |                                                     | 256     |         |         |        | 25      |         |         |        | 281     |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total investment securities                         |         |         | 29,418  |        |         |         | (8,411  | )      |         |         | 21,007  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans held for securitization:                                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic                       |                                       |                                                     | 179,635 |         |         |        | (13,255 | )       |         |        | 166,380 |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 25,406  |         |         |        | (8,623  | )       |         |        | 16,783  |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total loans held for securitization                 |         |         | 205,041 |        |         |         | (21,878 | )      |         |         | 183,163 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans:                                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Credit card                           |                                                     |         | 137,322 |         |        |         | (48,504 | )       |        |         | 88,818  |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Other consumer                        |                                                     |         | (42,316 | )       |        |         | 4,475   |         |        |         | (37,841 | )      
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total domestic loans                                |         |         | 95,006  |        |         |         | (44,029 | )      |         |         | 50,977  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 38,831  |         |         |        | (1,075  | )       |         |        | 37,756  |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total loans                                         |         |         | 133,837 |        |         |         | (45,104 | )      |         |         | 88,733  |  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total loan receivables                              |         |         | 338,878 |        |         |         | (66,982 | )      |         |         | 271,896 |  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total interest income                               |         |         | 386,002 |        |         |         | (89,804 | )      |         |         | 296,198 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest-Bearing Liabilities                                       
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest-bearing deposits:                                         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Time deposits                         |                                                     |         | 133,091 |         |        |         | (34,319 | )       |        |         | 98,772  |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Money market deposit accounts         |                                                     |         | 37,999  |         |        |         | (14,678 | )       |        |         | 23,321  |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Interest-bearing transaction accounts |                                                     |         | 231     |         |        |         | (135    | )       |        |         | 96      |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Savings accounts                      |                                                     |         | 1,149   |         |        |         | (33     | )       |        |         | 1,116   |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total domestic interest-bearing deposits            |         |         | 172,470 |        |         |         | (49,165 | )      |         |         | 123,305 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign:                      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Time deposits                         |                                                     |         | (7,769  | )       |        |         | (12,214 | )       |        |         | (19,983 | )      
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total interest-bearing deposits                     |         |         | 164,701 |        |         |         | (61,379 | )      |         |         | 103,322 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Borrowed funds:                                                    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Short-term borrowings:        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Domestic                              |                                                     |         | 12,377  |         |        |         | 323     |         |        |         | 12,700  |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Foreign                               |                                                     |         | (161    | )       |        |         | (2,240  | )       |        |         | (2,401  | )      
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total short-term borrowings                         |         |         | 12,216  |        |         |         | (1,917  | )      |         |         | 10,299  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Long-term debt and bank notes:
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Domestic                              |                                                     |         | (12,191 | )       |        |         | (14,674 | )       |        |         | (26,865 | )      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Foreign                               |                                                     |         | 20,503  |         |        |         | (2,586  | )       |        |         | 17,917  |        
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total long-term debt and bank notes                 |         |         | 8,312   |        |         |         | (17,260 | )      |         |         | (8,948  | )
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total borrowed funds                                |         |         | 20,528  |        |         |         | (19,177 | )      |         |         | 1,351   |  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Total interest expense                              |         |         | 185,229 |        |         |         | (80,556 | )      |         |         | 104,673 |  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        
|                                                                    |                                |                                       | Net interest income                                 |         | $       | 200,773 |        |         | $       | (9,248  | )      |         | $       | 191,525 |  
|                                                                    |                                |                                       |                                                     |         |         |         |        |         |         |         |        |        



---

|(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.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 2 illustrates the impact
that rate and volume changes had on the Corporations net interest income for
the years presented.

Net interest income, on a fully taxable equivalent basis, increased $150.6
million to $1.1 billion for 2000 from 1999. Average interest-earning assets
increased $2.6 billion for 2000 from 1999. The yield on average
interest-earning assets increased 98 basis points for 2000 from 1999. Average
interest-bearing liabilities increased $3.3 billion for 2000 from 1999. The
rate paid on average interest-bearing liabilities increased 66 basis points for
2000 from 1999. The increase in the yield earned by the Corporation on average
interest-earning assets was primarily the 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. The increase in the rate
paid on average interest-bearing liabilities reflects actions by the Federal
Reserve Board which impacted overall market interest rates. The increase in
average interest-bearing liabilities for 2000 was primarily a result of 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

33



---



MBNA CORPORATION AND SUBSIDIARIES

---

Customer accounts.
The value of acquired Customer accounts represents the premiums paid by the
Corporation in excess of acquired loan receivables. Both accounts receivable
from securitization and the value of acquired Customer accounts are included in
other assets in Table 1.



Net interest income, on a fully taxable equivalent basis, increased $191.5
million to $935.7 million for 1999 from 1998. The increase in net interest
income for 1999 was primarily a result of a $3.4 billion increase in average
interest-earning assets from 1998, offset by a $3.2 billion increase in average
interest-bearing liabilities. The increase in average interest-earning assets
for 1999 was a result of an increase in average loan receivables of $2.5
billion. Average investment securities and money market instruments also
increased $891.2 million during 1999, as compared to 1998. The increase in
average interest-bearing liabilities during 1999 resulted primarily from
funding higher average interest-earning assets, accounts receivable
from securitizations, and the value of acquired Customer accounts. In addition,
the yield earned on average interest-earning assets decreased 49 basis points,
while the rate paid on average interest-bearing liabilities declined 40 basis
points for 1999, as compared to 1998. The decline in the yield earned on
average interest-earning assets and rates paid on average interest-bearing
liabilities reflects actions by the Federal Reserve Board during the last four
months of 1998 which impacted overall market interest rates in 1999. The
Corporation also reduced rates on loan products to attract and retain Customers and grow
loan receivables.

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 Corporations net interest margin, on a fully taxable equivalent
basis, was 4.76% for 2000, as compared to 4.63% for 1999 and 4.42% for 1998.

INVESTMENT SECURITIES AND MONEY MARKET INSTRUMENTS

Interest income on investment securities for 2000, on a fully taxable
equivalent basis, increased $43.6 million to $180.9 million 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. Interest income on investment securities, on a fully
taxable equivalent basis, increased $21.0 million to $137.3 million in 1999
from 1998. The increase in interest income on investment securities for 1999
was primarily the result of a $538.3 million increase in average investment
securities, offset by a 40 basis point decrease in the yield earned on these
securities.



Interest income on money market instruments decreased $40.3 million
to $127.2 million for 2000 from 1999. 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, offset by an increase of 118 basis
points in the yield earned on average money market instruments from 1999.
Interest income on money market instruments increased $3.3 million to $167.5
million for 1999 from 1998. The increase in interest income on money market
instruments for 1999 was primarily



Table 3: Investment Securities
(dollars in thousands, on a fully taxable equivalent basis)

|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |       |         |   |         |  |      |   |      | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------------------------------- | --------- | ----------------------------------------- | --------- | --------- | ---- | ---- | ---- | ----- | ------- | - | ------- |  | ---- | - | ---- | 
|                                                                                                    |  |                                                |           | Estimated Maturities at December 31, 2000
|                                                                                                    |  |                                                |           |                                          
|                                                                                                    |  |                                                |           | Within 1 Year                             |           | 1-5 Years
|                                                                                                    |  |                                                |           |                                           |           |          
|                                                                                                    |  |                                                |           | Book                                      |           | Yield     |      | Book |      | Yield
|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |      
|Investment Securities Available-for-Sale                                                           
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|U.S. Treasury and other U.S. government
agencies obligations                                        |  | $                                              | 1,228,878 |                                           |           |           | 5.38 | %    |      | $     | 479,790 |   |         |  | 6.46 | %
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                | 93,781    |                                           |           |           | 7.57 |      |      |       | 2,060   |   |         |  | 7.15 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                | 377,023   |                                           |           |           | 6.37 |      |      |       | 441,941 |   |         |  | 6.80 |  
|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |       |         |   |         |  |      |  
|                                                                                                    |  | Total investment securities available-for-sale |           | $                                         | 1,699,682 |           |      |      | 5.72 |       |         | $ | 923,791 |  |      |   | 6.63 | 
|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |       |         |   |         |  |      |  
|Investment Securities Held-to-Maturity
U.S. Treasury and other U.S. government
agencies obligations |  | $                                              |          |                                           |           |           |     |      |      | $     |        |   |         |  |     |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                | 10        |                                           |           |           | 4.77 |      |      |       | 186     |   |         |  | 4.73 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                |          |                                           |           |           |     |      |      |       | 12,066  |   |         |  | 7.02 |  
|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |       |         |   |         |  |      |  
|                                                                                                    |  | Total investment securities held-to-maturity   |           | $                                         | 10        |           |      |      | 4.77 |       |         | $ | 12,252  |  |      |   | 6.98 | 
|                                                                                                    |  |                                                |           |                                           |           |           |      |      |      |       |         |   |         |  |      |  

[Additional columns below]

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

|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |       |         |   |         |  |      |   |      | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------------------------------- | ------ | ----------------------------------------- | ------ | ------------- | ---- | ---- | ---- | ----- | ------- | - | ------- |  | ---- | - | ---- | 
|                                                                                                    |  |                                                |        | Estimated Maturities at December 31, 2000
|                                                                                                    |  |                                                |        |                                          
|                                                                                                    |  |                                                |        | 6-10 Years                                |        | Over 10 Years
|                                                                                                    |  |                                                |        |                                           |        |              
|                                                                                                    |  |                                                |        | Book                                      |        | Yield         |      | Book |      | Yield
|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |      
|Investment Securities Available-for-Sale                                                           
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|U.S. Treasury and other U.S. government
agencies obligations                                        |  | $                                              |       |                                           |        |               |     | %    |      | $     |        |   |         |  |     | %
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                |       |                                           |        |               |     |      |      |       |        |   |         |  |     |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                | 31,326 |                                           |        |               | 6.89 |      |      |       |        |   |         |  |     |  
|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |       |         |   |         |  |      |  
|                                                                                                    |  | Total investment securities available-for-sale |        | $                                         | 31,326 |               |      |      | 6.89 |       |         | $ | 11,397  |  |      |   | 6.87 | 
|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |       |         |   |         |  |      |  
|Investment Securities Held-to-Maturity
U.S. Treasury and other U.S. government
agencies obligations |  | $                                              |       |                                           |        |               |     |      |      | $     | 315,707 |   |         |  | 5.62 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                |       |                                           |        |               |     |      |      |       | 5,899   |   |         |  | 5.53 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                |       |                                           |        |               |     |      |      |       | 50,220  |   |         |  | 6.00 |  
|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |       |         |   |         |  |      |  
|                                                                                                    |  | Total investment securities held-to-maturity   |        | $                                         |       |               |      |      |     |       |         | $ | 371,826 |  |      |   | 5.67 | 
|                                                                                                    |  |                                                |        |                                           |        |               |      |      |      |       |         |   |         |  |      |  

[Additional columns below]

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

|                                                                                                    |  |                                                |           |       |           |       |      |   |      | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------------------------------- | --------- | ----- | --------- | ----- | ---- | - | ---- | 
|                                                                                                    |  |                                                |           | Total
|                                                                                                    |  |                                                |           |      
|                                                                                                    |  |                                                |           | Book  |           | Yield
|                                                                                                    |  |                                                |           |       |           |      
|Investment Securities Available-for-Sale                                                           
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|U.S. Treasury and other U.S. government
agencies obligations                                        |  | $                                              | 1,708,668 |       |           |       | 5.68 | %
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                | 95,841    |       |           |       | 7.56 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                | 861,687   |       |           |       | 6.61 |  
|                                                                                                    |  |                                                |           |      
|                                                                                                    |  | Total investment securities available-for-sale |           | $     | 2,666,196 |       |      |   | 6.05 | 
|                                                                                                    |  |                                                |           |      
|Investment Securities Held-to-Maturity
U.S. Treasury and other U.S. government
agencies obligations |  | $                                              | 315,707   |       |           |       | 5.62 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|State and political subdivisions of the United States                                               |  |                                                | 6,095     |       |           |       | 5.51 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Asset-backed and other securities                                                                   |  |                                                | 62,286    |       |           |       | 6.20 |  
|                                                                                                    |  |                                                |           |      
|                                                                                                    |  | Total investment securities held-to-maturity   |           | $     | 384,088   |       |      |   | 5.71 | 
|                                                                                                    |  |                                                |           |      

34



---



MBNA CORPORATION AND SUBSIDIARIES

---

a result of an increase of $352.9 million in
average money market instruments from 1998, offset by a 52 basis point decrease
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.

The Corporation tries to maintain its investment securities and money market
instruments position at a level appropriate for the Corporations anticipated
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. Average investment securities and money
market instruments as a percentage of average interest-earning assets were
22.3% for 2000, compared to 28.7% for 1999 and 29.1% for 1998.

Table 3 reflects the estimated maturities of the Corporations
investment securities and weighted average yields, on a fully
taxable equivalent basis, at December 31, 2000.

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

LOAN RECEIVABLES

Interest income generated by the Corporations loan receivables increased
$510.6 million to $2.5 billion for 2000 from 1999. The increase for 2000 was
primarily the result of an increase in average loan receivables of $3.3
billion. The yield earned by the Corporation for 2000 on these receivables
increased 35 basis points to 13.94%.



During 1999, interest income on loan receivables increased $271.9 million
to $2.0 billion. The increase in interest income during 1999 was the result
of a $2.5 billion increase in average loan receivables, offset by a decrease
of 55 basis points in the yield earned on these receivables.

Table 4 presents the Corporations loan receivables at year end distributed by
loan type, excluding securitized loans. Loan receivables increased 13.0% to
$20.0 billion at December 31, 2000, as compared to $17.7 billion and $13.5
billion at December 31, 1999 and 1998, respectively.

Domestic credit card loan receivables were $13.0 billion at December 31, 2000
and 1999, and $9.1 billion at December 31, 1998. During 2000, domestic credit
card loan receivables remained unchanged from 1999 as a result of ongoing
domestic credit card loan originations through marketing programs and domestic
credit card loan portfolio acquisitions being 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

Table 4: Loan Receivables Distribution
(dollars in thousands)

|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |      |       |  
|--------------------------------- | -------------- | -------------------------------------------- | --------- | --------- | ---------- | ---- | ---- | ---- | ----- | - | --------- | --------- | ---------- |  | --- | ---- | ----- | - | --------- | --------- | ---------- |  | --- | ---- | ----- | -
|December 31,                      |                | 2000                                         |           | 1999      |            | 1998
|                                  |                |                                              |           |           |            |     
|Loans Held for Securitization (a)
|                                 
|                                 
|                                 
|                                 
|Domestic:                        
|                                 
|                                 
|                                 
|                                 
|                                  | Credit card    |                                              | $         | 6,396,652 |            |      |      | 32.1 | %     |   | $         | 7,835,429 |            |  |     | 44.3 | %     |   | $         | 1,135,004 |            |  |     | 8.4  | %    
|                                 
|                                 
|                                 
|                                 
|                                  | Other consumer |                                              |           | 1,022,756 |            |      |      | 5.1  |       |   |           | 1,001,271 |            |  |     | 5.7  |       |   |           | 114,747   |            |  |     | .9   |      
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     
|                                  |                | Total domestic loans held for
securitization |           |           | 7,419,408  |      |      |      | 37.2  |   |           |           | 8,836,700  |  |     |      | 50.0  |   |           |           | 1,249,751  |  |     |      | 9.3   |  
|                                 
|                                 
|                                 
|                                 
|Foreign (b)                       |                |                                              | 852,525   |           |            |      | 4.3  |      |       |   | 855,916   |           |            |  | 4.9 |      |       |   | 442,517   |           |            |  | 3.3 |     
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     
|                                  |                | Total loans held for
securitization          |           |           | 8,271,933  |      |      |      | 41.5  |   |           |           | 9,692,616  |  |     |      | 54.9  |   |           |           | 1,692,268  |  |     |      | 12.6  |  
|                                 
|                                 
|                                 
|                                 
|Loan Portfolio
Domestic:         
|                                 
|                                 
|                                 
|                                 
|                                  | Credit card    |                                              |           | 6,612,913 |            |      |      | 33.1 |       |   |           | 5,116,381 |            |  |     | 28.9 |       |   |           | 7,981,106 |            |  |     | 59.2 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Other consumer |                                              |           | 2,799,289 |            |      |      | 14.0 |       |   |           | 1,268,019 |            |  |     | 7.2  |       |   |           | 2,748,511 |            |  |     | 20.4 |      
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     
|                                  |                | Total domestic loan portfolio                |           |           | 9,412,202  |      |      |      | 47.1  |   |           |           | 6,384,400  |  |     |      | 36.1  |   |           |           | 10,729,617 |  |     |      | 79.6  |  
|                                 
|                                 
|                                 
|                                 
|Foreign (b)                       |                |                                              | 2,270,702 |           |            |      | 11.4 |      |       |   | 1,586,693 |           |            |  | 9.0 |      |       |   | 1,046,482 |           |            |  | 7.8 |     
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     
|                                  |                | Total loan portfolio                         |           |           | 11,682,904 |      |      |      | 58.5  |   |           |           | 7,971,093  |  |     |      | 45.1  |   |           |           | 11,776,099 |  |     |      | 87.4  |  
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     
|                                  |                | Total loan receivables                       |           | $         | 19,954,837 |      |      |      | 100.0 | % |           | $         | 17,663,709 |  |     |      | 100.0 | % |           | $         | 13,468,367 |  |     |      | 100.0 | %
|                                  |                |                                              |           |           |            |      |      |      |       |   |           |           |            |  |     |      |       |   |           |           |            |  |     |     

[Additional columns below]

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

|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |      |       |  
|--------------------------------- | -------------- | -------------------------------------------- | ------- | --------- | ---------- |  | --- | ---- | ----- | - | ------- | --------- | ---------- |  | --- | ---- | ----- | -
|December 31,                      |                | 1997                                         |         | 1996     
|                                  |                |                                              |         |          
|Loans Held for Securitization (a)
|                                 
|                                 
|                                 
|                                 
|Domestic:                        
|                                 
|                                 
|                                 
|                                 
|                                  | Credit card    |                                              | $       | 2,297,400 |            |  |     | 20.6 | %     |   | $       | 2,206,218 |            |  |     | 21.8 | %    
|                                 
|                                 
|                                 
|                                 
|                                  | Other consumer |                                              |         |          |            |  |     |     |       |   |         |          |            |  |     |     |      
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total domestic loans held for
securitization |         |           | 2,297,400  |  |     |      | 20.6  |   |         |           | 2,206,218  |  |     |      | 21.8  |  
|                                 
|                                 
|                                 
|                                 
|Foreign (b)                       |                |                                              | 602,798 |           |            |  | 5.4 |      |       |   | 263,756 |           |            |  | 2.6 |     
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loans held for
securitization          |         |           | 2,900,198  |  |     |      | 26.0  |   |         |           | 2,469,974  |  |     |      | 24.4  |  
|                                 
|                                 
|                                 
|                                 
|Loan Portfolio
Domestic:         
|                                 
|                                 
|                                 
|                                 
|                                  | Credit card    |                                              |         | 5,475,933 |            |  |     | 49.0 |       |   |         | 5,514,326 |            |  |     | 54.4 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Other consumer |                                              |         | 2,187,216 |            |  |     | 19.6 |       |   |         | 1,840,052 |            |  |     | 18.2 |      
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total domestic loan portfolio                |         |           | 7,663,149  |  |     |      | 68.6  |   |         |           | 7,354,378  |  |     |      | 72.6  |  
|                                 
|                                 
|                                 
|                                 
|Foreign (b)                       |                |                                              | 598,727 |           |            |  | 5.4 |      |       |   | 304,700 |           |            |  | 3.0 |     
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loan portfolio                         |         |           | 8,261,876  |  |     |      | 74.0  |   |         |           | 7,659,078  |  |     |      | 75.6  |  
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     
|                                  |                | Total loan receivables                       |         | $         | 11,162,074 |  |     |      | 100.0 | % |         | $         | 10,129,052 |  |     |      | 100.0 | %
|                                  |                |                                              |         |           |            |  |     |      |       |   |         |           |            |  |     |     



---

|(a) |  | Loans held for securitization includes loans which were originated through certain affinity groups 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.                                                                         

35



---



MBNA CORPORATION AND SUBSIDIARIES



---

of which $1.6 billion of domestic credit card loan receivables was recorded on the
Corporations consolidated statement of financial condition and $3.9 billion of
previously securitized domestic credit card loans were assumed. During 2000,
the Corporation also 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.

During 1999, the Corporation increased domestic credit card loan receivables
through marketing programs, such as MBNA Platinum Plus MasterCard and Visa
programs, and domestic credit card loan portfolio acquisitions. The Corporation
acquired $4.7 billion of domestic credit card loan receivables during 1999,
including the acquisition of $2.7 billion of credit card loan receivables from
PNC Bank, N.A. and a $1.4 billion credit card loan portfolio from SunTrust Banks
in November 1999, which were included in loans held for securitization at
December 31, 1999. In 1999, the Corporation securitized $10.8 billion of
domestic credit card loan receivables, while $4.9 billion of previously
securitized domestic credit card loan receivables amortized back into the
Corporations loan portfolio.



Domestic other consumer loan receivables increased to
$3.8 billion at December 31, 2000, compared to $2.3 billion
and $2.9 billion at December 31, 1999 and 1998, respectively.
The increase in domestic other consumer loan receivables during 2000 was a
result of loan growth in the Corporations lines of
credit accessed through checks, sales finance accounts, and other consumer loan
portfolio acquisitions. The Corporation acquired $465.3 million of other
consumer loans during 2000, including $251.4 million from First Union
Corporation. Domestic other consumer loan receivables decreased at December 31,
1999 primarily as a result of the sale of the Corporations home equity loan
portfolio of approximately $760.0 million in October 1999, offset by loan
growth in the Corporations lines of credit accessed through checks and other
consumer loan portfolio acquisitions of $227.1 million.

The Corporation originates and sells home equity loans. 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 2000 and 1999.

The growth in the Corporations domestic other consumer loans
was offset by the securitization of $1.6 billion of domestic other consumer
loans in 2000. The Corporation securitized domestic other consumer loans of
$1.0 billion in 1999.

Foreign loan receivables increased $680.6 million to $3.1 billion at December
31, 2000, as compared to $2.4 billion at December 31, 1999, and $1.5 billion at
December 31, 1998. The growth in foreign loan receivables was a result of
marketing programs at the Corporations two foreign bank subsidiaries, MBNA
Europe and MBNA Canada. In addition, MBNA Europe reduced rates offered on their loan
products to attract and retain Customers and grow loan receivables during 2000.
The Corporation securitized $1.7 billion of foreign credit card loan
receivables in 2000 and $1.5 billion of foreign credit card loan receivables
in 1999. During 2000, $301.4 million of previously securitized foreign credit
card loans amortized back into the Corporations loan portfolio.

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

CROSS-BORDER OUTSTANDINGS

The Corporation periodically holds cross-border outstandings, which are
generally interest-earning time deposits in other banks. At December 31, 2000,
the Corporation had cross-border outstandings in excess of 1% of total
consolidated assets in the United Kingdom ($529.5 million). At December 31,
1999, the Corporation had cross-border outstandings in excess of 1% of total
consolidated assets in the United Kingdom ($696.1 million). At December 31,
1998, the Corporation had cross-border outstandings in excess of 1% of total
consolidated assets in the United Kingdom ($358.7 million), in Germany ($402.8
million), and in Canada ($325.9 million). The Corporation does not have
significant local currency outstandings in these countries that are not hedged
or funded by local currency borrowings. The cross-border outstandings in the
above countries are primarily short-term in nature.

DEPOSITS

Total interest expense on deposits was $1.3 billion for 2000, compared to
$919.4 million and $816.1 million for 1999 and 1998, respectively. The increase
in interest expense on deposits of $341.1 million 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 Federal Reserve Board during 2000 and 1999. The increase
in interest expense on deposits of $103.3 million during 1999 was primarily the
result of a $2.9 billion increase in average interest-bearing deposits, offset
by a 44 basis point decrease in the rate paid on average interest-bearing
deposits.

The increases in average interest-bearing deposits for 2000 and 1999 were a
result of the Corporations continued emphasis on marketing domestic
certificates of deposit and money market deposit accounts to members of certain
affinity groups, 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.

36



---



MBNA CORPORATION AND SUBSIDIARIES



---

BORROWED FUNDS

Interest expense on short-term borrowings decreased to $34.2 million for 2000,
compared to $36.3 million and $26.0 million for 1999 and 1998, respectively.
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. The increase in interest expense on short-term
borrowings for 1999 was primarily
the result of an increase in average short-term borrowings of $215.9 million
from 1998, offset by a 34 basis point decrease in the rate paid on average
short-term borrowings. The increase in average short-term borrowings in 1999
was to provide funding for the Corporations short-term liquidity needs.

Note H 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 increased to $397.0 million
for 2000, as compared to $372.7 million for 1999 and $381.7 million for 1998.
The increase in interest expense on long-term debt and bank notes during 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 decrease in
interest expense on long-term debt and bank notes for 1999 was primarily a
result of a 26 basis point decline in the rate paid on average long-term debt
and bank notes, as the rate on the Corporations variable-rate long-term debt
and bank notes decreased as a result of lower market rates. Also, the
Corporation replaced maturing higher rate long-term debt and bank notes with
lower rate long-term debt and bank notes during 1999. The decrease in interest
expense in 1999 was offset by a $101.2 million increase in average long-term
debt and bank notes as the Corporations foreign bank subsidiaries issued
additional long-term debt and bank notes.

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

OTHER OPERATING INCOME

Total other operating income increased 21.0% or $885.4 million
to $5.1 billion for 2000 from 1999. The increase in other operating income was
primarily attributable to a $639.4 million or 17.6% 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 increased 45.1% to
$289.5 million for 2000 from 1999. The increase in credit card fees for 2000
was a result of the growth in the Corporations outstanding loan receivables,
accounts, and the number of fees assessed. Also, loan servicing fees related to
securitized loans, 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.

|Total other operating income increased 30.3% or $978.9 million to $4.2 billion
for 1999 from 1998. The increase in other operating income during 1999 was
primarily attributable to a $799.0 million or 28.1% increase in securitization
income, which grew to $3.6 billion.
The increase in securitization income was the result of an $8.7 billion or
21.3% increase in average securitized loans to $49.7 billion from 1998, in
addition to a decline in the average rate paid to investors in the
Corporations securitized loans. Also, 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, loan servicing fees related to
securitized loans, credit card fees, and other income increased in 1999 as
compared to 1998. | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

Included in securitization income is the net incremental change
in the interest-only strip receivable the Corporation recognizes
from the securitization of loans in accordance with Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities (Statement No. 125). The
Corporation uses certain key assumptions and estimates in determining the
interest-only strip receivable related to the Corporations securitization
activities. These key assumptions and estimates include projections concerning
the annual percentage rates charged to Customers, late fee yields, charge-off
experience, contractual servicing fees, and cost of funds, which are used to
determine the excess spread to be received by the Corporation. Other key
assumptions and estimates used by the Corporation include loan payment rates,
which are used to determine the estimated life of the securitized loan, and a
discount rate commensurate with the risks involved. 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 $41.6 million increase
in 2000, a $23.3 million increase in 1999, and a $17.9 million increase in
1998. The Corporation periodically reviews the key assumptions and estimates
used in determining the interest-only strip receivable. If these assumptions
change or are not met, securitization income would be affected.

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.

Insurance income increased $25.5 million to $85.1 million for 2000, as compared
to a decrease of $19.3 million to $59.6 million for 1999. The Corporation
suspended marketing new automobile insurance policies through its underwriter
in July 1998. During 1999, the Corporation began marketing automobile insurance
to the Corporations Customers underwritten by American International Group,
Inc.

37



---





---

Interchange income also increased $65.9 million to $286.2 million for 2000 from
1999, as compared to an increase of $81.9 million during 1999. The increases in
interchange income in 2000 and 1999 are a result of the increases in cardholder
sales volume in addition to an increase in the interchange rates set by
MasterCard International Inc. and Visa U.S.A., Inc. in April 1999.

Other income increased to $149.8 million for 2000, as compared
to $85.2 million and $37.6 million for 1999 and 1998, respectively. The
increase in other income for 2000 was primarily a result of
the Corporation receiving incentive payments from MasterCard International Inc.
and Visa U.S.A., Inc. for meeting certain incentive targets.

OTHER OPERATING EXPENSE

Total other operating expense increased 18.5% to $3.6 billion for 2000,
compared to an increase of 27.9% to $3.1 billion for 1999. The growth in other
operating expense reflects the Corporations continued investment in
attracting, servicing, and retaining credit card and other consumer loan
Customers. The Corporation added 13.7 million new accounts in 2000, compared to
12.5 million new accounts in 1999 and 9.3 million new accounts in 1998. The Corporation
added 459 new endorsements from organizations during 2000, compared to 400 in
1999 and 475 in 1998. The Corporation also has continued to invest in its other
consumer loan, foreign, and insurance agency businesses.

Salaries and employee benefits increased $249.9 million to $1.5 billion for
2000 and $190.6 million to $1.3 billion for 1999. The increases in salaries and
employee benefits reflects the increased number of people to service the
Corporations higher number of Customers.
At December 31, 2000, the Corporation had approximately 22,700 full-time
equivalent employees, as compared to 19,900 full-time equivalent employees and
16,700 full-time equivalent employees at December 31, 1999 and 1998,
respectively.

The growth in other operating expense for 2000 and 1999 also includes
amortization of intangible assets which increased $102.6 million to $273.2
million for 2000, as compared to an increase of $116.5 million to $170.6
million for 1999. The increase in amortization of intangible assets was the
result of a higher level of intangible assets resulting from the Corporations
loan portfolio acquisitions, including the acquisition of the consumer and
commercial revolving credit loan portfolio from First Union Corporation, the
credit card business of PNC Bank, N.A., and the credit card loan portfolio of
SunTrust Banks. Based on the Corporations portfolio acquisitions in 2000, the
Corporation expects amortization expense related to intangible assets to
increase in 2001.

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

The growth in other operating expense also reflects an increase in loan
receivable fraud losses of $61.4 million to $164.0 million for 2000, as
compared to $102.6 million and $82.0 million for 1999 and 1998, respectively.
The increase in loan receivable fraud losses 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.

INCOME TAXES

The Corporation recognized applicable income taxes of $807.9 million for
2000, compared to $630.5 million for 1999 and $477.8 million for 1998.
This represents an effective tax rate of 38.1% for 2000, 1999, and 1998.
Note S 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 QUALITY

The Corporations loan quality at any time reflects, among other factors, the
quality of the Corporations credit card and other consumer loans, the general
economic conditions, the success of the Corporations collection efforts, and
the seasoning of the Corporations loans. As new loans season, the delinquency
rate on these loans generally rises and then stabilizes.

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.

DELINQUENCIES

An account is contractually delinquent if the minimum payment
is not received by the specified date on the Customers statement. However, the
Corporation generally continues to accrue interest until the loan is either
paid or charged off. Delinquency as a percentage of the Corporations loan
portfolio was 3.89% at December 31, 2000, compared with 3.82% and 3.86% at
December 31, 1999 and 1998, respectively. Table 5 presents the stages of
delinquency of the Corporations loan portfolio, excluding loans held for
securitization. The Corporations delinquency as a percentage of managed loans
was 4.49% at December 31, 2000, compared to 4.45% and 4.62% at December 31,
1999 and 1998, respectively. Without the acceleration of charge-off of some
delinquent accounts as a result of the implementation of the revised FFIEC
policy, delinquency as a percentage of the loan portfolio would have been 4.19%
and delinquency as a percentage of managed loans would have been 4.94% at December 31, 2000.

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, excluding loans held for securitization, are
presented in Table 6. The Corporations total managed other nonperforming loans
as a percentage of ending managed loans was 2.41% at December 31, 2000, as
compared to 2.51% and 2.01% at December 31, 1999 and 1998, respectively.

38



---



MBNA CORPORATION AND SUBSIDIARIES

---

Table 5: Delinquent Loans
(dollars in thousands)

|                                     |                 |       |            |         |         |      |  |      |      |   |           |         |         |  |  |      |      |   |            |         |         |  |  |      |      |  
|------------------------------------ | --------------- | ----- | ---------- | ------- | ------- | ---- |  | ---- | ---- | - | --------- | ------- | ------- |  |  | ---- | ---- | - | ---------- | ------- | ------- |  |  | ---- | ---- | -
|December 31,                         |                 | 2000  |            | 1999    |         | 1998
|                                     |                 |       |            |         |         |     
|Loan portfolio                       |                 | $     | 11,682,904 |         |         |      |  |      |      | $ | 7,971,093 |         |         |  |  |      |      | $ | 11,776,099 |         |         |  |  |     
|                                    
|                                    
|                                    
|                                    
|Loans delinquent:                   
|                                    
|                                    
|                                    
|                                    
|                                     | 30 to 59 days   |       | $          | 176,128 |         |      |  | 1.51 | %    |   | $         | 105,667 |         |  |  | 1.33 | %    |   | $          | 166,352 |         |  |  | 1.41 | %   
|                                    
|                                    
|                                    
|                                    
|                                     | 60 to 89 days   |       |            | 95,859  |         |      |  | .82  |      |   |           | 60,452  |         |  |  | .76  |      |   |            | 93,699  |         |  |  | .80  |     
|                                    
|                                    
|                                    
|                                    
|                                     | 90 or more days |       |            | 182,955 |         |      |  | 1.56 |      |   |           | 138,531 |         |  |  | 1.73 |      |   |            | 194,472 |         |  |  | 1.65 |     
|                                     |                 |       |            |         |         |      |  |      |      |   |           |         |         |  |  |      |      |   |            |         |         |  |  |     
|                                     |                 | Total |            | $       | 454,942 |      |  |      | 3.89 | % |           | $       | 304,650 |  |  |      | 3.82 | % |            | $       | 454,523 |  |  |      | 3.86 | %
|                                     |                 |       |            |         |         |      |  |      |      |   |           |         |         |  |  |      |      |   |            |         |         |  |  |     
|Loans delinquent by geographic area:
|                                    
|                                    
|                                    
|                                    
|                                     | Domestic        |       | $          | 404,390 |         |      |  | 4.30 | %    |   | $         | 271,139 |         |  |  | 4.25 | %    |   | $          | 424,324 |         |  |  | 3.95 | %   
|                                    
|                                    
|                                    
|                                    
|                                     | Foreign         |       |            | 50,552  |         |      |  | 2.23 |      |   |           | 33,511  |         |  |  | 2.11 |      |   |            | 30,199  |         |  |  | 2.89 |     

[Additional columns below]

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

|                                     |                 |       |           |         |         |  |  |      |      |   |           |         |         |  |  |      |      |  
|------------------------------------ | --------------- | ----- | --------- | ------- | ------- |  |  | ---- | ---- | - | --------- | ------- | ------- |  |  | ---- | ---- | -
|December 31,                         |                 | 1997  |           | 1996   
|                                     |                 |       |           |        
|Loan portfolio                       |                 | $     | 8,261,876 |         |         |  |  |      |      | $ | 7,659,078 |        
|                                    
|                                    
|                                    
|                                    
|Loans delinquent:                   
|                                    
|                                    
|                                    
|                                    
|                                     | 30 to 59 days   |       | $         | 125,870 |         |  |  | 1.52 | %    |   | $         | 114,382 |         |  |  | 1.49 | %   
|                                    
|                                    
|                                    
|                                    
|                                     | 60 to 89 days   |       |           | 64,275  |         |  |  | .78  |      |   |           | 52,857  |         |  |  | .69  |     
|                                    
|                                    
|                                    
|                                    
|                                     | 90 or more days |       |           | 134,865 |         |  |  | 1.63 |      |   |           | 107,679 |         |  |  | 1.41 |     
|                                     |                 |       |           |         |         |  |  |      |      |   |           |         |         |  |  |     
|                                     |                 | Total |           | $       | 325,010 |  |  |      | 3.93 | % |           | $       | 274,918 |  |  |      | 3.59 | %
|                                     |                 |       |           |         |         |  |  |      |      |   |           |         |         |  |  |     
|Loans delinquent by geographic area:
|                                    
|                                    
|                                    
|                                    
|                                     | Domestic        |       | $         | 313,467 |         |  |  | 4.09 | %    |   | $         | 269,035 |         |  |  | 3.66 | %   
|                                    
|                                    
|                                    
|                                    
|                                     | Foreign         |       |           | 11,543  |         |  |  | 1.93 |      |   |           | 5,883   |         |  |  | 1.93 |     

NET CREDIT LOSSES

The Corporations policy is to charge off open-end delinquent accounts by the
end of the month in which the account becomes 180 days contractually past due,
closed-end 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. The Corporation sells charged-off receivables and records the
proceeds received from these sales as recoveries, thereby reducing net credit
losses.

Net credit losses during 2000 were $442.1 million, compared to $379.5 million
for 1999 and $285.4 million for 1998. Net credit losses do not include credit
losses from securitized loans, which are charged to the related trusts in
accordance with their respective contractual agreements. 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. The net credit losses for 2000 and 1999 also reflect
increases in the Corporations outstanding loan receivables, the general
economic conditions, and the seasoning of the Corporations accounts, offset by
recoveries from the sale of charged-off receivables.

Net credit losses as a percentage of average loan receivables were 2.49% for
the year ended December 31, 2000, compared to 2.63% for 1999 and 2.39% for
1998. The Corporations managed net credit losses as a percentage of average
managed loans for the year ended December 31, 2000 were 4.39%, compared to
4.33% and 4.31% for 1999 and 1998, respectively. 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 2.14% and managed net credit losses as a percentage
of average managed loans would have been 3.94% for the year ended December 31,
2000.

RESERVE AND PROVISION FOR POSSIBLE CREDIT LOSSES

The loan portfolio is regularly reviewed to determine an appropriate reserve
for possible credit losses based upon the impact of economic conditions on the
borrowers ability to repay, past collection experience, the risk
characteristics of the portfolio, and other factors. A provision is charged
against earnings to maintain the reserve at an appropriate level. The provision
for possible credit losses for the year ended December 31, 2000 was $409.0
million, compared to $408.9 million in 1999 and $310.0 million in 1998.

The Corporation records acquired reserves for current period loan portfolio
acquisitions. During 2000, the Corporation recorded $64.7 million of reserves
acquired in connection with the acquisition of the consumer and commercial
revolving credit loan portfolio from First Union Corporation and other loan
portfolios. In 1999, the Corporation recorded $109.8 million of reserves
acquired 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: Other Nonperforming Loans
(dollars in thousands)

|                                                          |                                 |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |        |        | 
|--------------------------------------------------------- | ------------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- |  | - | ------ | ------ | 
|December 31,                                              |                                 | 2000 |         | 1999    |  | 1998 |         | 1997    |  | 1996
|                                                         
|Nonaccrual loans                                          |                                 | $    | 22,574  |         |  | $    | 12,245  |         |  | $    | 3,182   |         |  | $ | 2,520   |         |  | $ | 1,820  |       
|                                                         
|                                                         
|                                                         
|                                                         
|Reduced-rate loans                                        |                                 |      | 238,747 |         |  |      | 153,082 |         |  |      | 157,737 |         |  |   | 114,218 |         |  |   | 72,134 |       
|                                                          |                                 |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |        |       
|                                                          | Total other nonperforming loans |      | $       | 261,321 |  |      | $       | 165,327 |  |      | $       | 160,919 |  |   | $       | 116,738 |  |   | $      | 73,954 | 
|                                                          |                                 |      |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |        |       
|Other nonperforming loans as a % of ending loan portfolio |                                 |      | 2.24    | %       |  |      | 2.07    | %       |  |      | 1.37    | %       |  |   | 1.41    | %       |  |   | .97    | %     
|                                                         

39



---



MBNA CORPORATION AND SUBSIDIARIES

---

Table 7: Reserve for Possible Credit Losses
(dollars in thousands)

|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |          |         |         |          |  
|-------------------------------------------------------------------- | ------------------------------------- | --------- | ---------- | ------------------------------------------ | ------- | ------- | ---------- | -------- | ------- | ------- | ---------- | -------- | ------- | ------- | -------- | -
|December 31,                                                         |                                       | 2000      |            | 1999                                       |         | 1998   
|                                                                     |                                       |           |            |                                            |         |        
|Reserve for possible credit losses, beginning of year                |                                       | $         | 355,959    |                                            |         | $       | 216,911    |          |         | $       | 162,476    |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Reserves acquired                     |           |            | 64,726                                     |         |         |            | 109,757  |         |         |            | 29,932   |        
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Provision for possible credit losses:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           | Domestic   |                                            |         | 359,128 |            |          |         | 380,145 |            |          |         | 292,739 |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           | Foreign    |                                            |         | 49,889  |            |          |         | 28,769  |            |          |         | 17,300  |         
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     |                                       |           |            | Total provision for possible credit losses |         |         | 409,017    |          |         |         | 408,914    |          |         |         | 310,039  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Foreign currency translation          |           |            | (1,081                                     | )       |         |            | (96      | )       |         |            | (125     | )      
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Credit losses:                       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Domestic:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Credit card                                |         |         | (435,134   | )        |         |         | (422,504   | )        |         |         | (330,952 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Other consumer                             |         |         | (138,892   | )        |         |         | (104,268   | )        |         |         | (86,407  | )
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     |                                       |           |            | Total domestic credit losses               |         |         | (574,026   | )        |         |         |            |          |         |         | (526,772 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Foreign   |            |                                            | (72,831 | )       |            |          | (41,157 | )       |            |          | (22,754 | )      
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     |                                       |           |            | Total credit losses                        |         |         | (646,857   | )        |         |         | (567,929   | )        |         |         | (440,113 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Recoveries:                          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Domestic:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Credit card                                |         |         | 158,005    |          |         |         | 147,851    |          |         |         | 133,172  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Other consumer                             |         |         | 21,922     |          |         |         | 21,301     |          |         |         | 12,656   |  
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     |                                       |           |            | Total domestic recoveries                  |         |         | 179,927    |          |         |         | 169,152    |          |         |         | 145,828  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Foreign   |            |                                            | 24,877  |         |            |          | 19,250  |         |            |          | 8,874   |        
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     |                                       |           |            | Total recoveries                           |         |         | 204,804    |          |         |         | 188,402    |          |         |         | 154,702  |  
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|                                                                     | Net credit losses                     |           |            | (442,053                                   | )       |         |            | (379,527 | )       |         |            | (285,411 | )      
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|Reserve for possible credit losses, end of year                      |                                       | $         | 386,568    |                                            |         | $       | 355,959    |          |         | $       | 216,911    |         
|                                                                     |                                       |           |            |                                            |         |         |            |          |         |         |            |         
|Net credit losses as a % of average loan receivables                 |                                       |           | 2.49       | %                                          |         |         | 2.63       | %        |         |         | 2.39       | %       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Net credit losses as a % of beginning reserve                        |                                       |           | 124.19     |                                            |         |         | 174.97     |          |         |         | 175.66     |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Reserve for possible credit losses as a % of ending loan receivables |                                       |           | 1.94       |                                            |         |         | 2.02       |          |         |         | 1.61       |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Ending loan receivables                                              |                                       | $         | 19,954,837 |                                            |         | $       | 17,663,709 |          |         | $       | 13,468,367 |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Average loan receivables                                             |                                       |           | 17,718,148 |                                            |         |         | 14,422,495 |          |         |         | 11,930,289 |         

[Additional columns below]

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

|                                                                     |                                       |           |            |                                            |        |         |            |          |        |         |          |  
|-------------------------------------------------------------------- | ------------------------------------- | --------- | ---------- | ------------------------------------------ | ------ | ------- | ---------- | -------- | ------ | ------- | -------- | -
|December 31,                                                         |                                       | 1997      |            | 1996                                      
|                                                                     |                                       |           |            |                                           
|Reserve for possible credit losses, beginning of year                |                                       | $         | 118,427    |                                            |        | $       | 104,886    |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Reserves acquired                     |           |            | 7,975                                      |        |         |            | 7,553    |       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Provision for possible credit losses:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           | Domestic   |                                            |        | 255,278 |            |          |        | 174,069 |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           | Foreign    |                                            |        | 4,762   |            |          |        | 4,155   |         
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     |                                       |           |            | Total provision for possible credit losses |        |         | 260,040    |          |        |         | 178,224  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Foreign currency translation          |           |            | (203                                       | )      |         |            | 488      |       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Credit losses:                       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Domestic:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Credit card                                |        |         | (294,608   | )        |        |         | (226,067 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Other consumer                             |        |         | (57,970    | )        |        |         | (23,504  | )
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     |                                       |           |            | Total domestic credit losses               |        |         | (417,359   | )        |        |         | (249,571 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Foreign   |            |                                            | (6,964 | )       |            |          | (4,846 | )      
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     |                                       |           |            | Total credit losses                        |        |         | (359,542   | )        |        |         | (254,417 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Recoveries:                          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Domestic:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Credit card                                |        |         | 126,012    |          |        |         | 76,605   |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       |           |            | Other consumer                             |        |         | 7,555      |          |        |         | 4,438    |  
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     |                                       |           |            | Total domestic recoveries                  |        |         | 133,567    |          |        |         | 81,043   |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |                                       | Foreign   |            |                                            | 2,212  |         |            |          | 650    |        
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     |                                       |           |            | Total recoveries                           |        |         | 135,779    |          |        |         | 81,693   |  
|                                                                     |                                       |           |            |                                            |        |         |            |         
|                                                                     | Net credit losses                     |           |            | (223,763                                   | )      |         |            | (172,724 | )     
|                                                                     |                                       |           |            |                                            |        |         |            |         
|Reserve for possible credit losses, end of year                      |                                       | $         | 162,476    |                                            |        | $       | 118,427    |         
|                                                                     |                                       |           |            |                                            |        |         |            |         
|Net credit losses as a % of average loan receivables                 |                                       |           | 2.14       | %                                          |        |         | 1.98       | %       
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Net credit losses as a % of beginning reserve                        |                                       |           | 188.95     |                                            |        |         | 164.68     |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Reserve for possible credit losses as a % of ending loan receivables |                                       |           | 1.46       |                                            |        |         | 1.17       |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Ending loan receivables                                              |                                       | $         | 11,162,074 |                                            |        | $       | 10,129,052 |         
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Average loan receivables                                             |                                       |           | 10,438,513 |                                            |        |         | 8,703,579  |         

---

Table 7 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. 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 were recorded as a reduction to the reserve for
possible credit losses. The incremental securitized loan charge-offs were
already included by the Corporation in determining the interest-only strip
receivable.

Table 8: Allocation of Reserve for Possible Credit Losses
(dollars in thousands)

|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |       |         |         |  |     |      |       |  
|------------ | -------------- | ------------------------------------------- | ------ | ------- | ------- | ---- | --- | ---- | ----- | - | ------ | ------- | ------- |  | --- | ---- | ----- | - | ----- | ------- | ------- |  | --- | ---- | ----- | -
|December 31, |                | 2000                                        |        | 1999    |         | 1998
|             |                |                                             |        |         |         |     
|Domestic:   
|            
|            
|            
|            
|             | Credit card    |                                             | $      | 279,587 |         |      |     | 72.3 | %     |   | $      | 287,767 |         |  |     | 80.9 | %     |   | $     | 152,405 |         |  |     | 70.3 | %    
|            
|            
|            
|            
|             | Other consumer |                                             |        | 89,607  |         |      |     | 23.2 |       |   |        | 51,672  |         |  |     | 14.5 |       |   |       | 54,752  |         |  |     | 25.2 |      
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |       |         |         |  |     |     
|             |                | Domestic reserve for possible
credit losses |        |         | 369,194 |      |     |      | 95.5  |   |        |         | 339,439 |  |     |      | 95.4  |   |       |         | 207,157 |  |     |      | 95.5  |  
|            
|            
|            
|            
|Foreign      |                |                                             | 17,374 |         |         |      | 4.5 |      |       |   | 16,520 |         |         |  | 4.6 |      |       |   | 9,754 |         |         |  | 4.5 |     
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |       |         |         |  |     |     
|             |                | Reserve for possible credit losses          |        | $       | 386,568 |      |     |      | 100.0 | % |        | $       | 355,959 |  |     |      | 100.0 | % |       | $       | 216,911 |  |     |      | 100.0 | %
|             |                |                                             |        |         |         |      |     |      |       |   |        |         |         |  |     |      |       |   |       |         |         |  |     |     

[Additional columns below]

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

|             |                |                                             |       |         |         |  |     |      |       |   |       |        |         |  |     |      |       |  
|------------ | -------------- | ------------------------------------------- | ----- | ------- | ------- |  | --- | ---- | ----- | - | ----- | ------ | ------- |  | --- | ---- | ----- | -
|December 31, |                | 1997                                        | 1996 
|             |                |                                             |       |        
|Domestic:   
|            
|            
|            
|            
|             | Credit card    |                                             | $     | 134,910 |         |  |     | 83.0 | %     |   | $     | 95,253 |         |  |     | 80.4 | %    
|            
|            
|            
|            
|             | Other consumer |                                             |       | 23,031  |         |  |     | 14.2 |       |   |       | 18,446 |         |  |     | 15.6 |      
|             |                |                                             |       |         |         |  |     |      |       |   |       |        |         |  |     |     
|             |                | Domestic reserve for possible
credit losses |       |         | 157,941 |  |     |      | 97.2  |   |       |        | 113,699 |  |     |      | 96.0  |  
|            
|            
|            
|            
|Foreign      |                |                                             | 4,535 |         |         |  | 2.8 |      |       |   | 4,728 |        |         |  | 4.0 |     
|             |                |                                             |       |         |         |  |     |      |       |   |       |        |         |  |     |     
|             |                | Reserve for possible credit losses          |       | $       | 162,476 |  |     |      | 100.0 | % |       | $      | 118,427 |  |     |      | 100.0 | %
|             |                |                                             |       |         |         |  |     |      |       |   |       |        |         |  |     |     

40



---



MBNA CORPORATION AND SUBSIDIARIES



---

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, 2000 and 1999, 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 9,
have been computed in accordance with regulatory accounting practices.

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. In January 1999, the Corporation
issued 50 million shares of common stock, raising $1.2 billion of capital, net
of issuance costs. The Corporation contributed $300.0 million
of the net proceeds from this offering to the Bank to complete the acquisition
of the credit card business of PNC Bank, N.A. The Corporation used the
remaining proceeds from both common
stock offerings for other general corporate purposes.

The Corporation has different capital securities in its overall capital
structure to meet its regulatory capital needs. At December 31, 2000 and 1999,
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,
2000 and 1999. These notes mature in 2002 and 2008. The Corporation also had
4.5 million shares of 7 1/2% 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, 2000 and 1999.

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 guidelines and enhance the
Corporations regulatory capital. The Banks subordinated notes qualify as
regulatory capital under 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.

The shares of the Series A Preferred Stock are redeemable, in
whole or in part, solely at the option of the Corporation on or after January
15, 2001, while the shares of the Series B Preferred Stock are redeemable, in
whole or in part, solely at the option of the Corporation on or after October
15, 2001. The Series B Preferred Stock may also be redeemed in whole at the
option of the Corporation in the event of certain amendments to the Internal
Revenue Code of 1986 with respect to the dividends-received deduction. 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.

Table 9: Regulatory Capital Ratios

|                            |          |      |       |       |  |              |       |              |   |  |         |      |                  |  |    |       |  
|--------------------------- | -------- | ---- | ----- | ----- |  | ------------ | ----- | ------------ | - |  | ------- | ---- | ---------------- |  | -- | ----- | -
|                            |          |      |       |       |  |              |       |              |   |  | Minimum |      | Well-Capitalized
|December 31,                |          | 2000 |       | 1999  |  | Requirements |       | Requirements
|                            |          |      |       |       |  |              |       |             
|MBNA Corporation
Tier 1     |          |      | 14.98 | %     |  |              | 14.72 | %            |   |  | 4.00    | %    |                  |  | (a | )    
|                           
|                           
|                           
|                           
|                            | Total    |      |       | 16.61 |  |              |       | 17.02        |   |  |         | 8.00 |                  |  |    | (a    | )
|                           
|                           
|                           
|                           
|                            | Leverage |      |       | 17.30 |  |              |       | 14.90        |   |  |         | 4.00 |                  |  |    | (a    | )
|                           
|                           
|                           
|                           
|MBNAAmerica Bank, N.A      
|                           
|                           
|                           
|                           
|                            | Tier 1   |      |       | 10.78 |  |              |       | 11.06        |   |  |         | 4.00 |                  |  |    | 6.00  | %
|                           
|                           
|                           
|                           
|                            | Total    |      |       | 12.44 |  |              |       | 13.44        |   |  |         | 8.00 |                  |  |    | 10.00 |  
|                           
|                           
|                           
|                           
|                            | Leverage |      |       | 12.79 |  |              |       | 11.61        |   |  |         | 4.00 |                  |  |    | 5.00  |  
|                           
|                           
|                           
|                           
|MBNAAmerica (Delaware), N.A
|                           
|                           
|                           
|                           
|                            | Tier 1   |      |       | 20.88 |  |              |       | (b           | ) |  |         | 4.00 |                  |  |    | 6.00  |  
|                           
|                           
|                           
|                           
|                            | Total    |      |       | 21.84 |  |              |       | (b           | ) |  |         | 8.00 |                  |  |    | 10.00 |  
|                           
|                           
|                           
|                           
|                            | Leverage |      |       | 62.74 |  |              |       | (b           | ) |  |         | 4.00 |                  |  |    | 5.00  |  



---

|(a) |  | Not applicable for bank holding companies.                                                                            
|--- |  | ----------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | The capital ratios of MBNA America (Delaware), N.A. are not presented for 1999 due to the immateriality of its assets.

41



---



Note N 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 outstanding 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 2000, the Corporation declared dividends
on its preferred stock of $14.7 million and $264.6 million on its common stock.

On January 10, 2001, the Corporations Board of Directors declared a quarterly
dividend of $.09 per common share, payable April 1, 2001 to stockholders of
record as of March 15, 2001. Also, on January 10, 2001, the Corporations Board
of Directors declared a quarterly dividend of $.46875 per share on the 7 1/2%
Cumulative Preferred Stock, Series A, and a quarterly dividend of $.3527 per
share on the Adjustable Rate Cumulative Preferred Stock, Series B. The
preferred stock dividends are payable April 16, 2001 to stockholders of record
as of March 31, 2001.

Table 10 reflects the Corporations return on average total assets
and stockholders equity and other equity ratios, including the Corporations
dividend payout ratio.

Table 10: Return on Average Total Assets and Stockholders Equity

|                                                     |  |      |       |      |  |      |       |   |  |  |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|Year Ended December 31,                              |  | 2000 |       | 1999 |  | 1998
|                                                     |  |      |       |      |  |     
|Return on average total assets                       |  |      | 3.94  | %    |  |      | 3.62  | % |  |  | 3.38  | %
|                                                    
|                                                    
|                                                    
|                                                    
|Return on average stockholders equity               |  |      | 25.79 |      |  |      | 27.18 |   |  |  | 36.91 |  
|                                                    
|                                                    
|                                                    
|                                                    
|Average stockholders equity to average total assets |  |      | 15.28 |      |  |      | 13.32 |   |  |  | 9.15  |  
|                                                    
|                                                    
|                                                    
|                                                    
|Dividend payout ratio                                |  |      | 20.92 |      |  |      | 23.14 |   |  |  | 24.74 |  

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, 2000, the amount of retained earnings
available for declaration and payment of dividends from the Bank
to the Corporation was $1.8 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, 2000. If this facility had been drawn
upon as of December 31, 2000, the amount of retained earnings available for
declaration of dividends would have been further limited to $685.6 million.

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, deposits mature, and payments on 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 loans, deposits, and other assets and liabilities. This process is also
affected by changes in the relationship between short-term and long-term
interest rates.



42



---



MBNA CORPORATION AND SUBSIDIARIES



---

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. In addition, further liquidity is
provided to the Corporation through committed credit facilities.

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 four-year revolving credit facility 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 four-year $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 credit card receivables 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, 2000.

Additional funding programs established by the Corporation include medium-term
notes and senior notes. At December 31, 2000, the Corporation had $1.0 billion
in Senior Medium-Term Notes outstanding that mature in varying amounts from
2001 to 2004, as compared to $1.4 billion at December 31, 1999. In addition,
the Corporation had $100.0 million in Senior Notes outstanding at December 31,
2000 and 1999 that mature in 2005. The Corporation expects to pay the interest
on both the Senior Medium-Term Notes and Senior Notes from dividend and other
payments received from the Bank.

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

Total deposits at December 31, 2000 were $24.3 billion, compared to $18.7
billion and $15.4 billion at December 31, 1999 and 1998, respectively. 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 increase in
deposits from 1998 was the result of a $1.4 billion increase in direct deposits
and a $1.9 billion increase in other deposits. Other deposits are deposits
generally obtained through the use of a third-party intermediary. The
Corporation increased its use of other deposits as a cost-effective funding
source. The increases in direct deposits were primarily the result of the
Corporations emphasis on marketing its deposit products and offering
competitive rates. Table 11 provides the maturities of the Corporations
deposits at December 31, 2000. Included in the deposit maturity category of
three months or less are money market deposit accounts, noninterest-bearing
demand deposits, interest-bearing transaction accounts, and savings accounts
totaling $5.9 billion.

Table 11: Maturities of Deposits
(dollars in thousands)

|                                        |                |        |           |            |  |       |           |           |  |   |           |            | 
|--------------------------------------- | -------------- | ------ | --------- | ---------- |  | ----- | --------- | --------- |  | - | --------- | ---------- | 
|December 31, 2000                       |                | Direct |           | Other      |  | Total
|                                        |                |        |           |            | 
|Three months or less                    |                | $      | 7,330,954 |            |  | $     | 1,261,294 |           |  | $ | 8,592,248 |           
|                                       
|                                       
|                                       
|                                       
|Over three months through
twelve months |                |        | 4,203,042 |            |  |       | 1,852,593 |           |  |   | 6,055,635 |           
|                                       
|                                       
|                                       
|                                       
|Over one year through
five years        |                |        | 4,630,497 |            |  |       | 5,059,859 |           |  |   | 9,690,356 |           
|                                       
|                                       
|                                       
|                                       
|Over five years                         |                |        | 5,356     |            |  |       |          |           |  |   | 5,356     |           
|                                        |                |        |           |            |  |       |           |           |  |   |           |           
|                                        | Total deposits |        | $         | 16,169,849 |  |       | $         | 8,173,746 |  |   | $         | 24,343,595 | 
|                                        |                |        |           |            |  |       |           |           |  |   |           |           

In addition, Table 12 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 $853.6 million of foreign time deposits and
$113.6 million of foreign noninterest-bearing demand deposits at December 31,
2000. 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 2000, the Bank issued $635.0
million of bank notes, compared to $315.0 million in 1999. At December 31, 2000
and 1999, the Bank had $2.4 billion of bank notes outstanding which are
included in long-term borrowings.

MBNA Europe had £203.5 million (approximately $303.5 million), EUR315.5 million
(approximately $293.6 million), HKD300.0 million (approximately $38.4 million),
JPY12.5 billion (approximately $108.8 million), and $25.0 million Euro
Medium-Term Notes

Table 12: Domestic Time Deposits of $100,000 or
More
(dollars in thousands)

|                                      |       |      |           |           |  |  |      |       |   |      |         |           |  |  |      |       |   |   |         |           |  |  |      |       |  
|------------------------------------- | ----- | ---- | --------- | --------- |  |  | ---- | ----- | - | ---- | ------- | --------- |  |  | ---- | ----- | - | - | ------- | --------- |  |  | ---- | ----- | -
|December 31,                          |       | 2000 |           | 1999      |  |  |      |       |   | 1998
|                                      |       |      |           |           |  | 
|Three months or less                  |       | $    | 503,160   |           |  |  | 17.7 | %     |   | $    | 438,018 |           |  |  | 20.5 | %     |   | $ | 448,223 |           |  |  | 23.3 | %    
|                                     
|                                     
|                                     
|                                     
|Over three months through six months  |       |      | 580,873   |           |  |  | 20.5 |       |   |      | 429,521 |           |  |  | 20.1 |       |   |   | 356,045 |           |  |  | 18.6 |      
|                                     
|                                     
|                                     
|                                     
|Over six months through twelve months |       |      | 676,613   |           |  |  | 23.8 |       |   |      | 618,406 |           |  |  | 29.0 |       |   |   | 483,843 |           |  |  | 25.2 |      
|                                     
|                                     
|                                     
|                                     
|Over twelve months                    |       |      | 1,078,286 |           |  |  | 38.0 |       |   |      | 649,351 |           |  |  | 30.4 |       |   |   | 632,533 |           |  |  | 32.9 |      
|                                      |       |      |           |           |  |  |      |       |   |      |         |           |  |  |      |       |   |   |         |           |  |  |      |      
|                                      | Total |      | $         | 2,838,932 |  |  |      | 100.0 | % |      | $       | 2,135,296 |  |  |      | 100.0 | % |   | $       | 1,920,644 |  |  |      | 100.0 | %
|                                      |       |      |           |           |  |  |      |       |   |      |         |           |  |  |      |       |   |   |         |           |  |  |      |      

43



---



MBNA CORPORATION AND SUBSIDIARIES

---

outstanding at December 31, 2000. MBNA Europe had £165.0
million (approximately $266.6 million), EUR165.5 million (approximately $166.2
million), and $10.0 million Euro Medium-Term Notes outstanding at December 31,
1999. These notes are unconditionally and irrevocably guaranteed in respect to
all payments by the Bank.

MBNA Canada had CAD$190.0 million (approximately $126.9 million) of short-term
deposit notes outstanding at December 31, 2000. In addition, MBNA Canada had
CAD$570.1 million (approximately $380.7 million) of Medium-Term Deposit Notes
outstanding at December 31, 2000. MBNA Canada had CAD$217.3 million
(approximately $149.6 million) of short-term deposit notes outstanding and
CAD$290.1 million (approximately $199.7 million) of Medium-Term Deposit Notes
outstanding at December 31, 1999. The deposit notes are unconditionally and
irrevocably guaranteed as to payment of principal and interest by the Bank.

MBNA Europe arranged a £325.0 million (approximately $484.7 million at December
31, 2000) 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
replaced MBNA Europes prior £300.0 million multi-currency revolving credit
facility. 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, 2000.

MBNA Canada has a CAD$300.0 million (approximately $200.3 million at December
31, 2000) multi-currency syndicated revolving credit facility committed through
December 2001 and a CAD$50.0 million (approximately $33.4 million at December
31, 2000) credit facility committed through March 2001. 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 as of December 31, 2000.



The Corporation also held $3.1 billion in investment securities and $2.2
billion of money market instruments at December 31, 2000, compared to $3.0
billion in investment securities and $1.5 billion in money market instruments
at December 31, 1999. 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, 2000,
$1.7 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 variable-rate securities, was $2.7
billion at December 31, 2000, compared to $2.8 billion at December 31, 1999.
These investment securities, along with the money market instruments, provide
increased liquidity and flexibility to support the Corporations funding
requirements.

INTEREST RATE SENSITIVITY

Interest rate sensitivity refers to the change in earnings resulting from
fluctuations in interest rates, variability in spread relationships, and the
differences in repricing intervals between assets and liabilities. 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.

The Corporation analyzes its level of interest rate risk using several
analytical techniques, which include the impact of on-balance-sheet financial
instruments. 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 13. 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,
2000, variable-rate loans made up 8.8% of total managed loans, compared to
12.4% of total managed loans at December 31, 1999. These variable-rate loans
are generally indexed to the U.S. Prime Rate published in The Wall Street
Journal 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

44



---



MBNA CORPORATION AND SUBSIDIARIES



---

Table 13: Interest Rate Sensitivity Schedule

(dollars in thousands)

|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |           |            |            | 
|------------------------------------------------------------------- | ------------------------------ | ------------------------------------- | --------------------------------------------------- | --------- | ------------- | ---------- | ---------- | --------- | ------------- | ---------- | -------- | ------- | ------- | ------- | ---------- | --------- | ---------- | ---------- | 
|December 31, 2000                                                   |                                | Subject to Repricing                 
|                                                                    |                                |                                      
|                                                                    |                                |                                       |                                                     |           | Within 1 Year |            | 1-5 Years  |           | After 5 Years |            | Total   
|Interest-Earning Assets                                            
|Interest-earning time deposits in other banks:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic                       |                                       | $                                                   | 1,516     |               |            | $          | 45        |               |            | $        |        |         |         | $          | 1,561     |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 1,503,770 |               |            |            |          |               |            |          |        |         |         |            | 1,503,770 |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total interest-earning time deposits in other banks |           |               | 1,505,286  |            |           |               | 45         |          |         |         |        |            |           |            | 1,505,331  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Federal funds sold and securities purchased under resale agreements |                                |                                       | 700,000                                             |           |               |            |           |           |               |            |         |         |         |         | 700,000    |          
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Investment securities (a):                                         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Available-for-sale             |                                       |                                                     | 2,153,812 |               |            |            | 512,384   |               |            |          |        |         |         |            | 2,666,196 |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Held-to-maturity               |                                       |                                                     | 1,010     |               |            |            | 11,252    |               |            |          | 371,826 |         |         |            | 384,088   |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans held for securitization:                                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic                       |                                       |                                                     | 7,419,408 |               |            |            |          |               |            |          |        |         |         |            | 7,419,408 |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 852,525   |               |            |            |          |               |            |          |        |         |         |            | 852,525   |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total loans held for securitization                 |           |               | 8,271,933  |            |           |               |           |          |         |         |        |            |           |            | 8,271,933  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans:                                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Credit card                           |                                                     |           | 5,206,760     |            |            |           | 1,406,153     |            |          |         |        |         |            |           | 6,612,913  |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Other consumer                        |                                                     |           | 1,866,522     |            |            |           | 662,084       |            |          |         | 270,683 |         |            |           | 2,799,289  |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total domestic loans                                |           |               | 7,073,282  |            |           |               | 2,068,237  |          |         |         | 270,683 |            |           |            | 9,412,202  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign                        |                                       |                                                     | 1,234,939 |               |            |            | 1,035,763 |               |            |          |        |         |         |            | 2,270,702 |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total loans                                         |           |               | 8,308,221  |            |           |               | 3,104,000  |          |         |         | 270,683 |            |           |            | 11,682,904 | 
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total interest-earning assets                       |           |               | 20,940,262 |            |           |               | 3,627,681  |          |         |         | 642,509 |            |           |            | 25,210,452 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest-Bearing
Liabilities                                       
|Interest-bearing deposits:                                         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Domestic:                     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Time deposits                         |                                                     |           | 7,919,126     |            |            |           | 9,690,106     |            |          |         | 5,356   |         |            |           | 17,614,588 |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Money market deposit accounts         |                                                     |           | 4,922,027     |            |            |           |              |            |          |         |        |         |            |           | 4,922,027  |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Interest-bearing transaction accounts |                                                     |           | 50,475        |            |            |           |              |            |          |         |        |         |            |           | 50,475     |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Savings accounts                      |                                                     |           | 9,969         |            |            |           |              |            |          |         |        |         |            |           | 9,969      |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total domestic interest-bearing deposits            |           |               | 12,901,597 |            |           |               | 9,690,106  |          |         |         | 5,356   |            |           |            | 22,597,059 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Foreign:                      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Time deposits                         |                                                     |           | 853,306       |            |            |           | 250           |            |          |         |        |         |            |           | 853,556    |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total interest-bearing deposits                     |           |               | 13,754,903 |            |           |               | 9,690,356  |          |         |         | 5,356   |            |           |            | 23,450,615 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Borrowed funds:                                                    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Short-term borrowings:        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Domestic                              |                                                     |           | 33,419        |            |            |           |              |            |          |         |        |         |            |           | 33,419     |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Foreign                               |                                                     |           | 126,093       |            |            |           |              |            |          |         |        |         |            |           | 126,093    |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total short-term borrowings                         |           |               | 159,512    |            |           |               |           |          |         |         |        |            |           |            | 159,512    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Long-term debt and bank notes:
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Domestic                              |                                                     |           | 2,256,329     |            |            |           | 1,684,388     |            |          |         | 534,196 |         |            |           | 4,474,913  |           
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                | Foreign                               |                                                     |           | 1,064,923     |            |            |           | 195,799       |            |          |         |        |         |            |           | 1,260,722  |           
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total long-term debt and bank notes                 |           |               | 3,321,252  |            |           |               | 1,880,187  |          |         |         | 534,196 |            |           |            | 5,735,635  | 
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total borrowed funds                                |           |               | 3,480,764  |            |           |               | 1,880,187  |          |         |         | 534,196 |            |           |            | 5,895,147  | 
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|                                                                    |                                |                                       | Total interest-bearing liabilities                  |           |               | 17,235,667 |            |           |               | 11,570,543 |          |         |         | 539,552 |            |           |            | 29,345,762 | 
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|Gap before managed adjustments                                      |                                |                                       | 3,704,595                                           |           |               |            | (7,942,862 | )         |               |            | 102,957  |         |         |         | (4,135,310 | )        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Managed adjustments (b)                                             |                                |                                       | (11,483,013                                         | )         |               |            | 15,220,712 |           |               |            | (420,125 | )       |         |         | 3,317,574  |          
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|Gap after managed adjustments                                       |                                | $                                     | (7,778,418                                          | )         |               | $          | 7,277,850  |           |               | $          | (317,168 | )       |         | $       | (817,736   | )        
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |         |         |         |            |          
|Cumulative gap after managed adjustments                            |                                | $                                     | (7,778,418                                          | )         |               | $          | (500,568   | )         |               | $          | (817,736 | )      
|                                                                    |                                |                                       |                                                     |           |               |            |            |           |               |            |          |        
|Cumulative gap after managed adjustments as a % of managed assets   |                                |                                       | (7.23                                               | )%        |               |            | (.47       | )%        |               |            | (.76     | )%     



---

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

45



---





---

analytical techniques, including simulation
analysis. All of the analytical techniques used by the Corporation to measure
interest rate risk include the impact of on-balance-sheet and off-balance-sheet
financial instruments.

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. 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.

Based on the simulation analysis at December 31, 2000, the Corporation could
experience a decrease in projected 2001 net income of approximately $46
million, as compared to a decrease of approximately $36 million in projected
2000 net income based on the simulation analysis at December 31, 1999, if
interest rates at
the time the simulation analysis was performed increased 100 basis points over
12 months.

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.

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. The Corporations foreign currency exchange rate risk is limited to the
unhedged portion of the Corporations net investment in its foreign
subsidiaries. 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, 2000, the Corporation could experience a decrease in
stockholders equity, net of tax, of approximately $41 million as compared to a
decrease of approximately $33 million in stockholders equity, net of tax, at
December 31, 1999, 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 does not have any other off-balance-sheet financial
instruments.

Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (Statement No. 133), established
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and hedging
activities. In June 1999, 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), was issued and
extended the effective date for Statement No. 133 to all fiscal quarters of all
fiscal years beginning after June 15, 2000. In June 2000, the Financial
Accounting Standards Board issued 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).
Statement No. 138 amended the accounting and reporting standards of Statement
No. 133 for certain derivative instruments and certain hedging activities. The
Corporations implementation of Statement No. 133, as amended by Statement No.
137 and Statement No. 138, on January 1, 2001 did not have a material impact on
the Corporations consolidated financial statements.

ASSET SECURITIZATION



|Asset securitization of loan receivables
is accomplished primarily through the public and private issuance of
asset-backed securities. As loan receivables are securitized, the Corporations
on-balance-sheet funding needs are reduced by the amount of loans securitized.Asset securitization involves the sale, generally to a trust, of a pool of loan
receivables. The Corporation continues to own 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 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 



46



---



MBNA CORPORATION AND SUBSIDIARIES



---

Table 14: Securitized Loans Distribution
(dollars in thousands)

|                              |                |                                  |   |            |            |      |   |            |            |      |   |            |            |  |   |            |            |  |   |            |            | 
|----------------------------- | -------------- | -------------------------------- | - | ---------- | ---------- | ---- | - | ---------- | ---------- | ---- | - | ---------- | ---------- |  | - | ---------- | ---------- |  | - | ---------- | ---------- | 
|December 31,                  |                | 2000                             |   | 1999       |            | 1998 |   | 1997       |            | 1996
|                              |                |                                  |   |            |            |      |   |            |            |     
|Securitized Loans
  Domestic:
|                             
|                             
|                             
|                             
|                              | Credit card    |                                  | $ | 57,425,582 |            |      | $ | 45,851,922 |            |      | $ | 39,739,387 |            |  | $ | 34,181,350 |            |  | $ | 25,854,779 |           
|                             
|                             
|                             
|                             
|                              | Other consumer |                                  |   | 5,691,769  |            |      |   | 3,987,180  |            |      |   | 3,007,858  |            |  |   | 2,442,116  |            |  |   | 1,412,435  |           
|                              |                |                                  |   |            |            |      |   |            |            |      |   |            |            |  |   |            |            |  |   |           
|                              |                | Total domestic securitized loans |   |            | 63,117,351 |      |   |            | 49,839,102 |      |   |            | 42,747,245 |  |   |            | 36,623,466 |  |   |            | 27,267,214 | 
|                             
|                             
|                             
|                             
|Foreign:                     
|                             
|                             
|                             
|                             
|                              | Credit card    |                                  |   | 5,650,485  |            |      |   | 4,565,996  |            |      |   | 3,052,070  |            |  |   | 1,594,320  |            |  |   | 1,227,267  |           
|                             
|                             
|                             
|                             
|                              | Other consumer |                                  |   | 68,048     |            |      |   | 186,706    |            |      |   | 373,424    |            |  |   |           |            |  |   |           |           
|                              |                |                                  |   |            |            |      |   |            |            |      |   |            |            |  |   |            |            |  |   |           
|                              |                | Total foreign securitized loans  |   |            | 5,718,533  |      |   |            | 4,752,702  |      |   |            | 3,425,494  |  |   |            | 1,594,320  |  |   |            | 1,227,267  | 
|                              |                |                                  |   |            |            |      |   |            |            |      |   |            |            |  |   |            |            |  |   |           
|                              |                | Total securitized loans          |   | $          | 68,835,884 |      |   | $          | 54,591,804 |      |   | $          | 46,172,739 |  |   | $          | 38,217,786 |  |   | $          | 28,494,481 | 
|                              |                |                                  |   |            |            |      |   |            |            |      |   |            |            |  |   |            |            |  |   |           

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 continues to service the accounts and receives a
servicing fee for doing so.

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 investors 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.

Distribution of principal to investors may begin sooner if the average
annualized yield (generally including interest income, interchange income, 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.

During 2000, the Corporation securitized credit card loan receivables totaling
$14.2 billion, including the securitization of £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. During 1999, the Corporation securitized
credit card loan receivables totaling $12.3 billion, including the
securitization of £750.0 million (approximately $1.2 billion) by MBNA Europe
and CAD$500.0 million (approximately $342.3 million) by MBNA Canada. The
Corporation also securitized other consumer loans totaling $1.0 billion during
1999. The total amount of outstanding securitized loans was $68.8 billion or
77.5% of managed loans as
of December 31, 2000, compared to $54.6 billion or 75.6% at December 31, 1999.
Table 14 shows the Corporations securitized loans distribution.

During 2000, $5.6 billion of previously securitized loans amortized back into
the Corporations loan portfolio or matured, compared to $5.1 billion in 1999.
Table 15 presents the amounts,
at December 31, 2000, 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 which
are subject to change.

Table 15: Amortization of Investor Principal

(dollars in thousands)

|                                                        |                                          |   |            |            | 
|------------------------------------------------------- | ---------------------------------------- | - | ---------- | ---------- | 
|2001                                                    |                                          | $ | 8,560,661  |           
|                                                       
|                                                       
|                                                       
|                                                       
|2002                                                    |                                          |   | 10,582,533 |           
|                                                       
|                                                       
|                                                       
|                                                       
|2003                                                    |                                          |   | 11,380,857 |           
|                                                       
|                                                       
|                                                       
|                                                       
|2004                                                    |                                          |   | 11,332,890 |           
|                                                       
|                                                       
|                                                       
|                                                       
|2005                                                    |                                          |   | 11,170,846 |           
|                                                       
|                                                       
|                                                       
|                                                       
|Thereafter                                              |                                          |   | 14,205,678 |           
|                                                        |                                          |   |            |           
|                                                        | Total amortization of investor principal |   |            | 67,233,465 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Accrued interest and fees included in securitized loans |                                          |   | 1,602,419  |           
|                                                        |                                          |   |            |           
|                                                        | Total securitized loans                  |   | $          | 68,835,884 | 
|                                                        |                                          |   |            |           

In September 2000, 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), was issued. Statement No.140 replaces 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. Statement No. 140s revised accounting standards are effective
for transfers and servicing of financial assets and extinguishments
of liabilities occurring after March 31, 2001. The implementation
of Statement No. 140 will not have a material impact on the Corporations
consolidated financial statements.

Table 16 compares the average annualized yield for the three-month period ended
December 31, 2000, to the minimum yield for each transaction. The yield for
each of the transactions is presented on a cash basis and includes various
credit card or other fees as specified in the securitization agreements.

47



---



MBNA CORPORATION AND SUBSIDIARIES



---

Table 16: Yields on Securitized Transactions (a)

|                                               |  |                     |       |         |  |             |       |   |  |          |       |  
|---------------------------------------------- |  | ------------------- | ----- | ------- |  | ----------- | ----- | - |  | -------- | ----- | -
|                                               |  | Three-Month Average
|                                               |  |                    
|                                               |  |                     |       |         |  |             |       |   |  | Yield in
|                                               |  | Annualized          |       | Minimum |  | Excess of  
|                                               |  | Yield               |       | Yield   |  | Minimum (b)
|                                               |  |                     |       |         |  |            
|MasterTrust II 1994-C                          |  |                     | 19.72 | %       |  |             | 15.47 | % |  |          | 4.25  | %
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1994-E                          |  |                     | 19.72 |         |  |             | 15.37 |   |  |          | 4.35  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1995-A                          |  |                     | 19.72 |         |  |             | 15.50 |   |  |          | 4.22  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1995-C                          |  |                     | 19.72 |         |  |             | 15.43 |   |  |          | 4.29  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1995-E                          |  |                     | 19.72 |         |  |             | 15.44 |   |  |          | 4.28  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1995-G                          |  |                     | 19.72 |         |  |             | 15.43 |   |  |          | 4.29  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1995-J                          |  |                     | 19.72 |         |  |             | 15.45 |   |  |          | 4.27  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-A                          |  |                     | 19.72 |         |  |             | 15.42 |   |  |          | 4.30  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-B                          |  |                     | 19.72 |         |  |             | 15.49 |   |  |          | 4.23  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-C                          |  |                     | 19.72 |         |  |             | 15.36 |   |  |          | 4.36  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-D                          |  |                     | 19.72 |         |  |             | 15.36 |   |  |          | 4.36  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 2                                    |  |                     | 18.99 |         |  |             | 13.22 |   |  |          | 5.77  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-E                          |  |                     | 19.72 |         |  |             | 15.39 |   |  |          | 4.33  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-F                          |  |                     | 19.72 |         |  |             | 15.36 |   |  |          | 4.36  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-G                          |  |                     | 19.72 |         |  |             | 15.40 |   |  |          | 4.32  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-H                          |  |                     | 19.75 |         |  |             | 15.38 |   |  |          | 4.37  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-I                          |  |                     | 19.75 |         |  |             | 15.30 |   |  |          | 4.45  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-J                          |  |                     | 19.72 |         |  |             | 15.37 |   |  |          | 4.35  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-K                          |  |                     | 19.72 |         |  |             | 15.35 |   |  |          | 4.37  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1996-M                          |  |                     | 19.75 |         |  |             | 15.43 |   |  |          | 4.32  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 3                                    |  |                     | 18.99 |         |  |             | 13.30 |   |  |          | 5.69  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-B                          |  |                     | 19.72 |         |  |             | 15.41 |   |  |          | 4.31  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-C                          |  |                     | 19.72 |         |  |             | 15.33 |   |  |          | 4.39  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-D                          |  |                     | 19.75 |         |  |             | 15.38 |   |  |          | 4.37  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-E                          |  |                     | 19.75 |         |  |             | 15.43 |   |  |          | 4.32  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-F                          |  |                     | 19.72 |         |  |             | 15.28 |   |  |          | 4.44  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-G                          |  |                     | 19.72 |         |  |             | 15.37 |   |  |          | 4.35  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 4                                    |  |                     | 18.99 |         |  |             | 13.81 |   |  |          | 5.18  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-H                          |  |                     | 19.75 |         |  |             | 15.27 |   |  |          | 4.48  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-I                          |  |                     | 19.72 |         |  |             | 15.31 |   |  |          | 4.41  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-J                          |  |                     | 19.72 |         |  |             | 15.34 |   |  |          | 4.38  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-K                          |  |                     | 19.72 |         |  |             | 15.35 |   |  |          | 4.37  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-L                          |  |                     | 19.75 |         |  |             | 15.30 |   |  |          | 4.45  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-M                          |  |                     | 19.74 |         |  |             | 15.45 |   |  |          | 4.29  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1997-O                          |  |                     | 19.74 |         |  |             | 15.41 |   |  |          | 4.33  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-A                          |  |                     | 19.72 |         |  |             | 15.32 |   |  |          | 4.40  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 5                                    |  |                     | 18.99 |         |  |             | 14.16 |   |  |          | 4.83  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-B                          |  |                     | 19.75 |         |  |             | 15.47 |   |  |          | 4.28  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-C                          |  |                     | 19.72 |         |  |             | 15.23 |   |  |          | 4.49  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-D                          |  |                     | 19.72 |         |  |             | 15.14 |   |  |          | 4.58  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-E                          |  |                     | 19.75 |         |  |             | 15.44 |   |  |          | 4.31  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-F                          |  |                     | 19.75 |         |  |             | 15.23 |   |  |          | 4.52  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-G                          |  |                     | 19.72 |         |  |             | 15.38 |   |  |          | 4.34  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-H                          |  |                     | 19.72 |         |  |             | 15.23 |   |  |          | 4.49  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 6                                    |  |                     | 18.99 |         |  |             | 13.82 |   |  |          | 5.17  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-I                          |  |                     | 19.72 |         |  |             | 15.50 |   |  |          | 4.22  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-J                          |  |                     | 19.72 |         |  |             | 13.81 |   |  |          | 5.91  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-K                          |  |                     | 19.72 |         |  |             | 15.49 |   |  |          | 4.23  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 7                                    |  |                     | 18.99 |         |  |             | 13.98 |   |  |          | 5.01  |  
|                                              
|                                              
|                                              
|                                              
|Gloucester Credit Card Trust 1998-1            |  |                     | 18.00 |         |  |             | 12.22 |   |  |          | 5.78  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1998-L                          |  |                     | 19.72 |         |  |             | 15.44 |   |  |          | 4.28  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-A                          |  |                     | 19.72 |         |  |             | 15.31 |   |  |          | 4.41  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-B                          |  |                     | 19.72 |         |  |             | 15.22 |   |  |          | 4.50  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-C                          |  |                     | 19.75 |         |  |             | 15.50 |   |  |          | 4.25  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 8                                    |  |                     | 18.99 |         |  |             | 13.84 |   |  |          | 5.15  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-D                          |  |                     | 19.72 |         |  |             | 15.33 |   |  |          | 4.39  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-E                          |  |                     | 19.72 |         |  |             | 15.36 |   |  |          | 4.36  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-F                          |  |                     | 19.75 |         |  |             | 15.18 |   |  |          | 4.57  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-G                          |  |                     | 19.72 |         |  |             | 15.38 |   |  |          | 4.34  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 9                                    |  |                     | 18.99 |         |  |             | 13.86 |   |  |          | 5.13  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-H                          |  |                     | 19.75 |         |  |             | 15.58 |   |  |          | 4.17  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-I                          |  |                     | 19.72 |         |  |             | 15.33 |   |  |          | 4.39  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-J                          |  |                     | 19.72 |         |  |             | 15.50 |   |  |          | 4.22  |  
|                                              
|                                              
|                                              
|                                              
|Gloucester Credit Card Trust 1999-1            |  |                     | 18.00 |         |  |             | 12.34 |   |  |          | 5.66  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-K                          |  |                     | 19.83 |         |  |             | 15.26 |   |  |          | 4.57  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-L                          |  |                     | 19.72 |         |  |             | 15.51 |   |  |          | 4.21  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 1999-M                          |  |                     | 19.72 |         |  |             | 15.33 |   |  |          | 4.39  |  
|                                              
|                                              
|                                              
|                                              
|Gloucester Credit Card Trust 1999-2            |  |                     | 18.02 |         |  |             | 12.38 |   |  |          | 5.64  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 10                                   |  |                     | 18.99 |         |  |             | 13.91 |   |  |          | 5.08  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-A                          |  |                     | 19.72 |         |  |             | 15.42 |   |  |          | 4.30  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-B                          |  |                     | 19.72 |         |  |             | 15.35 |   |  |          | 4.37  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-C                          |  |                     | 19.72 |         |  |             | 15.40 |   |  |          | 4.32  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-D                          |  |                     | 19.72 |         |  |             | 15.50 |   |  |          | 4.22  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-E                          |  |                     | 19.72 |         |  |             | 15.59 |   |  |          | 4.13  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-F                          |  |                     | 19.75 |         |  |             | 15.35 |   |  |          | 4.40  |  
|                                              
|                                              
|                                              
|                                              
|Gloucester Credit Card Trust 2000-1            |  |                     | 18.12 |         |  |             | 12.74 |   |  |          | 5.38  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-G                          |  |                     | 19.75 |         |  |             | 15.52 |   |  |          | 4.23  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-H                          |  |                     | 19.72 |         |  |             | 15.53 |   |  |          | 4.19  |  
|                                              
|                                              
|                                              
|                                              
|MasterTrust II 2000-I                          |  |                     | 19.76 |         |  |             | 15.20 |   |  |          | 4.56  |  
|                                              
|                                              
|                                              
|                                              
|MBNA Triple A Trust 2000-1                     |  |                     | 18.70 |         |  |             | 16.09 |   |  |          | 2.61  |  
|                                              
|                                              
|                                              
|                                              
|MBNA Triple A Trust 2000-2                     |  |                     | 18.70 |         |  |             | 16.08 |   |  |          | 2.62  |  
|                                              
|                                              
|                                              
|                                              
|Cards No. 11                                   |  |                     | 18.93 |         |  |             | 14.14 |   |  |          | 4.79  |  
|                                              
|                                              
|                                              
|                                              
|First Union MasterTrust 1996-1 (c)             |  |                     | 17.56 |         |  |             | 9.41  |   |  |          | 8.15  |  
|                                              
|                                              
|                                              
|                                              
|First Union MasterTrust 1998-A (c)             |  |                     | 23.75 |         |  |             | 11.84 |   |  |          | 11.91 |  
|                                              
|                                              
|                                              
|                                              
|First Union Direct Bank MasterTrust 1998-A (c) |  |                     | 22.87 |         |  |             | 12.50 |   |  |          | 10.37 |  
|                                              
|                                              
|                                              
|                                              
|First Union Direct Bank MasterTrust 1998-B (c) |  |                     | 23.08 |         |  |             | 12.47 |   |  |          | 10.61 |  



---

|(a) |  | MasterTrust II 2000-J issued on
October 12, 2000, MasterTrust II 2000-K issued on November 21, 2000, Gloucester Credit Card Trust 2000-2 issued on December 7, 2000, Cards No. 12 issued
on December 12, 2000, MasterTrust II 2000-L issued on
December 13, 2000, and First Union Direct Bank MasterTrust
2000-A-I issued on December 15, 2000 are excluded from the yields
presented above as a result of their recency. Consumer Loan MasterTrust 1997-1, Consumer Loan MasterTrust 2000-1, Consumer Loan MasterTrust 2000-2, and UK 1998-A are excluded as the
yield in excess of minimum does not impact the distribution of principal to investors. Distribution to investors for these transactions may begin earlier than the scheduled time if
the credit enhancement amount falls below a predetermined contractual level.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | The yield in excess of minimum for the three-month period ended December 31, 2000 includes the adoption of the revised FFIEC policy in December 2000 by the Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(c) |  | These transactions were assumed by the Corporation in 2000 as part of the acquisition of the consumer and commercial revolving credit loan portfolio from First Union
Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

48



---



MBNA CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION



---

(unaudited)


The following supplemental financial information presents selected managed
income statement and asset data. This information can
be used to help evaluate the Corporations financial condition and results of
operations. Note V to the audited consolidated financial statements reconciles
the Corporations managed financial information to the Corporations reported
financial information in its consolidated financial statements.



---

Managed Financial Information

(dollars in thousands)

|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|-------------------------------------------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|Year Ended December 31,                                        |  | 2000 |            | 1999 |  | 1998
|                                                               |  |      |            |      |  |     
|Managed Income Statements                                     
|Interest income                                                |  | $    | 11,268,251 |      |  | $    | 9,133,754  |   |  | $ | 7,856,703  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Interest expense                                               |  |      | 5,431,142  |      |  |      | 3,945,953  |   |  |   | 3,543,127  |  
|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|Net interest income                                            |  |      | 5,837,109  |      |  |      | 5,187,801  |   |  |   | 4,313,576  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Provision for possible credit losses                           |  |      | 3,367,586  |      |  |      | 2,804,410  |   |  |   | 2,303,166  |  
|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|Net interest income after provision for possible credit losses |  |      | 2,469,523  |      |  |      | 2,383,391  |   |  |   | 2,010,410  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating income                                         |  |      | 3,298,586  |      |  |      | 2,349,281  |   |  |   | 1,650,859  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating expense                                        |  |      | 3,647,702  |      |  |      | 3,077,708  |   |  |   | 2,407,204  |  
|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|Income before income taxes                                     |  |      | 2,120,407  |      |  |      | 1,654,964  |   |  |   | 1,254,065  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Applicable income taxes                                        |  |      | 807,875    |      |  |      | 630,541    |   |  |   | 477,799    |  
|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|Net income                                                     |  | $    | 1,312,532  |      |  | $    | 1,024,423  |   |  | $ | 776,266    |  
|                                                               |  |      |            |      |  |      |            |   |  |   |            |  
|Managed Loans                                                 
|At year end                                                    |  | $    | 88,790,721 |      |  | $    | 72,255,513 |   |  | $ | 59,641,106 |  
|                                                              
|                                                              
|                                                              
|                                                              
|Average for the year                                           |  |      | 77,444,986 |      |  |      | 64,129,255 |   |  |   | 52,901,225 |  
|                                                              
|                                                              
|                                                              
|                                                              
|Managed Ratios (a)                                            
|Delinquency                                                    |  |      | 4.49       | %    |  |      | 4.45       | % |  |   | 4.62       | %
|                                                              
|                                                              
|                                                              
|                                                              
|Net credit losses                                              |  |      | 4.39       |      |  |      | 4.33       |   |  |   | 4.31       |  
|                                                              
|                                                              
|                                                              
|                                                              
|Net interest margin                                            |  |      | 7.08       |      |  |      | 7.42       |   |  |   | 7.47       |  



| |  |  | 
| |  |  | 



---

|(a) |  | 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. Without the one-time
FFIEC adjustment, managed loan delinquency would have been 4.94% at December 31, 2000, and managed net credit losses and managed net
interest margin would have been 3.94% and 7.14%, respectively, for the year ended December 31, 2000.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

49



---



MBNA CORPORATION AND SUBSIDIARIES

MANAGEMENTS REPORT ON 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 generally accepted accounting principles, 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 cost 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 Committee to discuss the results of their audit work, 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

50



---



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, 2000 and 1999, 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, 2000.
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, 2000 and 1999, and the consolidated results of
their operations and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.

|                                    |  | 
|----------------------------------- |  | 
|Baltimore, MarylandJanuary 12, 2001 |  | 
|                                   
|                                   

51



---



MBNA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

---

(dollars in thousands, except per share amounts)

|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |            |            | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- | - | --------- | ---------- | ---------- | 
|December 31,                                                                                                                                                                 |                                                                                                                               | 2000                                       |           | 1999      
|                                                                                                                                                                             |                                                                                                                               |                                            |           |           
|Assets                                                                                                                                                                      
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Cash and due from banks                                                                                                                                                      |                                                                                                                               | $                                          | 971,469   |            |            | $ | 488,386   |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Interest-earning time deposits in other banks                                                                                                                                |                                                                                                                               |                                            | 1,505,331 |            |            |   | 1,525,748 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Federal funds sold and securities purchased under resale agreements                                                                                                          |                                                                                                                               |                                            | 700,000   |            |            |   |          |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Investment securities:                                                                                                                                                      
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Available-for-sale (at market value, amortized cost of $2,661,962 and $2,772,305 at December 31, 2000
and 1999, respectively) |                                            |           | 2,666,196  |            |   |           | 2,752,663  |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Held-to-maturity (market value of $368,547and $264,832 at December 31, 2000
and 1999, respectively)                           |                                            |           | 384,088    |            |   |           | 293,641    |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Loans held for securitization                                                                                                                                                |                                                                                                                               |                                            | 8,271,933 |            |            |   | 9,692,616 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Loans:                                                                                                                                                                      
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Credit card                                                                                                                   |                                            |           | 7,798,772  |            |   |           | 6,060,564  |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Other consumer                                                                                                                |                                            |           | 3,884,132  |            |   |           | 1,910,529  |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             |                                                                                                                               | Total loans                                |           |            | 11,682,904 |   |           |            | 7,971,093  | 
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Reserve for possible credit losses                                                                                            |                                            |           | (386,568   | )          |   |           | (355,959   | )         
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Net loans                                  |           |            | 11,296,336 |   |           |            | 7,615,134  | 
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Premises and equipment, net                                                                                                                                                  |                                                                                                                               |                                            | 1,781,011 |            |            |   | 1,659,446 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Accrued income receivable                                                                                                                                                    |                                                                                                                               |                                            | 305,437   |            |            |   | 216,867   |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Accounts receivable from securitizations                                                                                                                                     |                                                                                                                               |                                            | 6,940,567 |            |            |   | 4,128,046 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Intangible assets, net                                                                                                                                                       |                                                                                                                               |                                            | 2,749,435 |            |            |   | 1,563,241 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Prepaid expenses and deferred charges                                                                                                                                        |                                                                                                                               |                                            | 322,201   |            |            |   | 274,894   |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Other assets                                                                                                                                                                 |                                                                                                                               |                                            | 784,092   |            |            |   | 648,450   |           
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Total assets                               |           | $          | 38,678,096 |   |           | $          | 30,859,132 | 
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|Liabilities                                                                                                                                                                 
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Deposits:                                                                                                                                                                   
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Time deposits                                                                                                                 |                                            | $         | 18,468,144 |            |   | $         | 13,700,508 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Money market deposit accounts                                                                                                 |                                            |           | 4,922,027  |            |   |           | 4,397,909  |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Noninterest-bearing demand deposits                                                                                           |                                            |           | 892,980    |            |   |           | 567,686    |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Interest-bearing transaction accounts                                                                                         |                                            |           | 50,475     |            |   |           | 39,388     |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                             | Savings accounts                                                                                                              |                                            |           | 9,969      |            |   |           | 9,262      |           
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Total deposits                             |           |            | 24,343,595 |   |           |            | 18,714,753 | 
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Short-term borrowings                                                                                                                                                        |                                                                                                                               |                                            | 159,512   |            |            |   | 1,039,004 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Long-term debt and bank notes                                                                                                                                                |                                                                                                                               |                                            | 5,735,635 |            |            |   | 5,708,880 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Accrued interest payable                                                                                                                                                     |                                                                                                                               |                                            | 237,610   |            |            |   | 182,990   |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Accrued expenses and other liabilities                                                                                                                                       |                                                                                                                               |                                            | 1,574,466 |            |            |   | 1,014,062 |           
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Total liabilities                          |           |            | 32,050,818 |   |           |            | 26,659,689 | 
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Stockholders
Equity                                                                                                                                                        
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Preferred stock ($.01 par value, 20,000,000 shares authorized, 8,573,882 shares
issued and outstanding at December 31, 2000 and 1999)                                        |                                                                                                                               |                                            | 86        |            |            |   | 86        |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Common stock ($.01 par value, 1,500,000,000 shares authorized, 851,803,793 shares and 801,781,250 shares
issued and outstanding at December 31, 2000 and 1999, respectively) |                                                                                                                               |                                            | 8,518     |            |            |   | 8,018     |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Additional paid-in capital                                                                                                                                                   |                                                                                                                               |                                            | 2,725,950 |            |            |   | 1,305,935 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Retained earnings                                                                                                                                                            |                                                                                                                               |                                            | 3,931,248 |            |            |   | 2,897,964 |           
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|                                                                                                                                                                            
|Accumulated other comprehensive income                                                                                                                                       |                                                                                                                               |                                            | (38,524   | )          |            |   | (12,560   | )         
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Total stockholders equity                 |           |            | 6,627,278  |   |           |            | 4,199,443  | 
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           
|                                                                                                                                                                             |                                                                                                                               | Total liabilities and stockholders equity |           | $          | 38,678,096 |   |           | $          | 30,859,132 | 
|                                                                                                                                                                             |                                                                                                                               |                                            |           |            |            |   |           |           

---

The accompanying notes are an integral part of the consolidated
financial statements.

52



---



MBNA CoRPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

---

(dollars in thousands, except per share amounts)

|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |         |           | 
|------------------------------------------------------------------- | ---------- | ----------------------------- | --------- | ------- | --------- | ---- | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|Year Ended December 31,                                             |            | 2000                          |           | 1999    |           | 1998
|                                                                    |            |                               |           |         |           |     
|Interest
Income                                                    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans                                                               |            | $                             | 1,308,169 |         |           | $    | 1,404,063 |         |           | $ | 1,315,330 |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Investment securities:                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Taxable    |                               |           | 174,109 |           |      |           | 131,818 |           |   |           | 111,092 |          
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Tax-exempt |                               |           | 4,396   |           |      |           | 3,587   |           |   |           | 3,405   |          
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Time deposits in other banks                                        |            |                               | 83,727    |         |           |      | 120,234   |         |           |   | 135,420   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Federal funds sold and securities purchased under resale agreements |            |                               | 43,486    |         |           |      | 47,264    |         |           |   | 28,783    |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loans held for securitization                                       |            |                               | 1,161,792 |         |           |      | 555,305   |         |           |   | 372,142   |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|                                                                    |            | Total interest income         |           |         | 2,775,679 |      |           |         | 2,262,271 |   |           |         | 1,966,172 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest Expense                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Deposits                                                            |            |                               | 1,260,575 |         |           |      | 919,426   |         |           |   | 816,104   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Short-term borrowings                                               |            |                               | 34,152    |         |           |      | 36,337    |         |           |   | 26,038    |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Long-term debt and bank notes                                       |            |                               | 397,000   |         |           |      | 372,743   |         |           |   | 381,691   |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|                                                                    |            | Total interest expense        |           |         | 1,691,727 |      |           |         | 1,328,506 |   |           |         | 1,223,833 | 
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|Net Interest Income                                                 |            |                               | 1,083,952 |         |           |      | 933,765   |         |           |   | 742,339   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Provision for possible credit losses                                |            |                               | 409,017   |         |           |      | 408,914   |         |           |   | 310,039   |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|Net interest income after provision for possible credit losses      |            |                               | 674,935   |         |           |      | 524,851   |         |           |   | 432,300   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Other Operating
Income                                             
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interchange                                                         |            |                               | 286,182   |         |           |      | 220,298   |         |           |   | 138,415   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Credit card fees                                                    |            |                               | 289,468   |         |           |      | 199,485   |         |           |   | 129,758   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Securitization income                                               |            |                               | 4,282,617 |         |           |      | 3,643,209 |         |           |   | 2,844,244 |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Insurance                                                           |            |                               | 85,091    |         |           |      | 59,638    |         |           |   | 78,981    |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Other                                                               |            |                               | 149,816   |         |           |      | 85,191    |         |           |   | 37,571    |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|                                                                    |            | Total other operating income  |           |         | 5,093,174 |      |           |         | 4,207,821 |   |           |         | 3,228,969 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Other Operating Expense
Salaries and employee benefits              |            |                               | 1,511,389 |         |           |      | 1,261,491 |         |           |   | 1,070,909 |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Occupancy expense of premises                                       |            |                               | 139,566   |         |           |      | 126,881   |         |           |   | 119,879   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Furniture and equipment expense                                     |            |                               | 199,833   |         |           |      | 181,091   |         |           |   | 170,975   |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Other                                                               |            |                               | 1,796,914 |         |           |      | 1,508,245 |         |           |   | 1,045,441 |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|                                                                    |            | Total other operating expense |           |         | 3,647,702 |      |           |         | 3,077,708 |   |           |         | 2,407,204 | 
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|Income Before Income Taxes                                          |            |                               | 2,120,407 |         |           |      | 1,654,964 |         |           |   | 1,254,065 |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Applicable income taxes                                             |            |                               | 807,875   |         |           |      | 630,541   |         |           |   | 477,799   |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|Net Income                                                          |            | $                             | 1,312,532 |         |           | $    | 1,024,423 |         |           | $ | 776,266   |        
|                                                                    |            |                               |           |         |           |      |           |         |           |   |           |        
|Earnings Per Common Share                                           |            | $                             | 1.58      |         |           | $    | 1.26      |         |           | $ | 1.01      |        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Earnings Per Common ShareÈAssuming Dilution                         |            |                               | 1.53      |         |           |      | 1.21      |         |           |   | .97       |        



---

53



---



MBNA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

---

|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |   | 
|----------------------------------------------- | -------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------------------ | - | ------ | ------- | --------- | - | ------ | -- | - | - | - | ----- | - | - | 
|                                                |                                        |                                                                                                                                                                     |       | Outstanding Shares
|                                                |                                        |                                                                                                                                                                     |       |                   
|                                                |                                        |                                                                                                                                                                     |       | Preferred          |   | Common |         | Preferred |   | Common
|                                                |                                        |                                                                                                                                                                     |       | (000)              |   | (000)  |         | Stock     |   | Stock 
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |       
|Balance, December 31, 1997                      |                                        |                                                                                                                                                                     | 8,574 |                    |   |        | 751,781 |           |   | $      | 86 |   |   | $ | 7,518 |  
|                                               
|                                               
|                                               
|                                               
|Comprehensive income:                          
|                                               
|                                               
|                                               
|                                               
|                                                | Net income                             |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of $2,422 at
December 31, 1998)                                                                        |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Net unrealized losses on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $2,160 at December 31, 1998)   |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Minimum benefit plan liability adjustment,
net of tax (accumulated amount of ($4,575)
at December 31, 1998)                                                         |       |                    |  |        |         |           |  |        |    |   |  |   |       |   |  | 
|                                               
|                                               
|                                               
|                                               
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                               
|                                               
|                                               
|                                               
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |   |  
|                                               
|                                               
|                                               
|                                               
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                               
|                                               
|                                               
|                                               
|Comprehensive income                            |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|                                               
|                                               
|                                               
|                                               
|Cash dividends:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.24 per share                  |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                               
|                                               
|                                               
|                                               
|                                                | Preferred                              |                                                                                                                                                                     |       |                   |   |        |         |          |   |        |    |  |   |   |       |  |  
|                                               
|                                               
|                                               
|                                               
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     |      |                    |   |        | 11,923  |           |   |        |   |   |   |   | 119   |  
|                                               
|                                               
|                                               
|                                               
|Stock option tax benefit                        |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|                                               
|                                               
|                                               
|                                               
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     |      |                    |   |        |        |           |   |        |   |   |   |   |      |  
|                                               
|                                               
|                                               
|                                               
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     |      |                    |   |        | (11,908 | )         |   |        |   |   |   |   | (119  | )
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  
|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:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.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:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.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 |  
|                                                |                                        |                                                                                                                                                                     |       |                    |   |        |         |           |   |        |    |   |   |   |       |  

[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, 1997                      |                                        | $                                                                                                                                                                   | 421,871   |            |   | $        | 1,530,868 |               |   | $             | 9,707   |             |         | $ | 1,970,050 |          
|                                               
|                                               
|                                               
|                                               
|Comprehensive income:                          
|                                               
|                                               
|                                               
|                                               
|                                                | Net income                             |                                                                                                                                                                     |           |           |   |          |           | 776,266       |   |               |         |            |         |   |           | 776,266   |        
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Foreign currency translation, net of tax
(accumulated amount of $2,422 at
December 31, 1998)                                                                        |           |            |  |          |           |               |  |               |         |             | (502    | ) |           |           | (502    | )
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Net unrealized losses on investment securities
available-for-sale and other financial
instruments, net of tax (accumulated
amount of $2,160 at December 31, 1998)   |           |            |  |          |           |               |  |               |         |             | (4,623  | ) |           |           | (4,623  | )
|                                               
|                                               
|                                               
|                                               
|                                                |                                        | Minimum benefit plan liability adjustment,
net of tax (accumulated amount of ($4,575)
at December 31, 1998)                                                         |           |            |  |          |           |               |  |               |         |             | (4,575  | ) |           |           | (4,575  | )
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|                                                | Other comprehensive income, net of tax |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           | (9,700    | )      
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|Comprehensive income                            |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   | 766,566   |          
|                                               
|                                               
|                                               
|                                               
|Cash dividends:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.24 per share                  |                                                                                                                                                                     |           |           |   |          |           | (180,468      | ) |               |         |            |         |   |           | (180,468  | )      
|                                               
|                                               
|                                               
|                                               
|                                                | Preferred                              |                                                                                                                                                                     |           |           |   |          |           | (14,292       | ) |               |         |            |         |   |           | (14,292   | )      
|                                               
|                                               
|                                               
|                                               
|Exercise of stock options and other awards      |                                        |                                                                                                                                                                     | 42,335    |            |   |          |          |               |   |               |        |             |         |   | 42,454    |          
|                                               
|                                               
|                                               
|                                               
|Stock option tax benefit                        |                                        |                                                                                                                                                                     | 48,776    |            |   |          |          |               |   |               |        |             |         |   | 48,776    |          
|                                               
|                                               
|                                               
|                                               
|Amortization of deferred compensation expense   |                                        |                                                                                                                                                                     | 5,209     |            |   |          |          |               |   |               |        |             |         |   | 5,209     |          
|                                               
|                                               
|                                               
|                                               
|Acquisition and retirement of common stock      |                                        |                                                                                                                                                                     | (247,141  | )          |   |          |          |               |   |               |        |             |         |   | (247,260  | )        
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          
|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:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.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:                                
|                                               
|                                               
|                                               
|                                               
|                                                | CommonÈ$.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 |          
|                                                |                                        |                                                                                                                                                                     |           |            |   |          |           |               |   |               |         |             |         |   |           |          



---

The accompanying notes are an integral part of the consolidated financial statements.

54



---



MBNA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

---

(dollars in thousands)

|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |          |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------------------------------------------------- | ---------- | ---------- | ---------- | ---- | ---------- | -------- | ---------- | - | ---------- | -------- | ---------- | -
|Year Ended December 31,                                                                                                                         |                                                      | 2000                                                |            | 1999       |            | 1998
|                                                                                                                                                |                                                      |                                                     |            |            |            |     
|Operating
Activities                                                                                                                           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net income                                                                                                                                      |                                                      | $                                                   | 1,312,532  |            |            | $    | 1,024,423  |          |            | $ | 776,266    |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Adjustments to reconcile net income to net cash (used in) provided by operating activities:                                                    
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Provision for possible credit losses                 |                                                     |            | 409,017    |            |      |            | 408,914  |            |   |            | 310,039  |           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Depreciation, amortization, and accretion            |                                                     |            | 555,482    |            |      |            | 426,443  |            |   |            | 256,587  |           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Provision (benefit) for deferred income taxes        |                                                     |            | 44,807     |            |      |            | (46,604  | )          |   |            | 6,689    |           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Increase in accrued income receivable                |                                                     |            | (88,570    | )          |      |            | (23,848  | )          |   |            | (46,055  | )         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Increase in accounts receivable from securitizations |                                                     |            | (2,812,521 | )          |      |            | (532,490 | )          |   |            | (759,725 | )         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Increase in accrued interest payable                 |                                                     |            | 54,620     |            |      |            | 29,789   |            |   |            | 15,986   |           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                                | Decrease (increase) in other operating activities    |                                                     |            | 279,869    |            |      |            | 122,226  |            |   |            | (49,466  | )         
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|                                                                                                                                                |                                                      | Net cash (used in) provided by operating activities |            |            | (244,764   | )    |            |          | 1,408,853  |   |            |          | 510,321    |  
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Investing
Activities                                                                                                                           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net (increase) decrease in money market instruments                                                                                             |                                                      |                                                     | (679,583   | )          |            |      | 2,035,467  |          |            |   | (1,475,150 | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from maturities of investment securities available-for-sale                                                                            |                                                      |                                                     | 714,223    |            |            |      | 828,800    |          |            |   | 2,113,501  |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Purchases of investment securities available-for-sale                                                                                           |                                                      |                                                     | (634,154   | )          |            |      | (1,945,110 | )        |            |   | (1,604,699 | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from maturities of investment securities held-to-maturity                                                                              |                                                      |                                                     | 13,210     |            |            |      | 44,718     |          |            |   | 215,239    |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Purchases of investment securities held-to-maturity                                                                                             |                                                      |                                                     | (103,981   | )          |            |      | (100,186   | )        |            |   | (84,791    | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from securitization of loans                                                                                                           |                                                      |                                                     | 15,765,871 |            |            |      | 13,287,994 |          |            |   | 10,681,836 |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Acquisition of credit card business of PNC Bank, N.A                                                                                            |                                                      |                                                     |           |            |            |      | (3,191,786 | )        |            |   |           |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Loan portfolio acquisitions                                                                                                                     |                                                      |                                                     | (4,991,780 | )          |            |      | (2,726,633 | )        |            |   | (3,654,132 | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from sale of loans                                                                                                                     |                                                      |                                                     | 292,455    |            |            |      | 764,263    |          |            |   | 171,769    |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Amortization of securitized loans                                                                                                               |                                                      |                                                     | (5,621,914 | )          |            |      | (5,084,811 | )        |            |   | (3,008,978 | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net loan originations                                                                                                                           |                                                      |                                                     | (9,611,144 | )          |            |      | (8,616,649 | )        |            |   | (7,119,584 | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net purchases of premises and equipment                                                                                                         |                                                      |                                                     | (325,019   | )          |            |      | (235,124   | )        |            |   | (214,640   | )       
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|                                                                                                                                                |                                                      | Net cash used in investing activities               |            |            | (5,181,816 | )    |            |          | (4,939,057 | ) |            |          | (3,979,629 | )
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Financing
Activities                                                                                                                           
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net increase in money market
deposit accounts, noninterest-bearing
demand deposits, interest-bearing transaction accounts, and savings accounts |                                                      |                                                     | 861,206    |            |            |      | 352,267    |          |            |   | 1,183,936  |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net increase in time deposits                                                                                                                   |                                                      |                                                     | 4,767,636  |            |            |      | 2,955,446  |          |            |   | 1,309,891  |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Net (decrease) increase in short-term borrowings                                                                                                |                                                      |                                                     | (879,492   | )          |            |      | (192,191   | )        |            |   | 1,038,572  |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from issuance of long-term debt and bank notes                                                                                         |                                                      |                                                     | 1,187,014  |            |            |      | 891,495    |          |            |   | 876,126    |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Maturity of long-term debt and bank notes                                                                                                       |                                                      |                                                     | (1,097,916 | )          |            |      | (1,134,257 | )        |            |   | (424,677   | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from exercise of stock options and other awards                                                                                        |                                                      |                                                     | 62,874     |            |            |      | 27,932     |          |            |   | 42,454     |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Acquisition and retirement of common stock                                                                                                      |                                                      |                                                     | (323,464   | )          |            |      | (211,337   | )        |            |   | (247,260   | )       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Proceeds from issuance of common stock                                                                                                          |                                                      |                                                     | 1,599,055  |            |            |      | 1,174,086  |          |            |   |           |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Dividends paid                                                                                                                                  |                                                      |                                                     | (267,250   | )          |            |      | (227,733   | )        |            |   | (189,916   | )       
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|                                                                                                                                                |                                                      | Net cash provided by financing activities           |            |            | 5,909,663  |      |            |          | 3,635,708  |   |            |          | 3,589,126  |  
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|Increase in Cash and Cash
Equivalents                                                                                                           |                                                      |                                                     | 483,083    |            |            |      | 105,504    |          |            |   | 119,818    |         
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Cash and cash equivalents at beginning of year                                                                                                  |                                                      |                                                     | 488,386    |            |            |      | 382,882    |          |            |   | 263,064    |         
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|Cash and cash equivalents at end of year                                                                                                        |                                                      | $                                                   | 971,469    |            |            | $    | 488,386    |          |            | $ | 382,882    |         
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|Supplemental
Disclosures                                                                                                                       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Interest expense paid                                                                                                                           |                                                      | $                                                   | 1,636,238  |            |            | $    | 1,295,597  |          |            | $ | 1,207,603  |         
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         
|Income taxes paid                                                                                                                               |                                                      | $                                                   | 721,368    |            |            | $    | 610,806    |          |            | $ | 406,191    |         
|                                                                                                                                                |                                                      |                                                     |            |            |            |      |            |          |            |   |            |         



---

55



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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 International 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 affinity 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), a newly chartered national bank
which was converted from a preexisting state chartered bank. MBNA Delaware
offers corporate loan products and travel related services.

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 year amounts
have been reclassified.

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.

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 also has a foreign branch office in
the Grand Cayman Islands.

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
appropriate 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 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.

INVESTMENT SECURITIES

Investment securities available-for-sale are recorded at market
value with unrealized gains and losses, net of tax, reported as a component of
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 are the lesser of loans eligible for
securitization or sale, or loans that management intends to securitize or sell
within one year. Loans held for securitization also includes loans which were
originated through certain affinity groups 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 market value.

INTEREST INCOME ON LOANS

Interest income is recognized based upon the principal amount of loans
outstanding. Interest income is generally recognized until the loan is paid or
charged off. The accrued interest portion of the charged-off loan balance is
deducted from current period interest income, while the principal balance is
charged off against the reserve for possible credit losses.

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. Accrued credit card fees
previously recognized on charged-off accounts are 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, while incremental direct loan
origination costs are deferred only
in the first year. These costs are included in prepaid expenses and deferred
charges. At December 31, 2000 and 1999, the incremental direct loan origination
costs deferred were $43.4 million and $41.6 million, respectively.

56



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MBNA CORPORATION AND SUBSIDIARIES



---

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. The Corporation recognizes interchange income as
earned.

INSURANCE INCOME

Insurance income represents the commission fee the Corporation receives for
marketing credit-related Life and Disability, Automobile, and Life and Health
insurance products. The Corporation does not retain any of the underwriting
risk associated with the insurance products it markets. The Corporation
recognizes insurance income as earned.

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 refundable fees. In accordance
with SAB No. 101, all refundable fee income received for services rendered by
the Corporation is deferred until the 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.

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).

RESERVE FOR POSSIBLE CREDIT LOSSES

The Corporation makes certain estimates and assumptions that affect the
determination of the reserve for possible credit losses. The loan portfolio is
regularly reviewed to determine an appropriate reserve for possible credit
losses based upon the impact of economic conditions on the borrowers ability
to repay, past collection experience, the risk characteristics of the
portfolio, and other factors. Significant changes in these factors could impact
the appropriate reserve for possible credit losses. A provision is charged
against earnings to maintain the reserve at an appropriate level.
The Corporation charges off open-end delinquent accounts by the end of the
month in which the account becomes 180 days contractually past due, closed-end
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 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. 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.

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.
The Corporation charges off the net recoverable values of fraudulent
transactions within 90 days of discovery.

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.

ACCOUNTS RECEIVABLE FROM SECURITIZATIONS

Accounts receivable from securitizations consist primarily of amounts owed by
the trusts for the purchase of new loan receivables during the revolving
period, accrued interest and fees on securitized loans, an interest-only strip
receivable, accrued servicing fees, cash reserve accounts, and other
subordinated retained interests.

PREPAID EXPENSES AND DEFERRED CHARGES

The principal components of prepaid expenses and deferred charges include
direct loan origination costs, royalties advanced to the Corporations affinity
groups and financial institutions, 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.

INTANGIBLE ASSETS

Intangible assets, including the value of acquired Customer accounts, goodwill,
and all other identifiable intangible assets, are amortized over the periods
the Corporation receives a benefit, generally not exceeding ten years. The
Corporation amortizes its intangible assets generally using an accelerated
method to better match the amortization to the expected future cash flows from
the use of the asset. The Corporation had accumulated amortization related to
its intangible assets of $588.2 million and $314.3 million at December 31, 2000
and 1999, respectively.

The Corporation periodically reviews the carrying value of its intangible
assets for impairment. The intangible assets are carried at the lower of net
book value or estimated fair value, with the fair value determined by
discounting the expected future cash flows from the use of the asset, using an
appropriate discount rate. The Corporation performs this valuation 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. Significant changes in these factors could result in an impairment of
the intangible asset and therefore accelerate the amortization of the
Corporations intangible assets.

57



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---

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.

INTEREST RATE SWAP AGREEMENTS

The Corporation uses interest rate swap agreements to change fixed-rate funding
sources to floating-rate funding sources to better match the 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.

Amounts paid or received related to outstanding interest rate swap agreements
that are used in the asset/liability management process are accrued and
recognized in earnings, as an adjustment to the related interest income or
expense of the hedged asset/liability, over the life of the related agreement.
For interest rate swap agreements to qualify for hedge accounting treatment the
following conditions must be met: the underlying asset/liability being hedged
by the interest rate swap agreement exposes the Corporation to interest rate
risk; the interest rate swap agreement reduces the Corporations sensitivity to
interest rate risk; and the interest rate swap agreements are designated and
deemed effective in hedging the Corporations exposure to interest rate risk.
All of the Corporations interest rate swap agreements qualify for hedge
accounting treatment. The Corporation does not hold or issue interest rate swap
agreements for trading purposes. 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 agreements as an
adjustment to the yield and are included in the underlying assets/liabilities
hedged.

FOREIGN EXCHANGE SWAP AGREEMENTS

The Corporation enters into 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. These foreign exchange swap agreements are marked to
market with any unrealized gains or losses recognized in other operating
income. The Corporation does not hold or issue foreign exchange swap agreements
for trading purposes.

FORWARD EXCHANGE CONTRACTS

The Corporation enters into forward exchange contracts to reduce its exposure
to foreign currency exchange rate risk primarily related to activity associated
with its foreign bank subsidiaries. Forward exchange contracts are commitments
to buy or sell foreign currency at a future date for a contracted price.
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 on-balance-sheet financial instruments. The premium paid
or received for these contracts is amortized over the life of the agreement to
other operating income. For contracts to effectively hedge foreign currency
exchange rate risk, they must reduce the Corporations sensitivity to foreign
currency exchange rate risk. For contracts that are designated and effective as
hedges of its net investment in the Banks foreign subsidiaries, gains and
losses are deferred and reported in stockholders equity, net of tax, as an
offset to translation gains and losses. Contracts, or portions thereof, that
are not effective as hedges are marked to market with any gains or losses
recognized in other operating income. The Corporation only has forward exchange
contracts that are designated and effective as hedges. The Corporation does not
hold or issue forward exchange contracts for trading purposes. For any
contracts that are terminated early, the remaining premium or discount is
immediately recognized in other operating income.

NEW ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (Statement No. 133), established
accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. In June 1999, 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), was issued and extended the effective date for Statement
No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000. In June 2000, the Financial Accounting Standards Board issued 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). Statement No. 138 amended the accounting and
reporting standards of Statement No. 133 for certain derivative instruments and
certain hedging activities. The Corporations implementation of Statement No.
133, as amended by Statement No. 137 and Statement No. 138, on January 1, 2001
did not have a material impact on the Corporations consolidated financial
statements.

In September 2000, 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),
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

58



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MBNA CORPORATION AND SUBSIDIARIES



---

most of Statement No. 125s provisions without reconsideration. Statement
No. 140s revised accounting standards are effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring
after March 31, 2001. The implementation of Statement No. 140 will not have a
material impact on the Corporations consolidated financial statements.

NOTE B: 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 C: 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 stock options. At December 31, 2000,
the Corporation did not have any employee stock options which were excluded
from the computation of earnings per shareassuming dilution. The Corporation
does not have any other common stock equivalents.

NOTE D: RESERVE FOR POSSIBLE CREDIT LOSSES

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,                                          |                   | 2000 |          | 1999     |   | 1998
|                                                      |                   |      |          |          |   |     
|Reserve for possible credit losses,
beginning of year |                   | $    | 355,959  |          |   | $    | 216,911  |          |   | $ | 162,476  |         
|                                                     
|                                                     
|                                                     
|                                                     
|Reserves acquired                                     |                   |      | 64,726   |          |   |      | 109,757  |          |   |   | 29,932   |         
|                                                     
|                                                     
|                                                     
|                                                     
|Provision for possible credit losses                  |                   |      | 409,017  |          |   |      | 408,914  |          |   |   | 310,039  |         
|                                                     
|                                                     
|                                                     
|                                                     
|Foreign currency translation                          |                   |      | (1,081   | )        |   |      | (96      | )        |   |   | (125     | )       
|                                                     
|                                                     
|                                                     
|                                                     
|Credit losses                                         |                   |      | (646,857 | )        |   |      | (567,929 | )        |   |   | (440,113 | )       
|                                                     
|                                                     
|                                                     
|                                                     
|Recoveries                                            |                   |      | 204,804  |          |   |      | 188,402  |          |   |   | 154,702  |         
|                                                      |                   |      |          |          |   |      |          |          |   |   |          |         
|                                                      | Net credit losses |      |          | (442,053 | ) |      |          | (379,527 | ) |   |          | (285,411 | )
|                                                      |                   |      |          |          |   |      |          |          |   |   |          |         
|Reserve for possible credit losses,
end of year       |                   | $    | 386,568  |          |   | $    | 355,959  |          |   | $ | 216,911  |         
|                                                      |                   |      |          |          |   |      |          |          |   |   |          |         

Computation of Earnings Per Common Share

(dollars in thousands, except per share amounts)

|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|----------------------------------------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | ------- | 
|Year Ended December 31,                                                       |  | 2000 |           | 1999 |  | 1998
|                                                                              |  |      |           |      |  |     
|Earnings per Common Share                                                    
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |  | $    | 1,312,532 |      |  | $    | 1,024,423 |  |  | $ | 776,266 | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Less: preferred stock dividend requirements                                   |  |      | 14,674    |      |  |      | 14,292    |  |  |   | 14,313  | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Net income applicable to common stock                                         |  | $    | 1,297,858 |      |  | $    | 1,010,110 |  |  | $ | 761,974 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Weighted average common shares outstanding (000)                              |  |      | 820,551   |      |  |      | 801,020   |  |  |   | 751,856 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Earnings per common share                                                     |  | $    | 1.58      |      |  | $    | 1.26      |  |  | $ | 1.01    | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Earnings per Common ShareAssuming Dilution                                  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |  | $    | 1,312,532 |      |  | $    | 1,024,423 |  |  | $ | 776,266 | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Less: preferred stock dividend requirements                                   |  |      | 14,674    |      |  |      | 14,313    |  |  |   | 14,292  | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Net income applicable to common stock                                         |  | $    | 1,297,858 |      |  | $    | 1,010,110 |  |  | $ | 761,974 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Weighted average common shares outstanding (000)                              |  |      | 820,551   |      |  |      | 801,020   |  |  |   | 751,856 | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net effect of dilutive stock options (000)                                    |  |      | 25,984    |      |  |      | 36,063    |  |  |   | 37,565  | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Weighted average common shares outstanding and common stock equivalents (000) |  |      | 846,535   |      |  |      | 837,083   |  |  |   | 789,421 | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 
|Earnings per common shareassuming dilution                                   |  | $    | 1.53      |      |  | $    | 1.21      |  |  | $ | .97     | 
|                                                                              |  |      |           |      |  |      |           |  |  |   |         | 

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NOTE E: INVESTMENT SECURITIES

Summary of Investment Securities

(dollars in thousands)

|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |           |           | 
|----------------------------------------- | ------------------------------------------------------------ | ---------------------------------------------- | - | --------- | --------- | ---------- | - | ---------- | ----- | ------ | - | ------- | ------- | - | - | --------- | --------- | 
|                                          |                                                              |                                                |   |           |           |            |   | Gross      |       | Gross 
|                                          |                                                              |                                                |   | Amortized |           | Unrealized |   | Unrealized |       | Market
|                                          |                                                              |                                                |   | Cost      |           | Gains      |   | Losses     |       | Value 
|                                          |                                                              |                                                |   |           |           |            |   |            |       |       
|December 31, 2000                        
|                                         
|                                         
|                                         
|                                         
|Investment securities available-for-sale:
|                                         
|                                         
|                                         
|                                         
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $ | 1,704,107 |           |            | $ | 6,531      |       |        | $ | (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   | 
|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |          
|December 31, 1998                        
|                                         
|                                         
|                                         
|                                         
|Investment securities available-for-sale:
|                                         
|                                         
|                                         
|                                         
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $ | 526,192   |           |            | $ | 1,340      |       |        | $ | (48     | )       |   | $ | 527,484   |          
|                                         
|                                         
|                                         
|                                         
|                                          | State and political subdivisions of the United States        |                                                |   | 89,529    |           |            |   | 40         |       |        |   |        |         |   |   | 89,569    |          
|                                         
|                                         
|                                         
|                                         
|                                          | Asset-backed and other securities                            |                                                |   | 1,050,402 |           |            |   | 189        |       |        |   | (3,940  | )       |   |   | 1,046,651 |          
|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |          
|                                          |                                                              | Total investment securities available-for-sale |   | $         | 1,666,123 |            |   | $          | 1,569 |        |   | $       | (3,988  | ) |   | $         | 1,663,704 | 
|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |          
|Investment securities held-to-maturity:  
|                                         
|                                         
|                                         
|                                         
|                                          | U.S. Treasury and other U.S. government agencies obligations |                                                | $ | 194,418   |           |            | $ | 412        |       |        | $ | (5,189  | )       |   | $ | 189,641   |          
|                                         
|                                         
|                                         
|                                         
|                                          | State and political subdivisions of the United States        |                                                |   | 2,685     |           |            |   | 255        |       |        |   |        |         |   |   | 2,940     |          
|                                         
|                                         
|                                         
|                                         
|                                          | Asset-backed and other securities                            |                                                |   | 18,917    |           |            |   |           |       |        |   | (25     | )       |   |   | 18,892    |          
|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |          
|                                          |                                                              | Total investment securities held-to-maturity   |   | $         | 216,020   |            |   | $          | 667   |        |   | $       | (5,214  | ) |   | $         | 211,473   | 
|                                          |                                                              |                                                |   |           |           |            |   |            |       |        |   |         |         |   |   |          

Estimated Maturities of Investment Securities

(dollars in thousands)

|                                         |                                        |                                                |   |           |           |        |   |           |           | 
|---------------------------------------- | -------------------------------------- | ---------------------------------------------- | - | --------- | --------- | ------ | - | --------- | --------- | 
|                                         |                                        |                                                |   | Amortized |           | Market
|December 31, 2000                        |                                        | Cost                                           |   | Value    
|                                         |                                        |                                                |   |          
|Investment Securities Available-for-Sale
|                                        
|                                        
|                                        
|                                        
|                                         | Due within one year                    |                                                | $ | 1,700,787 |           |        | $ | 1,699,682 |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after one year through five years  |                                                |   | 918,358   |           |        |   | 923,791   |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after five years through ten years |                                                |   | 31,394    |           |        |   | 31,326    |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after ten years                    |                                                |   | 11,423    |           |        |   | 11,397    |          
|                                         |                                        |                                                |   |           |           |        |   |          
|                                         |                                        | Total investment securities available-for-sale |   | $         | 2,661,962 |        |   | $         | 2,666,196 | 
|                                         |                                        |                                                |   |           |           |        |   |          
|Investment Securities Held-to-Maturity  
|                                        
|                                        
|                                        
|                                        
|                                         | Due within one year                    |                                                | $ | 10        |           |        | $ | 10        |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after one year through five years  |                                                |   | 12,252    |           |        |   | 12,050    |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after five years through ten years |                                                |   |          |           |        |   |          |          
|                                        
|                                        
|                                        
|                                        
|                                         | Due after ten years                    |                                                |   | 371,826   |           |        |   | 356,487   |          
|                                         |                                        |                                                |   |           |           |        |   |          
|                                         |                                        | Total investment securities held-to-maturity   |   | $         | 384,088   |        |   | $         | 368,547   | 
|                                         |                                        |                                                |   |           |           |        |   |          

The Corporation did not sell any investment securities during 2000, 1999, and
1998. The Corporation had pledged investment securities with a book value of
$601.8 million and $767.9 million
at December 31, 2000 and 1999, respectively. These investment securities were
pledged at the Federal Reserve Bank as part of the Corporations funding and
liquidity programs.

60



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MBNA CORPORATION AND SUBSIDIARIES



---

NOTE F: 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 loans in Canada. The
table below 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 credit card Customers is approximately $11,100 and
the average balance outstanding per account is approximately $3,500 at December
31, 2000.

Geographic Distribution of Loan Receivables, Securitized Loans, and Managed Loans

(dollars in thousands)

|                       |       |   |                  |            |                   |  |               |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |      |       |  
|---------------------- | ----- | - | ---------------- | ---------- | ----------------- |  | ------------- | ----- | - | - | ---------- | ---------- |  |  | ---- | ----- | - | - | ---------- | ---------- |  |  | ---- | ----- | -
|                       |       |   | Loan Receivables |            | Securitized Loans |  | Managed Loans
|                       |       |   |                  |            |                   |  |              
|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 | %
|                       |       |   |                  |            |                   |  |               |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |      |      
|December 31, 1999     
|                      
|                      
|                      
|                      
|United States:        
|                      
|                      
|                      
|                      
|Northern               |       | $ | 1,895,220        |            |                   |  | 10.7          | %     |   | $ | 6,885,785  |            |  |  | 12.6 | %     |   | $ | 8,781,005  |            |  |  | 12.1 | %    
|                      
|                      
|                      
|                      
|Mid-Atlantic           |       |   | 2,768,038        |            |                   |  | 15.7          |       |   |   | 8,151,305  |            |  |  | 14.9 |       |   |   | 10,919,343 |            |  |  | 15.1 |      
|                      
|                      
|                      
|                      
|Southern               |       |   | 3,216,351        |            |                   |  | 18.2          |       |   |   | 8,328,543  |            |  |  | 15.3 |       |   |   | 11,544,894 |            |  |  | 16.0 |      
|                      
|                      
|                      
|                      
|Central                |       |   | 2,502,055        |            |                   |  | 14.2          |       |   |   | 8,905,188  |            |  |  | 16.3 |       |   |   | 11,407,243 |            |  |  | 15.8 |      
|                      
|                      
|                      
|                      
|Western                |       |   | 2,788,430        |            |                   |  | 15.8          |       |   |   | 9,997,587  |            |  |  | 18.3 |       |   |   | 12,786,017 |            |  |  | 17.7 |      
|                      
|                      
|                      
|                      
|Southwestern           |       |   | 1,899,273        |            |                   |  | 10.7          |       |   |   | 7,459,175  |            |  |  | 13.7 |       |   |   | 9,358,448  |            |  |  | 12.9 |      
|                      
|                      
|                      
|                      
|United Kingdom/Ireland |       |   | 2,058,872        |            |                   |  | 11.7          |       |   |   | 4,229,987  |            |  |  | 7.7  |       |   |   | 6,288,859  |            |  |  | 8.7  |      
|                      
|                      
|                      
|                      
|Canada                 |       |   | 383,737          |            |                   |  | 2.2           |       |   |   | 522,715    |            |  |  | 1.0  |       |   |   | 906,452    |            |  |  | 1.3 
|                      
|                      
|                      
|                      
|Other                  |       |   | 151,733          |            |                   |  | .8            |       |   |   | 111,519    |            |  |  | .2   |       |   |   | 263,252    |            |  |  | .4   |      
|                       |       |   |                  |            |                   |  |               |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |      |      
|                       | Total |   | $                | 17,663,709 |                   |  |               | 100.0 | % |   | $          | 54,591,804 |  |  |      | 100.0 | % |   | $          | 72,255,513 |  |  |      | 100.0 | %
|                       |       |   |                  |            |                   |  |               |       |   |   |            |            |  |  |      |       |   |   |            |            |  |  |      |      

NOTE G: PREMISES AND EQUIPMENT

Depreciation expense for the years ended December 31, 2000, 1999, and 1998, was
$187.6 million, $183.9 million, and $172.3 million, respectively.

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 $28.7 million, $33.0 million,
and $33.1 million, for the years ended December 31, 2000, 1999, and 1998,
respectively.

Summary of Premises and Equipment

(dollars in thousands)

|                                          |  |      |           |      |  |   |           |  
|----------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | -
|December 31,                              |  | 2000 |           | 1999
|                                          |  |      |           |     
|Land                                      |  | $    | 185,078   |      |  | $ | 159,955   |  
|                                         
|                                         
|                                         
|                                         
|Buildings and improvements                |  |      | 1,556,110 |      |  |   | 1,429,825 |  
|                                         
|                                         
|                                         
|                                         
|Furniture and equipment                   |  |      | 920,993   |      |  |   | 773,533   |  
|                                          |  |      |           |      |  |   |           |  
|Total                                     |  |      | 2,662,181 |      |  |   | 2,363,313 |  
|                                         
|                                         
|                                         
|                                         
|Accumulated depreciation and amortization |  |      | (881,170  | )    |  |   | (703,867  | )
|                                          |  |      |           |      |  |   |           |  
|Premises and equipment, net               |  | $    | 1,781,011 |      |  | $ | 1,659,446 |  
|                                          |  |      |           |      |  |   |           |  

Future Minimum Rental Payments Under Noncancelable Operating Leases

(dollars in thousands)

|           |                              |   |        |        | 
|---------- | ---------------------------- | - | ------ | ------ | 
|2001       |                              | $ | 26,934 |       
|          
|          
|          
|          
|2002       |                              |   | 19,846 |       
|          
|          
|          
|          
|2003       |                              |   | 14,582 |       
|          
|          
|          
|          
|2004       |                              |   | 11,935 |       
|          
|          
|          
|          
|2005       |                              |   | 10,277 |       
|          
|          
|          
|          
|Thereafter |                              |   |       |       
|           |                              |   |        |       
|           | Total minimum lease payments |   | $      | 83,574 | 
|           |                              |   |        |       

61



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MBNA CORPORATION AND SUBSIDIARIES



---

NOTE H: 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, 1999 and 1998 was an
outstanding $275.0 million receivables financing facility entered into during
1998 which was renewed in 1999. This receivables financing facility was used by
the Corporation to fund an acquisition of loan receivables. This facility was
not renewed by the Corporation in 2000. Loan receivables in the amount of
$417.6 million at December 31, 1999 and $387.4 million at December 31, 1998
were subject to a lien by the provider of the facility.

The short-term deposit notes issued by MBNA Canada are unconditionally and
irrevocably guaranteed as to payment of principal and interest by the Bank.

Summary of Short-Term Borrowings

(dollars in thousands)

|                                                                                            |  |      |         |      |  |      |           |   |  |   |           |  
|------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|Year Ended December 31,                                                                     |  | 2000 |         | 1999 |  | 1998
|                                                                                            |  |      |         |      |  |     
|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 amount outstanding during the year                                                  |  | $    | 57,139  |      |  | $    | 16,832    |   |  | $ | 54,426    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Maximum amount outstanding at any month end                                                 |  |      | 235,000 |      |  |      | 195,000   |   |  |   | 410,000   |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Weighted average interest rate during the year                                              |  |      | 6.30    | %    |  |      | 4.91      | % |  |   | 5.66      | %
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Other Short-Term Borrowings
Balance at year end                                             |  | $    | 159,512 |      |  | $    | 844,004   |   |  | $ | 1,231,195 |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Weighted average interest rate at year end                                                  |  |      | 5.76    | %    |  |      | 5.95      | % |  |   | 5.13      | %
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Average amount outstanding during the year                                                  |  | $    | 511,193 |      |  | $    | 647,544   |   |  | $ | 394,076   |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Maximum amount outstanding at any month end                                                 |  |      | 803,337 |      |  |      | 1,007,165 |   |  |   | 1,231,195 |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Weighted average interest rate during the year                                              |  |      | 5.98    | %    |  |      | 5.48      | % |  |   | 5.83      | %

NOTE I: LONG-TERM DEBT AND BANK NOTES

Long-term debt and bank notes consist of borrowings having an original maturity
of one year or more.

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
$370.0 million of Fixed-Rate Senior Medium-Term Notes outstanding at December
31, 2000, with rates ranging from 6.12% to 7.125%. Interest on the Fixed-Rate
Senior Medium-Term Notes is payable semiannually. The Corporation also had
$635.0 million of Floating-Rate Senior Medium-Term Notes outstanding at
December 31, 2000. These Floating-Rate Senior Medium-Term Notes are priced
between 30 basis points and 66 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, 2000, the three-month
LIBOR was 6.40%.

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
$1.1 billion of Fixed-Rate Bank Notes outstanding at December 31, 2000, with
rates ranging from 6.08% to 7.76%. Interest is payable semiannually. The Bank
also had $1.3 billion of Floating-Rate Bank Notes outstanding at December 31,
2000, with rates priced between 20 basis points and 60 basis points over the
three-month LIBOR. Interest is payable quarterly.

BILATERAL CREDIT FACILITIES

These facilities are direct, unsecured obligations of MBNA Europe, and are 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.

MBNA Europe had a £10.0 million (approximately $16.2 million)
floating-rate facility outstanding at December 31, 1999. This facility was
priced at 17.5 basis points above the three-month Sterling LIBOR and was
payable semiannually. This draw was redeemed in 2000 in accordance with the
terms of the facility.

SYNDICATED CREDIT FACILITY

The syndicated credit facility is an unsecured obligation of MBNA Europe and is
not subordinated to any other obligation of MBNA Europe. Interest is payable
quarterly.

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,
2000, MBNA Canada had CAD$345.1 million (approximately $230.5 million) of
Fixed-Rate Medium-Term Deposit Notes outstanding with interest payable

62



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MBNA CORPORATION AND SUBSIDIARIES



---

Summary of Long-Term Debt and Bank Notes

(dollars in thousands)

|                                                                                                                                                                                                                                                    |                               |      |           |           |  |   |           |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---- | --------- | --------- |  | - | --------- | --------- | 
|December 31,                                                                                                                                                                                                                                        |                               | 2000 |           | 1999     
|                                                                                                                                                                                                                                                    |                               |      |           |          
|Parent Company                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|6 7/8% Senior Notes, maturing in 2005                                                                                                                                                                                                               |                               | $    | 99,586    |           |  | $ | 99,497    |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Senior Medium-Term Notes, with a weighted
average interest rate   of 6.59% and 6.49%, respectively,
maturing in varying amounts from 2001   through 2004                                                                                 |                               |      | 369,207   |           |  |   | 553,693   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Floating-Rate Senior Medium-Term Notes, maturing in
varying amounts from   2001 through 2003                                                                                                                                                        |                               |      | 634,314   |           |  |   | 815,739   |          
|                                                                                                                                                                                                                                                    |                               |      |           |           |  |   |           |          
|                                                                                                                                                                                                                                                    | Total parent company          |      |           | 1,103,107 |  |   |           | 1,468,929 | 
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Subsidiaries                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Bank Notes, with a weighted average interest
rate of 7.41% and   6.76%, respectively, maturing in
varying amounts from 2001 through 2005                                                                                                 |                               |      | 1,126,166 |           |  |   | 885,689   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Floating-Rate Bank Notes, maturing in varying amounts
from 2001   through 2005                                                                                                                                                                      |                               |      | 1,234,968 |           |  |   | 1,491,823 |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Bilateral Credit Facility, with an interest
rate of 7.29%, maturing   in 2001                                                                                                                                                            |                               |      | 799       |           |  |   | 2,784     |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Bilateral Credit Facility, with an interest
rate of 7.2033%, matured   in 2000                                                                                                                                                           |                               |      |          |           |  |   | 16,157    |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Floating-Rate Bilateral Credit Facility                                                                                                                                                                                                             |                               |      |          |           |  |   | 16,157    |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Syndicated Credit Facility, with an interest
rate of 7.645%,    maturing in 2001                                                                                                                                                         |                               |      | 111,855   |           |  |   | 121,178   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Medium-Term Deposit Notes, with a weighted
average interest rate   of 6.46% and 6.17%, respectively,
maturing in varying amounts from 2001   through 2004                                                                                |                               |      | 230,040   |           |  |   | 120,262   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Floating-Rate Medium-Term Deposit Notes, maturing in
varying amounts   from 2001 through 2005                                                                                                                                                       |                               |      | 149,730   |           |  |   | 78,931    |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Fixed-Rate Euro Medium-Term Notes, with a weighted average
interest rate of   .80% on the Japanese yen denominated notes,
maturing in 2002                                                                                                          |                               |      | 47,879    |           |  |   |          |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Floating-Rate Euro Medium-Term Notes, maturing in varying
amounts from   2002 through 2004                                                                                                                                                          |                               |      | 720,419   |           |  |   | 442,145   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|7.25% Subordinated Notes, maturing in 2002                                                                                                                                                                                                          |                               |      | 199,387   |           |  |   | 199,077   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|6.75% Subordinated Notes, maturing in 2008                                                                                                                                                                                                          |                               |      | 247,893   |           |  |   | 247,640   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Subordinated Guaranteed Floating-Rate Notes                                                                                                                                                                                                         |                               |      |          |           |  |   | 54,805    |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Guaranteed Preferred Beneficial Interests in Corporations
Junior Subordinated   Deferrable Interest Debentures, series
A, with an interest rate of 8.278%,   maturing in 2026                                                                      |                               |      | 250,000   |           |  |   | 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 |                               |      | 277,089   |           |  |   | 277,000   |          
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                   
|Guaranteed Preferred Beneficial Interests in Corporations
Junior Subordinated   Deferrable Interest Debentures, series
C, with an interestrate of 8.25%,   maturing in 2027                                                                        |                               |      | 36,303    |           |  |   | 36,303    |          
|                                                                                                                                                                                                                                                    |                               |      |           |           |  |   |           |          
|                                                                                                                                                                                                                                                    | Long-term debt and bank notes |      | $         | 5,735,635 |  |   | $         | 5,708,880 | 
|                                                                                                                                                                                                                                                    |                               |      |           |           |  |   |           |          

semiannually. MBNA Canada also had CAD$225.0 million (approximately $150.2
million) of Floating-Rate Medium-Term Deposit Notes outstanding at December 31,
2000. These Floating-Rate Medium-Term Deposit Notes are priced between 55 basis
points and 73 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, 2000, the
ninety-day Bankers Acceptance Rate was 5.72%.

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, 2000, MBNA Europe had outstanding JPY5.5 billion (approximately
$47.9 million) of Fixed-Rate Euro Medium-Term Notes, with interest payable
annually.

At December 31, 2000, 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, 2000 were £203.5
million (approximately $303.5 million), with interest priced between 37.5 basis
points and 62 basis points over the three-month Sterling LIBOR, EUR315.5
million (approximately $293.6 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 $38.4 million), with interest
priced at 50 basis points over the three-month Hong Kong Interbank Offered Rate
(HIBOR), JPY7.0 billion (approximately $60.9 million), with interest priced
between 25 basis points and 35 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 also had $10.0 million of
Floating-Rate Euro Medium-Term Notes outstanding at December 31, 2000, with
interest priced at 45 basis points over the six-month LIBOR and payable
semiannually.

At December 31, 2000, the three-month Sterling LIBOR was 5.90%,
the three-month EURIBOR was 4.85%, the three-month HIBOR was 5.93%, the
three-month JPY LIBOR was .55%, and the six-month LIBOR was 6.20%.

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 qualify as Tier 2 Capital, which is included in
Total Capital, under the risk-based capital guidelines for both banks and bank
holding companies.

63



---



MBNA CORPORATION AND SUBSIDIARIES



---

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.

SUBORDINATED GUARANTEED FLOATING-RATE NOTES

During 2000, MBNA Europe redeemed the £34.0 million
(approximately $54.9 million) of Subordinated Guaranteed Floating-Rate Notes
that were outstanding at December 31, 1999 in accordance with the terms of the
notes. Interest on these notes was priced between 100 basis points and 145
basis points over the three-month Sterling LIBOR for the first five years, with
a 50 basis point increase for the last five years. These notes were issued by
MBNA Europe in 1995 and were unsecured. Interest on these notes was payable
quarterly or semiannually.

The Subordinated Guaranteed Floating-Rate Notes were unconditionally and
irrevocably guaranteed on a subordinated basis by the Bank. The obligations of
the Bank, under this guarantee, also constituted unsecured obligations,
subordinated to the claims of all senior creditors of the Bank.

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.

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 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
|     |  | Company |         | Subsidiaries   
|     |  |         |         |                
|2001 |  | $       | 241,000 |                 |  | $    | 910,908   | 
|    
|    
|    
|    
|2002 |  |         | 345,000 |                 |  |      | 1,660,641 | 
|    
|    
|    
|    
|2003 |  |         | 384,000 |                 |  |      | 1,096,278 | 
|    
|    
|    
|    
|2004 |  |         | 35,000  |                 |  |      | 480,674   | 
|    
|    
|    
|    
|2005 |  |         | 100,000 |                 |  |      | 789,389   | 

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.

64



---



MBNA CORPORATION AND SUBSIDIARIES



---

NOTE J: 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. 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 $12.2 billion and $8.0
billion of such amounts outstanding at December 31, 2000 and 1999,
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 2000 and 1999, the Corporation sold credit card and other consumer loans
in numerous securitization transactions. At December 31, 2000 and 1999, the
Corporations securitization trusts had approximately $67.2 billion and $53.5
billion, respectively, of investor principal outstanding. The Corporation
retains servicing responsibilities 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 future
cash flows arising after the investors in the securitization trust receive the
return for which they have contracted and credit losses are absorbed. The
investors and the securitization trusts have no recourse to the Corporations
assets 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.

In accordance with Statement No. 125, 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 cash flows from the trust and is reported at estimated
market 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
securitzed loans outstanding 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 statements of income
and includes the interest-only strip receivable in accounts receivable from
securitizations on the consolidated statements of financial condition.
Transaction costs incurred by the Corporation are immediately recognized as a
reduction to securitization income at the time of the securitization
transaction. Securitization income also includes the contractual and other fees
received by the Corporation for the servicing of the securitized loans.

The net incremental change in the interest-only strip receivable recognized by
the Corporation depends in part on the previous carrying amount of the
financial assets involved in the transfer, which is allocated between the
assets sold and the retained interests, based on their relative fair value at
the date of transfer. Quoted market prices are generally not available for
retained interests. Therefore, the Corporation estimates the fair value of
these retained interests based on the present value of expected future cash
flows using managements judgement in determining certain key assumptions and
estimates. These key assumptions and estimates include projections concerning
the annual percentage rates charged to Customers, late fee yields, charge-off
experience, contractual servicing fees, and cost of funds, in order to
determine the excess spread to be received by the Corporation. Other key
assumptions and estimates used by the Corporation include loan payment rates,
which are used to determine the estimated life of the securitized loan, and a
discount rate commensurate with the risks involved. Based on these key
assumptions and estimates and the Corporations securitization activity, the
net incremental change in the interest-only strip receivable recognized by the
Corporation in securitization income, net of securitization transaction costs,
was a $41.6 million increase in 2000, a $23.3 million increase in 1999, and a
$17.9 million increase in 1998. The Corporation periodically reviews the key
assumptions and estimates used in determining the interest-only strip
receivable. If these assumptions change or are not met, the interest-only strip
receivable and securitization income would be affected. At December 31, 2000
and 1999, the amount of the interest-only strip receivable was $713.3 million
and $579.1 million, respectively.

Securitization Key Assumptions and Sensitivities

(dollars in thousands)

|                                          |                                            |      |             |         |                |   |         |        | 
|----------------------------------------- | ------------------------------------------ | ---- | ----------- | ------- | -------------- | - | ------- | ------ | 
|Year Ended December 31,                   |                                            | 2000
|                                          |                                            |     
|                                          |                                            |      | Credit Card |         | Other Consumer
|                                          |                                            |      |             |         |               
|Interest-only strip receivable            |                                            | $    | 570,586     |         |                | $ | 142,735 |       
|                                         
|                                         
|                                         
|                                         
|Weighted-average life (in years)          |                                            |      | .6          |         |                |   | 1.6     |       
|                                         
|                                         
|                                         
|                                         
|Loan payment rate (weighted average rate) |                                            |      | 13.88       | %       |                |   | 5.26    | %     
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 10% adverse change |      | $           | 42,923  |                |   | $       | 11,585 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 20% adverse change |      |             | 81,712  |                |   |         | 21,288 | 
|                                         
|                                         
|                                         
|                                         
|Credit losses (a) (weighted average rate) |                                            |      | 4.31        | %       |                |   | 6.17    | %     
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 10% adverse change |      | $           | 81,288  |                |   | $       | 24,582 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 20% adverse change |      |             | 162,661 |                |   |         | 49,561 | 
|                                         
|                                         
|                                         
|                                         
|Excess spread (weighted average rate)     |                                            |      | 3.04        | %       |                |   | 3.57    | %     
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 10% adverse change |      | $           | 57,715  |                |   | $       | 14,274 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 20% adverse change |      |             | 113,832 |                |   |         | 28,547 | 
|                                         
|                                         
|                                         
|                                         
|Discount rate (weighted average rate)     |                                            |      | 12.00       | %       |                |   | 12.00   | %     
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 10% adverse change |      | $           | 1,730   |                |   | $       | 949    | 
|                                         
|                                         
|                                         
|                                         
|                                          | Impact on fair value of 20% adverse change |      |             | 3,453   |                |   |         | 1,887  | 



---

|(a) |  | Credit losses exclude the impact of recoveries.Securitization Cash Flows
(dollars in billions)
|--- |  | ----------------------------------------------------------------------------------------------

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 Cash Flows

(dollars in thousands)

|                                                           |  |      |      | 
|---------------------------------------------------------- |  | ---- | ---- | 
|Year Ended December 31,                                    |  | 2000
|                                                           |  |     
|Proceeds from new securitizations                          |  | $    | 15.8 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Collections reinvested in revolving-period securitizations |  |      | 83.3 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Contractual servicing fees received                        |  |      | 1.1  | 
|                                                          
|                                                          
|                                                          
|                                                          
|Cash flows received on retained interests                  |  |      | 2.8  | 

65



---



MBNA CORPORATION AND SUBSIDIARIES



---

Supplemental Loan Information

(dollars in thousands)

|                              |                |                         |            |             |             |            |          |            |            |  
|----------------------------- | -------------- | ----------------------- | ---------- | ----------- | ----------- | ---------- | -------- | ---------- | ---------- | -
|Year Ended December 31,       |                | 2000                   
|                              |                |                        
|                              |                |                         |            | Loans       |             | Loans     
|                              |                |                         |            | Outstanding |             | Delinquent
|                              |                |                         |            |             |             |           
|Managed loans:               
|                             
|                             
|                             
|                             
|                              | Credit card    |                         | $          | 78,124,016  |             |            | $        | 3,420,357  |           
|                             
|                             
|                             
|                             
|                              | Other consumer |                         |            | 10,666,705  |             |            |          | 566,181    |           
|                              |                |                         |            |             |             |            |          |           
|                              |                | Total managed loans     |            |             | 88,790,721  |            |          |            | 3,986,538  |  
|                             
|                             
|                             
|                             
|Securitized loans:           
|                             
|                             
|                             
|                             
|                              | Credit card    |                         |            | (63,076,067 | )           |            |          | (2,807,219 | )         
|                             
|                             
|                             
|                             
|                              | Other consumer |                         |            | (5,759,817  | )           |            |          | (375,639   | )         
|                              |                |                         |            |             |             |            |          |           
|                              |                | Total securitized loans |            |             | (68,835,884 | )          |          |            | (3,182,858 | )
|                              |                |                         |            |             |             |            |          |           
|Loan receivables              |                |                         | 19,954,837 |             |             |            | 803,680  |           
|                             
|                             
|                             
|                             
|Loans held for securitization |                |                         | (8,271,933 | )           |             |            | (348,738 | )         
|                              |                |                         |            |             |             |            |          |           
|Loan portfolio                |                | $                       | 11,682,904 |             |             | $          | 454,942  |           
|                              |                |                         |            |             |             |            |          |           

|                   |                |                         |            |             |             |            |         |            |            |  
|------------------ | -------------- | ----------------------- | ---------- | ----------- | ----------- | ---------- | ------- | ---------- | ---------- | -
|                   |                |                         |            | Average     |             | Net Credit
|                   |                |                         |            | Amount      |             | Losses    
|                   |                |                         |            |             |             |           
|Managed loans:    
|                  
|                  
|                  
|                  
|                   | Credit card    |                         | $          | 68,661,028  |             |            | $       | 2,934,941  |           
|                  
|                  
|                  
|                  
|                   | Other consumer |                         |            | 8,783,958   |             |            |         | 465,681    |           
|                   |                |                         |            |             |             |            |         |           
|                   |                | Total managed loans     |            |             | 77,444,986  |            |         |            | 3,400,622  |  
|                  
|                  
|                  
|                  
|Securitized loans:
|                  
|                  
|                  
|                  
|                   | Credit card    |                         |            | (54,790,675 | )           |            |         | (2,623,807 | )         
|                  
|                  
|                  
|                  
|                   | Other consumer |                         |            | (4,936,163  | )           |            |         | (334,762   | )         
|                   |                |                         |            |             |             |            |         |           
|                   |                | Total securitized loans |            |             | (59,726,838 | )          |         |            | (2,958,569 | )
|                   |                |                         |            |             |             |            |         |           
|Loan receivables   |                | $                       | 17,718,148 |             |             | $          | 442,053 |           
|                   |                |                         |            |             |             |            |         |           

Included in accounts receivable from securitizations in the consolidated
statements of financial condition at December 31, 2000 and 1999, were $1.0
billion and $417.9 million, respectively, of receivables subject to a lien by
the providers of the credit enhancement facility for individual
securitizations. The providers of the credit enhancement have no other recourse
to the Corporation. The Corporation does not receive collateral from any party
to the securitization, and the Corporation does not have any risk of
counterparty nonperformance.

NOTE K: 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 make contributions sufficient to achieve
a target-funded ratio on an accumulated benefit obligation basis between 130%
and 140%, 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,                                                                   |                                               | 2000 |         | 1999   
|                                                                                          |                                               |      |         |        
|Change in Benefit Obligation                                                             
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Net benefit obligation, beginning of year                                                 |                                               | $    | 210,218 |         |   | $ | 212,158 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Service costbenefits earned during the year  |      |         | 33,141  |   |   |         | 36,481  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Interest cost on projected benefit obligation |      |         | 20,777  |   |   |         | 16,554  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Actuarial loss (gain)                         |      |         | 6,991   |   |   |         | (60,978 | )
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Plan amendments                               |      |         | 18,416  |   |   |         | 8,747   |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Gross benefits paid                           |      |         | (2,854  | ) |   |         | (2,744  | )
|                                                                                          |                                               |      |         |         |   |   |         |        
|Net benefit obligation, end of year                                                       |                                               | $    | 286,689 |         |   | $ | 210,218 |        
|                                                                                          |                                               |      |         |         |   |   |         |        
|Change in Plan Assets                                                                    
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Fair value of plan assets, beginning of year                                              |                                               | $    | 200,287 |         |   | $ | 139,874 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Actual return on plan assets                  |      |         | 30,169  |   |   |         | 31,728  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Employer contributions                        |      |         | 35,898  |   |   |         | 31,429  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Gross benefits paid                           |      |         | (2,854  | ) |   |         | (2,744  | )
|                                                                                          |                                               |      |         |         |   |   |         |        
|Fair value of plan assets, end of year                                                    |                                               | $    | 263,500 |         |   | $ | 200,287 |        
|                                                                                          |                                               |      |         |         |   |   |         |        
|Funded status                                                                             |                                               | $    | (23,189 | )       |   | $ | (9,931  | )      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Unrecognized net actuarial gain                                                           |                                               |      | (47,025 | )       |   |   | (43,448 | )      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Unrecognized prior service cost                                                           |                                               |      | 27,127  |         |   |   | 10,112  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Unrecognized net transition obligation                                                    |                                               |      | 2,800   |         |   |   | 3,146   |        
|                                                                                          |                                               |      |         |         |   |   |         |        
|                                                                                          | Net amount recognized                         |      | $       | (40,287 | ) |   | $       | (40,121 | )
|                                                                                          |                                               |      |         |         |   |   |         |        
|Amounts Recognized in the Consolidated                                                   
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Statements of Financial Condition                                                        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Prepaid benefit cost                                                                      |                                               | $    | 24,834  |         |   | $ | 7,137   |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Accrued benefit cost                                                                      |                                               |      | (65,121 | )       |   |   | (47,258 | )      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Additional minimum liability                                                              |                                               |      | (19,369 | )       |   |   | (7,982  | )      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Intangible asset                                                                          |                                               |      | 19,369  |         |   |   | 7,982   |        
|                                                                                          |                                               |      |         |         |   |   |         |        
|                                                                                          | Net amount recognized                         |      | $       | (40,287 | ) |   | $       | (40,121 | )
|                                                                                          |                                               |      |         |         |   |   |         |        
|Significant Actuarial Assumptions Used in
the Corporations   Defined Benefit Plans were:
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Discount rate                                                                             |                                               |      | 8.00    | %       |   |   | 8.00    | %      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Rate of compensation increase                                                             |                                               |      | 6.00    |         |   |   | 6.00    |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Expected return on plan assets                                                            |                                               |      | 9.50    |         |   |   | 9.00    |        

The accumulated benefit obligation in excess of the fair value of SERP plan
assets was $84.5 million at December 31, 2000, and $55.2 million at December
31, 1999. There were no plan assets
for the SERP plan at December 31, 2000 and 1999.

Components of Net Periodic Benefit Cost

(dollars in thousands)

|                                              |                           |      |         |        |  |      |         |        |  |   |         |        | 
|--------------------------------------------- | ------------------------- | ---- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|Year Ended December 31,                       |                           | 2000 |         | 1999   |  | 1998
|                                              |                           |      |         |        |  |     
|Service costbenefits earned
during the year  |                           | $    | 33,141  |        |  | $    | 36,481  |        |  | $ | 23,151  |       
|                                             
|                                             
|                                             
|                                             
|Interest cost on projected benefit
obligation |                           |      | 20,777  |        |  |      | 16,554  |        |  |   | 11,937  |       
|                                             
|                                             
|                                             
|                                             
|Expected return on plan assets                |                           |      | (17,961 | )      |  |      | (12,929 | )      |  |   | (10,031 | )     
|                                             
|                                             
|                                             
|                                             
|Net amortization and deferral                 |                           |      | 108     |        |  |      | 1,051   |        |  |   | 464     |       
|                                              |                           |      |         |        |  |      |         |        |  |   |         |       
|                                              | Net periodic benefit cost |      | $       | 36,065 |  |      | $       | 41,157 |  |   | $       | 25,521 | 
|                                              |                           |      |         |        |  |      |         |        |  |   |         |       

66



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MBNA CORPORATION AND SUBSIDIARIES



---

In 2000, the Corporation increased the expected rate of return on plan assets
to 9.50% from 9.00% in 1999. These rates reflect the current rate environment
and a change in the Corporations investment strategy of the plan assets.

In 1999, the Corporation increased the discount rate used to value its
projected benefit obligation for both the pension and SERP plans to reflect the
then current rate environment. This change in assumption did not have a
material impact on the Corporations consolidated financial statements for
1999.

OTHER PLANS

The Corporations foreign bank subsidiaries each have pension plans 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 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. 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 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.
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.
Additionally, eligible participants may make pretax and after-tax
contributions, with contributions up to 6% of base salary matched 50% by the
Corporation. The Corporation charged $18.7 million, $16.5 million, and $14.8
million in 2000, 1999, and 1998, 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 as of 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. Expenses
charged to other operating expense were not material to the Corporations
consolidated financial statements.

NOTE L: 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. Beginning in 1997, all stock options and restricted stock awards
were granted from the 1997 Plan.

An amendment to the 1997 Plan approved by shareholders in 1999 authorizes,
subject to certain exceptions and additional limitations, grants of stock
options and restricted shares for an indefinite number of shares of common
stock, so long as 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 amendment to the 1997 Plan. At
December 31, 2000 and 1999, the amount of shares of common stock available for
future grants under the 1997 Plan were 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.

During 1998, the shareholders approved an amendment to the 1997 Plan, which
increased the number of shares of the Corporations Common Stock which may be
issued pursuant to grants made under the 1997 Plan from 24.8 million shares to
32.3 million shares. At December 31, 1998 the amount of shares of common stock
available for future grants under the 1997 Plan was 4.8 million shares.

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 are exercisable immediately.

During 2000 and 1999, there were no shares of performance-based common stock
options granted under the 1997 Plan. Performance-based common stock options for
1.8 million shares were granted in 1998. These stock options become exercisable
when the Corporation achieves certain net income targets, net income and stock
price targets, or outstanding managed loan targets. If these conditions
are not achieved, these options then become exercisable for one
day on the day before their termination date.

The Corporation granted 1.6 million stock options in 2000, 2.0 million stock
options in 1999, and 2.3 million stock options in 1998 which were immediately
exercisable following the effective date of the grant. Also during 1999, the
Corporation granted 25,000 stock options which became exercisable in February
2000. In 1998, the Corporation granted 225,000 stock options which become
exercisable in October 2001, and 75,000 stock options which became exercisable
in three equal installments beginning in January 1999.

67



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---

Summary of Stock Option Plans Activity

(shares in thousands)

|                                                                 |           |   |           |        |                  |   |       |       | 
|---------------------------------------------------------------- | --------- | - | --------- | ------ | ---------------- | - | ----- | ----- | 
|                                                                 |           |   | Number    |        | Weighted Average
|                                                                 |           |   | of Shares |        | Exercise Price  
|                                                                 |           |   |           |        |                 
|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      |       
|                                                                 |           |   |           |       
|1998                                                            
|                                                                
|                                                                
|                                                                
|                                                                
|Options outstanding, beginning of year                           |           |   | 65,261    |        |                  | $ | 7.47  |      
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Granted   |   |           | 10,483 |                  |   |       | 22.07 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Exercised |   |           | (9,821 | )                |   |       | 4.32  | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Canceled  |   |           | (1,501 | )                |   |       | 13.52 | 
|                                                                 |           |   |           |       
|Options outstanding, end of year                                 |           |   | 64,422    |        |                  |   | 10.19 |      
|                                                                 |           |   |           |       
|Options exercisable, end of year                                 |           |   | 35,770    |       
|                                                                 |           |   |           |       
|Weighted average fair value of options
granted   during the year |           | $ | 6.99      |       
|                                                                 |           |   |           |       

Restricted shares were also issued under the 1997 Plan to the Corporations
senior officers. A total of 2.0 million common shares, 2.0 million common
shares, and 1.5 million common shares, net
of forfeited restricted shares, were issued in 2000, 1999, and 1998,
respectively. The restricted common shares issued had an approximate aggregate
market value of $54.3 million, $56.6 million, and $31.8 million at the time of
grant for 2000, 1999, and 1998, 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, retirement, or are
released sooner, any remaining unamortized market value of the restricted
shares is immediately expensed. At December 31, 2000 and 1999, the unamortized
compensation expense related to the restricted stock awards was $146.6 million
and $114.6 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. However, 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, 2000        |  |  |           |  |  |                  | Options Outstanding |  |                  | Options Exercisable
|                         |  |  |           |  |  |                 
|                         |  |  |           |  |  |                  |                     |  |                  |                     |      |           | Weighted Average
|                         |  |  | Number    |  |  | Remaining        |                     |  | Weighted Average |                     |      | Number    |                  |        | Weighted Average
|Range of Exercise Prices |  |  | of Shares |  |  | Contractual Life |                     |  | Exercise Price   |                     |      | of Shares |                  |        | Exercise Price  
|                         |  |  |           |  |  |                  |                     |  |                  |                     |      |           |                  |        |                 
|$1.00 to $4.99           |  |  | 12,179    |  |  | 3.1              | years               |  |                  | $                   | 4.35 |           |                  | 12,179 |                  |  | $ | 4.35
|                        
|                        
|                        
|                        
|5.00 to 9.99             |  |  | 14,431    |  |  | 4.9              |                     |  | 7.26             |                     |      | 14,005    |                  |        | 7.23            
|                        
|                        
|                        
|                        
|10.00 to 14.99           |  |  | 11,381    |  |  | 6.3              |                     |  | 13.13            |                     |      | 3,715     |                  |        | 13.07           
|                        
|                        
|                        
|                        
|15.00 to 19.99           |  |  | 2,107     |  |  | 7.1              |                     |  | 18.23            |                     |      | 422       |                  |        | 17.77           
|                        
|                        
|                        
|                        
|20.00 to 24.99           |  |  | 18,071    |  |  | 8.2              |                     |  | 21.60            |                     |      | 9,210     |                  |        | 21.83           
|                        
|                        
|                        
|                        
|25.00 to 29.99           |  |  | 9,240     |  |  | 8.4              |                     |  | 26.70            |                     |      | 4,866     |                  |        | 26.70           
|                        
|                        
|                        
|                        
|30.00 to 35.00           |  |  | 540       |  |  | 8.7              |                     |  | 30.23            |                     |      | 108       |                  |        | 30.23           
|                         |  |  |           |  |  |                  |                     |  |                  |                     |      |           |                  |        |                 
|1.00 to 35.00            |  |  | 67,949    |  |  |                  |                     |  |                  |                     |      | 44,505    |                  |        |                 
|                         |  |  |           |  |  |                  |                     |  |                  |                     |      |           |                  |        |                 

68



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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 following weighted average assumptions used in the
Black-Scholes option pricing model for grants in 2000, 1999, and 1998, were
dividend yield of 1.12%, 1.25%, and 1.59%, expected volatility of 34.90%,
34.39%, and 30.81%, risk-free interest rate of 6.66%, 5.73%, and 5.44%, and
expected life of 5.4 years, 5.4 years, and 5.1 years, respectively.

If the fair value of employee stock option grants determined in accordance with
Statement No. 123 had been included in operating expenses in 2000, 1999, and
1998, 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 2000, 1999, and 1998 may not be representative of the
effects on pro forma  net income for future years.

Pro Forma  Net Income and Earnings Per Common Share

(dollars in thousands, except per share amounts)

|                                          |           |      |           |           |  |      |           |         |  |   |         |         | 
|----------------------------------------- | --------- | ---- | --------- | --------- |  | ---- | --------- | ------- |  | - | ------- | ------- | 
|Year Ended December 31,                   |           | 2000 |           | 1999      |  | 1998
|                                          |           |      |           |           |  |     
|Net Income    
As reported                |           | $    | 1,312,532 |           |  | $    | 1,024,423 |         |  | $ | 776,266 |        
|                                         
|                                         
|                                         
|                                         
|                                          | Pro forma |      |           | 1,270,946 |  |      |           | 986,547 |  |   |         | 746,138 | 
|                                         
|                                         
|                                         
|                                         
|Earnings Per Common Share    
As reported |           |      | 1.58      |           |  |      | 1.26      |         |  |   | 1.01    |        
|                                         
|                                         
|                                         
|                                         
|                                          | Pro forma |      |           | 1.53      |  |      |           | 1.21    |  |   |         | .97     | 
|                                         
|                                         
|                                         
|                                         
|Earnings Per Common Share               
|                                         
|                                         
|                                         
|                                         
|Assuming Dilution    
As reported         |           |      | 1.53      |           |  |      | 1.21      |         |  |   | .97     |        
|                                         
|                                         
|                                         
|                                         
|                                          | Pro forma |      |           | 1.49      |  |      |           | 1.16    |  |   |         | .93     | 

NOTE M: 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, 2000
and 1999. The Corporation also had 4.0 million shares of Adjustable Rate
Cumulative Preferred Stock, Series B, outstanding at December 31, 2000 and
1999. 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. The shares of the Series A Preferred
Stock are redeemable, in whole or in part, solely at the option of the
Corporation on or after January 15, 2001, 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. The shares of the Series B
Preferred Stock are redeemable, in whole or in part, solely at the option of
the Corporation on or after October 15, 2001, at a price of $25 per share, plus
accrued and unpaid dividends. The Series B Preferred Stock may also be redeemed
in whole, at the option of the Corporation, in the event of certain amendments
to the Tax Code with respect to the dividends-received deduction.

Preferred Stock Dividend Summary

|                 |  |         |                  |          |  |                 |      |          |  |                 |        |  |  |  |      |   |  |   |        | 
|---------------- |  | ------- | ---------------- | -------- |  | --------------- | ---- | -------- |  | --------------- | ------ |  |  |  | ---- | - |  | - | ------ | 
|                 |  |         |                  |          |  | Series A        |      | Series B
|                 |  |         |                  |          |  |                 |      |         
|Declaration      |  | Payment |                  | Dividend |  | Dividend per    |      | Dividend |  | Dividend per   
|Date             |  | Date    |                  | Rate     |  | Preferred Share |      | Rate     |  | Preferred Share
|                 |  |         |                  |          |  |                 |      |          |  |                
|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 | 
|                
|                
|                
|                
|October 13, 1998 |  |         | January 15, 1999 |          |  |                 | 7.50 |          |  |                 | .46875 |  |  |  | 5.50 |   |  |   | .34380 | 
|                
|                
|                
|                
|July 14, 1998    |  |         | October 15, 1998 |          |  |                 | 7.50 |          |  |                 | .46875 |  |  |  | 5.58 |   |  |   | .34900 | 
|                
|                
|                
|                
|April 14, 1998   |  |         | July 15, 1998    |          |  |                 | 7.50 |          |  |                 | .46875 |  |  |  | 5.85 |   |  |   | .36540 | 
|                
|                
|                
|                
|January 13, 1998 |  |         | April 15, 1998   |          |  |                 | 7.50 |          |  |                 | .46875 |  |  |  | 5.86 |   |  |   | .36600 | 

69



---



MBNA CORPORATION AND SUBSIDIARIES



---

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.

COMMON STOCK

On January 10, 2001, the Corporations Board of Directors declared a quarterly
dividend of $.09 per common share, payable April 1, 2001 to stockholders of
record as of March 15, 2001.

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 N: 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

Capital Adequacy

(dollars in thousands)

|                                          |                              |  |        |           |                   |  |                   |       |       |  |             |           |                         |  |  |      |   |  |                        |           |   |  |  |       |  
|----------------------------------------- | ---------------------------- |  | ------ | --------- | ----------------- |  | ----------------- | ----- | ----- |  | ----------- | --------- | ----------------------- |  |  | ---- | - |  | ---------------------- | --------- | - |  |  | ----- | -
|                                          |                              |  |        |           |                   |  |                   |       |       |  |             |           |                         |  |  |      |   |  | To Be Well-Capitalized
|                                          |                              |  |        |           |                   |  |                   |       |       |  | For Capital |           | Under Prompt Corrective
|                                          |                              |  | Actual |           | Adequacy Purposes |  | Action Provisions
|                                          |                              |  |        |           |                   |  |                  
|                                          |                              |  | Amount |           | Ratio             |  | Amount            |       | Ratio |  | Amount      |           | Ratio                  
|                                          |                              |  |        |           |                   |  |                   |       |       |  |             |           |                        
|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  |  
|                                         
|                                         
|                                         
|                                         
|December 31, 1999                        
|                                         
|                                         
|                                         
|                                         
|Tier 1 Capital (to Risk-Weighted Assets):
|                                         
|                                         
|                                         
|                                         
|                                          | MBNACorporation              |  |        | 4,380,971 |                   |  |                   | 14.72 |       |  |             | 1,190,282 |                         |  |  | 4.00 |   |  |                        | (a        | )
|                                         
|                                         
|                                         
|                                         
|                                          | MBNAAmerica Bank, N.A        |  |        | 3,175,442 |                   |  |                   | 11.06 |       |  |             | 1,148,580 |                         |  |  | 4.00 |   |  |                        | 1,722,870 |   |  |  | 6.00  |  
|                                         
|                                         
|                                         
|                                         
|                                          | MBNA America (Delaware), N.A |  |        | (b        | )                 |  |                   | (b    | )     |  |             | (b        | )                       |  |  | 4.00 |   |  |                        | (b        | ) |  |  | 6.00  |  
|                                         
|                                         
|                                         
|                                         
|Total Capital (to Risk-Weighted Assets): 
|                                         
|                                         
|                                         
|                                         
|                                          | MBNACorporation              |  |        | 5,064,201 |                   |  |                   | 17.02 |       |  |             | 2,380,563 |                         |  |  | 8.00 |   |  |                        | (a        | )
|                                         
|                                         
|                                         
|                                         
|                                          | MBNAAmerica Bank, N.A        |  |        | 3,858,215 |                   |  |                   | 13.44 |       |  |             | 2,297,160 |                         |  |  | 8.00 |   |  |                        | 2,871,450 |   |  |  | 10.00 |  
|                                         
|                                         
|                                         
|                                         
|                                          | MBNA America (Delaware), N.A |  |        | (b        | )                 |  |                   | (b    | )     |  |             | (b        | )                       |  |  | 8.00 |   |  |                        | (b        | ) |  |  | 10.00 |  
|                                         
|                                         
|                                         
|                                         
|Tier 1 Capital (to Average Assets):      
|                                         
|                                         
|                                         
|                                         
|                                          | MBNACorporation              |  |        | 4,380,971 |                   |  |                   | 14.90 |       |  |             | 1,176,244 |                         |  |  | 4.00 |   |  |                        | (a        | )
|                                         
|                                         
|                                         
|                                         
|                                          | MBNAAmerica Bank, N.A        |  |        | 3,175,442 |                   |  |                   | 11.61 |       |  |             | 1,094,479 |                         |  |  | 4.00 |   |  |                        | 1,368,099 |   |  |  | 5.00  |  
|                                         
|                                         
|                                         
|                                         
|                                          | MBNA America (Delaware), N.A |  |        | (b        | )                 |  |                   | (b    | )     |  |             | (b        | )                       |  |  | 4.00 |   |  |                        | (b        | ) |  |  | 5.00  |  



---

|(a) |  | Not applicable for bank holding companies.                                                                            
|--- |  | ----------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | The capital ratios of MBNA America (Delaware), N.A. are not
presented for 1999 due to the immateriality of its assets.

70



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MBNA CORPORATION AND SUBSIDIARIES



---

other factors. At December 31, 2000 and 1999, 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.
There are no conditions or events that have occurred since December 31, 2000
that have changed the Banks or MBNA Delawares classification.

NOTE O: 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.

NOTE P: 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.

NOTE Q: 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
2000 and 1999, the average amount of these reserves was $7.5 million and $8.8
million, respectively, after deducting currency and coin holdings.

Included in the Corporations interest-earning time deposits at December 31,
2000 was $35.1 million 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 outstanding 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 for consecutive
periods covering

Other Comprehensive Income Components

(dollars in thousands)

|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |         |  
|----------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ---- | ------- | ------- | - | ---- | ------- | ------- | - | - | ------ | ------- | -
|Year Ended December 31,                                                                                     |                                                  | 2000 |         | 1999    |   | 1998
|                                                                                                            |                                                  |      |         |         |   |     
|Before Tax
Foreign currency translation                                                                     |                                                  | $    | (42,640 | )       |   | $    | (6,738  | )       |   | $ | (510   | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Net unrealized gains (losses) on investment securities available-for-sale
and other   financial instruments |                                                  |      | 26,191  |         |   |      | (16,164 | )       |   |   | (7,332 | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Minimum benefit plan liability adjustment                                                                   |                                                  |      |        |         |   |      | 7,205   |         |   |   | (7,205 | )      
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        
|                                                                                                            | Other comprehensive income, before tax           |      | $       | (16,449 | ) |      | $       | (15,697 | ) |   | $      | (15,047 | )
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        
|Tax Expense (Benefit)
Foreign currency translation                                                          |                                                  | $    |        |         |   | $    |        |         |   | $ | (8     | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Net unrealized gains (losses) on investment securities available-for-sale
and other   financial instruments |                                                  |      | 9,515   |         |   |      | (5,760  | )       |   |   | (2,709 | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Minimum benefit plan liability adjustment                                                                   |                                                  |      |        |         |   |      | 2,630   |         |   |   | (2,630 | )      
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        
|                                                                                                            | Other comprehensive income tax expense (benefit) |      | $       | 9,515   |   |      | $       | (3,130  | ) |   | $      | (5,347  | )
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        
|Net of Tax
Foreign currency translation                                                                     |                                                  | $    | (42,640 | )       |   | $    | (6,738  | )       |   | $ | (502   | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Net unrealized gains (losses) on investment securities available-for-sale
and other   financial instruments |                                                  |      | 16,676  |         |   |      | (10,404 | )       |   |   | (4,623 | )      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Minimum benefit plan liability adjustment                                                                   |                                                  |      |        |         |   |      | 4,575   |         |   |   | (4,575 | )      
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        
|                                                                                                            | Other comprehensive income, net of tax           |      | $       | (25,964 | ) |      | $       | (12,567 | ) |   | $      | (9,700  | )
|                                                                                                            |                                                  |      |         |         |   |      |         |         |   |   |        |        

71



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MBNA CORPORATION AND SUBSIDIARIES



---

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, 2000, the amount of retained earnings
available for declaration and payment of dividends from the Bank to the
Corporation was $1.8 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, 2000. If this facility had been drawn upon at December 31,
2000, the amount of retained earnings available for declaration of dividends
would have been further limited to $685.6 million.

NOTE R: OTHER OPERATING EXPENSE

Other Expense Component of Other Operating Expense

(dollars in thousands)

|                                  |                               |      |         |           |  |      |         |           |  |   |         |           | 
|--------------------------------- | ----------------------------- | ---- | ------- | --------- |  | ---- | ------- | --------- |  | - | ------- | --------- | 
|Year Ended December 31,           |                               | 2000 |         | 1999      |  | 1998
|                                  |                               |      |         |           |  |     
|Purchased services                |                               | $    | 358,688 |           |  | $    | 312,936 |           |  | $ | 226,773 |          
|                                 
|                                 
|                                 
|                                 
|Advertising                       |                               |      | 224,582 |           |  |      | 211,263 |           |  |   | 146,896 |          
|                                 
|                                 
|                                 
|                                 
|Collection                        |                               |      | 41,960  |           |  |      | 40,692  |           |  |   | 31,987  |          
|                                 
|                                 
|                                 
|                                 
|Stationery and supplies           |                               |      | 39,963  |           |  |      | 36,779  |           |  |   | 32,376  |          
|                                 
|                                 
|                                 
|                                 
|Service bureau                    |                               |      | 55,217  |           |  |      | 46,080  |           |  |   | 35,159  |          
|                                 
|                                 
|                                 
|                                 
|Postage and delivery              |                               |      | 287,368 |           |  |      | 280,356 |           |  |   | 194,321 |          
|                                 
|                                 
|                                 
|                                 
|Telephone usage                   |                               |      | 75,785  |           |  |      | 73,552  |           |  |   | 60,538  |          
|                                 
|                                 
|                                 
|                                 
|Loan receivable fraud losses      |                               |      | 164,027 |           |  |      | 102,604 |           |  |   | 81,958  |          
|                                 
|                                 
|                                 
|                                 
|Amortization of intangible assets |                               |      | 273,219 |           |  |      | 170,636 |           |  |   | 54,155  |          
|                                 
|                                 
|                                 
|                                 
|Computer software                 |                               |      | 71,052  |           |  |      | 58,987  |           |  |   | 49,419  |          
|                                 
|                                 
|                                 
|                                 
|Other                             |                               |      | 205,053 |           |  |      | 174,360 |           |  |   | 131,859 |          
|                                  |                               |      |         |           |  |      |         |           |  |   |         |          
|                                  | Total other operating expense |      | $       | 1,796,914 |  |      | $       | 1,508,245 |  |   | $       | 1,045,441 | 
|                                  |                               |      |         |           |  |      |         |           |  |   |         |          

NOTE S: INCOME TAXES

Reconciliation of Statutory Income Taxes

(dollars in thousands)

|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |         |         |         | 
|----------------------------------- | ------------------------------ | ------------------ | ------------------------------------- | ------- | ------- | ------- | --------- | ------- | ------- | ------- | --------- | ------- | ------- | ------- | 
|Year Ended December 31,             |                                | 2000               |                                       | 1999    |         | 1998   
|                                    |                                |                    |                                       |         |         |        
|Income before income taxes          |                                | $                  | 2,120,407                             |         |         | $       | 1,654,964 |         |         | $       | 1,254,065 |        
|                                   
|                                   
|                                   
|                                   
|Statutory tax rate                  |                                |                    | 35                                    | %       |         |         | 35        | %       |         |         | 35        | %      
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|Income tax at statutory tax rate    |                                |                    | 742,142                               |         |         |         | 579,237   |         |         |         | 438,923   |        
|                                   
|                                   
|                                   
|                                   
|State taxes, net of federal benefit |                                |                    | 19,569                                |         |         |         | 20,449    |         |         |         | 17,800    |        
|                                   
|                                   
|                                   
|                                   
|Other                               |                                |                    | 46,164                                |         |         |         | 30,855    |         |         |         | 21,076    |        
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|                                    |                                | Total income taxes |                                       | $       | 807,875 |         |           | $       | 630,541 |         |           | $       | 477,799 |        
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|Current income taxes:              
|                                   
|                                   
|                                   
|                                   
|                                    | U.S. federal                   |                    | $                                     | 668,974 |         |         | $         | 572,571 |         |         | $         | 410,532 |        
|                                   
|                                   
|                                   
|                                   
|                                    | U.S. state and local           |                    |                                       | 30,106  |         |         |           | 31,459  |         |         |           | 27,384  |        
|                                   
|                                   
|                                   
|                                   
|                                    | Foreign                        |                    |                                       | 63,988  |         |         |           | 73,115  |         |         |           | 33,194  |        
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|                                    |                                |                    | Total current income taxes            |         |         | 763,068 |           |         |         | 677,145 |           |         |         | 471,110 | 
|                                   
|                                   
|                                   
|                                   
|Deferred income taxes (benefit):   
|                                   
|                                   
|                                   
|                                   
|                                    | U.S. federal, state, and local |                    |                                       | 47,326  |         |         |           | (48,700 | )       |         |           | 409     |        
|                                   
|                                   
|                                   
|                                   
|                                    | Foreign                        |                    |                                       | (2,519  | )       |         |           | 2,096   |         |         |           | 6,280   |        
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|                                    |                                |                    | Total deferred income taxes (benefit) |         |         | 44,807  |           |         |         | (46,604 | )         |         |         | 6,689   | 
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        
|                                    |                                |                    | Total income taxes                    |         | $       | 807,875 |           |         | $       | 630,541 |           |         | $       | 477,799 | 
|                                    |                                |                    |                                       |         |         |         |           |         |         |         |           |        

Foreign subsidiaries contributed approximately 9.6% in 2000, 12.9% in 1999, and
7.1% in 1998 to consolidated income before income taxes. These amounts do not
include allocations for certain income and expense items recorded in domestic
subsidiaries related to foreign activities.

No U.S. income taxes have been provided on the accumulated undistributed
earnings of foreign subsidiaries, totaling $339.8 million at December 31, 2000,
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.

Summary of Deferred Taxes

(dollars in thousands)

|                                          |                                                    |      |          |          |   |   |          |          |  
|----------------------------------------- | -------------------------------------------------- | ---- | -------- | -------- | - | - | -------- | -------- | -
|December 31,                              |                                                    | 2000 |          | 1999    
|                                          |                                                    |      |          |         
|Deferred tax assets:                     
|                                         
|                                         
|                                         
|                                         
|Reserve for possible credit losses        |                                                    | $    |         |          |   | $ | 67,960   |         
|                                         
|                                         
|                                         
|                                         
|Intangible assets and other similar items |                                                    |      | 87,615   |          |   |   | 68,077   |         
|                                         
|                                         
|                                         
|                                         
|Other deferred tax assets                 |                                                    |      | 269,831  |          |   |   | 193,174  |         
|                                          |                                                    |      |          |          |   |   |          |         
|                                          | Total deferred tax assets                          |      |          | 357,446  |   |   |          | 329,211  |  
|                                         
|                                         
|                                         
|                                         
|Valuation allowance                       |                                                    |      |         |          |   |   |         |         
|                                          |                                                    |      |          |          |   |   |          |         
|                                          | Total deferred tax assets less valuation
allowance |      |          | 357,446  |   |   |          | 329,211  |  
|                                         
|                                         
|                                         
|                                         
|Deferred tax liabilities:                
|                                         
|                                         
|                                         
|                                         
|Reserve for possible credit losses        |                                                    |      | (46,693  | )        |   |   |         |         
|                                         
|                                         
|                                         
|                                         
|Securitizations and related items         |                                                    |      | (185,696 | )        |   |   | (166,346 | )       
|                                         
|                                         
|                                         
|                                         
|Other deferred tax liabilities            |                                                    |      | (78,315  | )        |   |   | (61,259  | )       
|                                          |                                                    |      |          |          |   |   |          |         
|                                          | Total deferred tax liabilities                     |      |          | (310,704 | ) |   |          | (227,605 | )
|                                          |                                                    |      |          |          |   |   |          |         
|                                          | Net deferred tax assets                            |      | $        | 46,742   |   |   | $        | 101,606  |  
|                                          |                                                    |      |          |          |   |   |          |         

72



---



MBNA CORPORATION AND SUBSIDIARIES



---

NOTE T: COMMITMENTS AND CONTINGENCIES

At December 31, 2000, the Corporation had outstanding lines of credit of $520.7
billion committed to its Customers. Of that total commitment, $431.9 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 four-year revolving
credit facility 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 four-year $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 credit card receivables 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, 2000.

The Corporation had two one-year revolving credit facilities totaling $75.0
million at December 31, 1999. As a result of participating in the senior
syndicated revolving credit facility, the Corporation did not renew these
credit facilities during 2000.

In addition, MBNA Europe arranged a £325.0 million (approximately
$484.7 million at December 31, 2000) 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 replaced MBNA Europes prior £300.0 million
multi-currency revolving credit facility. 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, 2000.

MBNA Canada has a CAD$300.0 million (approximately $200.3 million at December
31, 2000) multi-currency syndicated revolving credit facility committed through
December 2001 and a CAD$50.0 million (approximately $33.4 million at December
31, 2000) credit facility committed through March 2001. 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, 2000.

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 also has a
foreign branch office in the Grand Cayman Islands, which invests in
interest-earning time deposits and accepts eurodollar deposits. This branch
also participates in the loan receivables securitized by MBNA Europe.

Foreign Loan Receivables Distribution

(dollars in thousands)

|                                              |                |                                     |           |           |           |   |         |         |           | 
|--------------------------------------------- | -------------- | ----------------------------------- | --------- | --------- | --------- | - | ------- | ------- | --------- | 
|December 31,                                  |                | 2000                                |           | 1999     
|                                              |                |                                     |           |          
|Loans Held for Securitization    
Credit card |                | $                                   | 852,525   |           |           | $ | 855,916 |        
|                                              |                |                                     |           |           |           |   |         |        
|                                              |                | Total loans held for securitization |           |           | 852,525   |   |         |         | 855,916   | 
|                                             
|                                             
|                                             
|                                             
|Loan Portfolio    
Credit card                |                |                                     | 1,185,859 |           |           |   | 944,183 |        
|                                             
|                                             
|                                             
|                                             
|                                              | Other consumer |                                     |           | 1,084,843 |           |   |         | 642,510 |          
|                                              |                |                                     |           |           |           |   |         |        
|                                              |                | Total loan portfolio                |           |           | 2,270,702 |   |         |         | 1,586,693 | 
|                                              |                |                                     |           |           |           |   |         |        
|                                              |                | Total loan receivables              |           | $         | 3,123,227 |   |         | $       | 2,442,609 | 
|                                              |                |                                     |           |           |           |   |         |        

Because certain foreign operations are integrated with many of the Banks
domestic operations, estimates and assumptions have been made to assign
certain 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 Data

(dollars in thousands)

|                           |  |      |            |      |  |      |            |   |  |   |            |  
|-------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|December 31,               |  | 2000 |            | 1999 |  | 1998
|                           |  |      |            |      |  |     
|United Kingdom/Ireland    
|                          
|                          
|                          
|                          
|Total assets               |  | $    | 3,951,404  |      |  | $    | 3,104,940  |   |  | $ | 2,108,273  |  
|                          
|                          
|                          
|                          
|Total income               |  |      | 767,622    |      |  |      | 696,585    |   |  |   | 527,884    |  
|                          
|                          
|                          
|                          
|Income before income taxes |  |      | 164,912    |      |  |      | 213,137    |   |  |   | 104,708    |  
|                          
|                          
|                          
|                          
|Net income                 |  |      | 121,041    |      |  |      | 148,806    |   |  |   | 72,249     |  
|                          
|                          
|                          
|                          
|Other Foreign             
|                          
|                          
|                          
|                          
|Total assets               |  |      | 1,651,315  |      |  |      | 1,706,289  |   |  |   | 2,680,694  |  
|                          
|                          
|                          
|                          
|Total income               |  |      | 190,495    |      |  |      | 179,257    |   |  |   | 138,187    |  
|                          
|                          
|                          
|                          
|Loss before income taxes   |  |      | (17,914    | )    |  |      | (44,032    | ) |  |   | (50,977    | )
|                          
|                          
|                          
|                          
|Net loss                   |  |      | (14,960    | )    |  |      | (38,815    | ) |  |   | (44,875    | )
|                          
|                          
|                          
|                          
|Total Foreign             
|                          
|                          
|                          
|                          
|Total assets               |  |      | 5,602,719  |      |  |      | 4,811,229  |   |  |   | 4,788,967  |  
|                          
|                          
|                          
|                          
|Total income               |  |      | 958,117    |      |  |      | 875,842    |   |  |   | 666,071    |  
|                          
|                          
|                          
|                          
|Income before income taxes |  |      | 146,998    |      |  |      | 169,105    |   |  |   | 53,731     |  
|                          
|                          
|                          
|                          
|Net income                 |  |      | 106,081    |      |  |      | 109,991    |   |  |   | 27,374     |  
|                          
|                          
|                          
|                          
|Domestic                  
|                          
|                          
|                          
|                          
|Total assets               |  |      | 33,075,377 |      |  |      | 26,047,903 |   |  |   | 21,017,293 |  
|                          
|                          
|                          
|                          
|Total income               |  |      | 6,910,736  |      |  |      | 5,594,250  |   |  |   | 4,529,070  |  
|                          
|                          
|                          
|                          
|Income before income taxes |  |      | 1,973,409  |      |  |      | 1,485,859  |   |  |   | 1,200,334  |  
|                          
|                          
|                          
|                          
|Net income                 |  |      | 1,206,451  |      |  |      | 914,432    |   |  |   | 748,892    |  
|                          
|                          
|                          
|                          
|MBNA Corporation          
|                          
|                          
|                          
|                          
|Total assets               |  |      | 38,678,096 |      |  |      | 30,859,132 |   |  |   | 25,806,260 |  
|                          
|                          
|                          
|                          
|Total income               |  |      | 7,868,853  |      |  |      | 6,470,092  |   |  |   | 5,195,141  |  
|                          
|                          
|                          
|                          
|Income before income taxes |  |      | 2,120,407  |      |  |      | 1,654,964  |   |  |   | 1,254,065  |  
|                          
|                          
|                          
|                          
|Net income                 |  |      | 1,312,532  |      |  |      | 1,024,423  |   |  |   | 776,266    |  

73



---



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, interest paid to investors, credit losses, and
other trust expenses. The managed results also include the impact of Statement
No. 125.

Segment Reporting

(dollars in thousands)

|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|-------------------------------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|Year Ended December 31,                                        |  | 2000 |             | 1999 |  | 1998
|                                                               |  |      |             |      |  |     
|Managed Income Statements                                     
|                                                              
|                                                              
|                                                              
|                                                              
|Interest income                                                |  | $    | 11,268,251  |      |  | $    | 9,133,754   |   |  | $ | 7,856,703   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Interest expense                                               |  |      | 5,431,142   |      |  |      | 3,945,953   |   |  |   | 3,543,127   |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |      | 5,837,109   |      |  |      | 5,187,801   |   |  |   | 4,313,576   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Provision for possible credit losses                           |  |      | 3,367,586   |      |  |      | 2,804,410   |   |  |   | 2,303,166   |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |      | 2,469,523   |      |  |      | 2,383,391   |   |  |   | 2,010,410   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating income                                         |  |      | 3,298,586   |      |  |      | 2,349,281   |   |  |   | 1,650,859   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating expense                                        |  |      | 3,647,702   |      |  |      | 3,077,708   |   |  |   | 2,407,204   |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |      | 2,120,407   |      |  |      | 1,654,964   |   |  |   | 1,254,065   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Applicable income taxes                                        |  |      | 807,875     |      |  |      | 630,541     |   |  |   | 477,799     |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net income                                                     |  | $    | 1,312,532   |      |  | $    | 1,024,423   |   |  | $ | 776,266     |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Managed loans outstanding                                      |  | $    | 88,790,721  |      |  | $    | 72,255,513  |   |  | $ | 59,641,106  |  
|                                                              
|                                                              
|                                                              
|                                                              
|Securitization Adjustment                                     
|                                                              
|                                                              
|                                                              
|                                                              
|Interest income                                                |  | $    | (8,492,572  | )    |  | $    | (6,871,483  | ) |  | $ | (5,890,531  | )
|                                                              
|                                                              
|                                                              
|                                                              
|Interest expense                                               |  |      | (3,739,415  | )    |  |      | (2,617,447  | ) |  |   | (2,319,294  | )
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |      | (4,753,157  | )    |  |      | (4,254,036  | ) |  |   | (3,571,237  | )
|                                                              
|                                                              
|                                                              
|                                                              
|Provision for possible credit losses                           |  |      | (2,958,569  | )    |  |      | (2,395,496  | ) |  |   | (1,993,127  | )
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |      | (1,794,588  | )    |  |      | (1,858,540  | ) |  |   | (1,578,110  | )
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating income                                         |  |      | 1,794,588   |      |  |      | 1,858,540   |   |  |   | 1,578,110   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating expense                                        |  |      |            |      |  |      |            |   |  |   |            |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |      |            |      |  |      |            |   |  |   |            |  
|                                                              
|                                                              
|                                                              
|                                                              
|Applicable income taxes                                        |  |      |            |      |  |      |            |   |  |   |            |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net income                                                     |  | $    |            |      |  | $    |            |   |  | $ |            |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Securitized loans outstanding                                  |  | $    | (68,835,884 | )    |  | $    | (54,591,804 | ) |  | $ | (46,172,739 | )
|                                                              
|                                                              
|                                                              
|                                                              
|Consolidated Statements of Income                             
|                                                              
|                                                              
|                                                              
|                                                              
|Interest income                                                |  | $    | 2,775,679   |      |  | $    | 2,262,271   |   |  | $ | 1,966,172   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Interest expense                                               |  |      | 1,691,727   |      |  |      | 1,328,506   |   |  |   | 1,223,833   |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income                                            |  |      | 1,083,952   |      |  |      | 933,765     |   |  |   | 742,339     |  
|                                                              
|                                                              
|                                                              
|                                                              
|Provision for possible credit losses                           |  |      | 409,017     |      |  |      | 408,914     |   |  |   | 310,039     |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net interest income after provision for possible credit losses |  |      | 674,935     |      |  |      | 524,851     |   |  |   | 432,300     |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating income                                         |  |      | 5,093,174   |      |  |      | 4,207,821   |   |  |   | 3,228,969   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Other operating expense                                        |  |      | 3,647,702   |      |  |      | 3,077,708   |   |  |   | 2,407,204   |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Income before income taxes                                     |  |      | 2,120,407   |      |  |      | 1,654,964   |   |  |   | 1,254,065   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Applicable income taxes                                        |  |      | 807,875     |      |  |      | 630,541     |   |  |   | 477,799     |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Net income                                                     |  | $    | 1,312,532   |      |  | $    | 1,024,423   |   |  | $ | 776,266     |  
|                                                               |  |      |             |      |  |      |             |   |  |   |             |  
|Loan receivables outstanding                                   |  | $    | 19,954,837  |      |  | $    | 17,663,709  |   |  | $ | 13,468,367  |  

74



---



MBNA CORPORATION AND SUBSIDIARIES



---

NOTE W: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following presents the fair value of financial instruments as of December
31, 2000 and 1999, 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:Cash and due from banks are carried at an amount that
approximates fair value.

Money market instruments: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 value.

Investment securities:Fair value 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.

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

Loan portfolio: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: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, 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.

Accounts receivable from securitizations:The fair value of accounts receivable
from securitizations is determined by discounting the future cash flows from
the securitizations using rates currently
available to the Corporation for instruments with similar terms
and remaining maturities.

FINANCIAL LIABILITIES

Total deposits:The fair value of money market deposit accounts,
noninterest-bearing demand 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:Short-term borrowings include federal funds purchased
and securities sold under repurchase agreements, short-term deposit notes, 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.

Long-term debt and bank notes:The fair value of primarily 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

Carrying Values and Estimated Fair Values of the Corporations Financial Assets

(dollars in thousands)

|                                                          |                    |      |            |           |            |   |            |           |            |   |           |           |  |   |           |           | 
|--------------------------------------------------------- | ------------------ | ---- | ---------- | --------- | ---------- | - | ---------- | --------- | ---------- | - | --------- | --------- |  | - | --------- | --------- | 
|December 31,                                              |                    | 2000 |            | 1999     
|                                                          |                    |      |            |          
|                                                          |                    |      | Carrying   |           | Estimated  |   | Carrying   |           | Estimated 
|                                                          |                    |      | Value      |           | Fair Value |   | Value      |           | Fair Value
|                                                          |                    |      |            |           |            |   |            |           |           
|Financial Assets
Cash and due from banks                  |                    | $    | 971,469    |           |            | $ | 971,469    |           |            | $ | 488,386   |           |  | $ | 488,386   |          
|                                                         
|                                                         
|                                                         
|                                                         
|Money market instruments                                  |                    |      | 2,205,331  |           |            |   | 2,205,331  |           |            |   | 1,525,748 |           |  |   | 1,525,748 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Investment securities:                                   
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Available-for-sale |      |            | 2,666,196 |            |   |            | 2,666,196 |            |   |           | 2,752,663 |  |   |           | 2,752,663 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Held-to-maturity   |      |            | 384,088   |            |   |            | 368,547   |            |   |           | 293,641   |  |   |           | 264,832   | 
|                                                         
|                                                         
|                                                         
|                                                         
|Loans held for securitization                             |                    |      | 8,271,933  |           |            |   | 8,271,933  |           |            |   | 9,692,616 |           |  |   | 9,692,616 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Loan portfolio, net of reserve for possible credit losses |                    |      | 11,296,336 |           |            |   | 11,296,336 |           |            |   | 7,615,134 |           |  |   | 7,615,134 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Accrued income receivable                                 |                    |      | 305,437    |           |            |   | 305,437    |           |            |   | 216,867   |           |  |   | 216,867   |          
|                                                         
|                                                         
|                                                         
|                                                         
|Accounts receivable from securitizations                  |                    |      | 6,940,567  |           |            |   | 6,924,000  |           |            |   | 4,128,046 |           |  |   | 4,122,000 |          

75



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---

Carrying Values and Estimated Fair Values of the Corporations Financial Liabilities

(dollars in thousands)

|                                     |  |          |            |            |  |          |            |            |  |   |            |  |  |   |            | 
|------------------------------------ |  | -------- | ---------- | ---------- |  | -------- | ---------- | ---------- |  | - | ---------- |  |  | - | ---------- | 
|December 31,                         |  | 2000     |            | 1999      
|                                     |  |          |            |           
|                                     |  | Carrying |            | Estimated  |  | Carrying |            | Estimated 
|                                     |  | Value    |            | Fair Value |  | Value    |            | Fair Value
|                                     |  |          |            |            |  |          |            |           
|Financial Liabilities
Total deposits |  | $        | 24,343,595 |            |  | $        | 24,788,000 |            |  | $ | 18,714,753 |  |  | $ | 18,670,000 | 
|                                    
|                                    
|                                    
|                                    
|Short-term borrowings                |  |          | 159,512    |            |  |          | 159,512    |            |  |   | 1,039,004  |  |  |   | 1,039,004  | 
|                                    
|                                    
|                                    
|                                    
|Long-term debt and bank notes        |  |          | 5,735,635  |            |  |          | 5,792,000  |            |  |   | 5,708,880  |  |  |   | 5,663,000  | 
|                                    
|                                    
|                                    
|                                    
|Accrued interest payable             |  |          | 237,610    |            |  |          | 237,610    |            |  |   | 182,990    |  |  |   | 182,990    | 

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

NOTE X: OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS

The Corporation uses interest rate swap agreements to change fixed-rate funding
sources to floating-rate funding sources to better match the rate sensitivity
of the Corporations assets. The Corporation uses forward exchange contracts to
reduce its exposure to foreign currency exchange rate risk related to activity
associated with the Corporations foreign bank subsidiaries.

The Corporation enters into 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 fair value of the Corporations off-balance-sheet 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.

At December 31, 2000 and 1999, the Corporation had interest rate swap
agreements with underlying notional amounts of $1.8 billion and $1.0 billion,
respectively. These agreements had a net unrealized gain of approximately $44.3
million at December 31, 2000 and a net unrealized loss of $31.0 million at
December 31, 1999.

The notional amounts underlying the Corporations forward exchange contracts at
December 31, 2000 and 1999, were $1.3 billion and $1.0 billion, respectively.
These contracts had a net unrealized loss of $36.7 million at December 31, 2000
and a net unrealized gain of $7.8 million at December 31, 1999.

The notional amounts underlying the Corporations foreign exchange swap
agreements were $451.5 million at December 31, 2000, and $200.7 million at
December 31, 1999. These contracts had net unrealized losses of $5.3 million
and $4.6 million at December 31, 2000 and 1999, respectively.

Summary of Activity of Off-Balance-Sheet Financial Instruments (Notional Amounts)

(dollars in thousands)

|                           |  |   |                 |                  |                  |   |                 |   |       |   |         |   |  |   |            |   | 
|-------------------------- |  | - | --------------- | ---------------- | ---------------- | - | --------------- | - | ----- | - | ------- | - |  | - | ---------- | - | 
|                           |  |   | Interest Rate   | Forward Exchange | Foreign Exchange
|                           |  |   | Swap Agreements |                  | Contracts        |   | Swap Agreements |   | Total
|                           |  |   |                 |                  |                  |   |                 |   |      
|Balance, December 31, 1997 |  | $ | 350,000         |                  |                  | $ | 512,125         |   |       | $ | 40,000  |   |  | $ | 902,125    |  
|                          
|                          
|                          
|                          
|Additions                  |  |   | 305,000         |                  |                  |   | 3,939,639       |   |       |   |        |   |  |   | 4,244,639  |  
|                          
|                          
|                          
|                          
|Maturities                 |  |   |                |                  |                  |   | (3,594,633      | ) |       |   |        |   |  |   | (3,594,633 | )
|                           |  |   |                 |                  |                  |   |                 |   |       |   |         |   |  |   |            |   | 
|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  |  
|                           |  |   |                 |                  |                  |   |                 |   |       |   |         |   |  |   |            |   | 

76



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---

Significant Classes of Off-Balance-Sheet Financial Instruments

(dollars in thousands)

|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |         |         |  
|------------------------------------------ | ----------------------- | ----- | --------- | -------- |  | -------- | ---- | ---------------- |  | -------- | ---- | ---------- |  |  | ---- |  |  |  | - | ------- | ------- | -
|                                           |                         |       |           |          |  |          |      | Weighted Average
|                                           |                         |       |           |          |  |          |      |                 
|                                           |                         |       |           | Notional |  | Receive  |      | Pay              |  | Maturity |      | Estimated 
|                                           |                         |       |           | Amount   |  | Rate (a) |      | Rate (b)         |  | in Years |      | Fair Value
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |           
|December 31, 2000                         
|                                          
|                                          
|                                          
|                                          
|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   |          |  |          | 1.49 |                  |  |          | 1.49 |            |  |  | 2.0  | 
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized gains  |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  | $ | 1,913   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized losses |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | (7,223  | )      
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|                                           |                         | Total |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | $       | (5,310  | )
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|December 31, 1999                         
|                                          
|                                          
|                                          
|                                          
|Interest rate swap agreements              |                         |       | 1,041,303 |          |  |          | 6.84 | %                |  |          | 6.30 | %          |  |  | 11.2 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized gains  |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  | $ |        |        
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized losses |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | (31,042 | )      
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|                                           |                         | Total |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | $       | (31,042 | )
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|Forward exchange contractspounds sterling |                         |       | 1,027,744 |          |  |          | 1.62 |                  |  |          | 1.62 |            |  |  | .2   | 
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized gains  |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  | $ | 10,480  |        
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized losses |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | (3,335  | )      
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|                                           |                         | Total |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | $       | 7,145   |  
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|Forward exchange contractsIrish punts     |                         |       | 12,977    |          |  |          | 1.35 |                  |  |          | 1.28 |            |  |  | .1   | 
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized gains  |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  | $ | 696     |        
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized losses |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        |        
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|                                           |                         | Total |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | $       | 696     |  
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|Foreign exchange swap agreements           |                         |       | 200,675   |          |  |          | 1.62 |                  |  |          | 1.62 |            |  |  | 3.6  | 
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized gains  |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  | $ | 392     |        
|                                          
|                                          
|                                          
|                                          
|                                           | Gross unrealized losses |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | (5,040  | )      
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        
|                                           |                         | Total |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   | $       | (4,648  | )
|                                           |                         |       |           |          |  |          |      |                  |  |          |      |            |  |  |      |  |  |  |   |        



---

|(a) |  | Weighted average receive rate represents the fixed-rate contracted at the
time the off-balance-sheet 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, 2000 and 1999, respectively. The weighted average pay rate for the
interest rate swap agreements is generally based upon the three-month LIBOR and
was the rate in effect at December 31, 2000 and 1999, respectively.

Although off-balance-sheet financial instruments do not expose the Corporation
to credit risk equal to the notional amount, 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. The Corporation
enters into off-balance-sheet financial instruments with counterparties who
have credit ratings of investment grade as rated by the major rating agencies.

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, 2000 and 1999.

77



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MBNA CORPORATION AND SUBSIDIARIES



---

At December 31, 2000, the Corporation had interest rate swap agreements
maturing in varying amounts from 2002 through 2027.

The Corporations forward exchange contracts all mature in 2001 and the
foreign exchange swap agreements mature either in 2002 or 2003.

Expected Maturities of Off-Balance-Sheet Financial Instruments

(dollars in thousands)

|                                 |                      |               |   |           |   |            |   |               |   |       |   |         |  |  |   |         |  |  |   |           |  
|-------------------------------- | -------------------- | ------------- | - | --------- | - | ---------- | - | ------------- | - | ----- | - | ------- |  |  | - | ------- |  |  | - | --------- | -
|December 31, 2000                |                      | Within 1 Year |   | 1-5 Years |   | 6-10 Years |   | Over 10 Years |   | Total
|                                 |                      |               |   |           |   |            |   |               |   |      
|Interest Rate Swap Agreements   
|                                
|                                
|                                
|                                
|                                 | Notional amount      |               | $ |          |   |            | $ | 1,218,523     |   |       | $ | 250,000 |  |  | $ | 286,303 |  |  | $ | 1,754,826 |  
|                                
|                                
|                                
|                                
|                                 | Estimated fair value |               |   |          |   |            |   | 30,511        |   |       |   | 996     |  |  |   | 12,807  |  |  |   | 44,314    |  
|                                
|                                
|                                
|                                
|Forward Exchange Contracts      
|                                
|                                
|                                
|                                
|                                 | Notional amount      |               |   | 1,321,184 |   |            |   |              |   |       |   |        |  |  |   |        |  |  |   | 1,321,184 |  
|                                
|                                
|                                
|                                
|                                 | Estimated fair value |               |   | (36,728   | ) |            |   |              |   |       |   |        |  |  |   |        |  |  |   | (36,728   | )
|                                
|                                
|                                
|                                
|Foreign Exchange Swap Agreements
|                                
|                                
|                                
|                                
|                                 | Notional amount      |               |   |          |   |            |   | 451,458       |   |       |   |        |  |  |   |        |  |  |   | 451,458   |  
|                                
|                                
|                                
|                                
|                                 | Estimated fair value |               |   |          |   |            |   | (5,310        | ) |       |   |        |  |  |   |        |  |  |   | (5,310    | )

NOTE Y: 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 conducts its credit card operations primarily
through the Bank which constituted 92.3% and 94.0% of the consolidated assets
of the Corporation
at December 31, 2000 and 1999, respectively.

Condensed Statements of Financial Condition

(dollars in thousands)

|                                                                                |          |                                            |           |           |           |   |           |           |           | 
|------------------------------------------------------------------------------- | -------- | ------------------------------------------ | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|December 31,                                                                    |          | 2000                                       |           | 1999     
|                                                                                |          |                                            |           |          
|Assets                                                                         
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Cash and due from banks                                                         |          | $                                          | 5,569     |           |           | $ | 5,337     |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Interest-earning time deposits due from bank subsidiary                         |          |                                            | 816,296   |           |           |   | 735,396   |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Notes receivable from non-bank subsidiaries                                     |          |                                            | 1,310,219 |           |           |   | 1,386,424 |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Investment in subsidiaries:                                                    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Bank     |                                            |           | 5,884,652 |           |   |           | 3,825,972 |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Non-bank |                                            |           | 192,848   |           |   |           | 239,011   |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Premises and equipment, net                                                     |          |                                            | 128,558   |           |           |   | 87,340    |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Accrued income receivable                                                       |          |                                            | 18,062    |           |           |   | 17,649    |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Other assets                                                                    |          |                                            | 174,550   |           |           |   | 132,772   |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total assets                               |           | $         | 8,530,754 |   |           | $         | 6,429,901 | 
|                                                                                |          |                                            |           |           |           |   |           |          
|Liabilities and Stockholders Equity                                           
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Long-term debt                                                                  |          | $                                          | 1,103,107 |           |           | $ | 1,468,929 |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Junior subordinated deferrable interest debentures
due to non-bank subsidiaries |          |                                            | 580,817   |           |           |   | 580,725   |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Accrued interest payable                                                        |          |                                            | 16,839    |           |           |   | 21,745    |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Dividends payable                                                               |          |                                            | 71,203    |           |           |   | 59,205    |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Accrued expenses and other liabilities                                          |          |                                            | 131,510   |           |           |   | 99,854    |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total liabilities                          |           |           | 1,903,476 |   |           |           | 2,230,458 | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Stockholders equity                                                            |          |                                            | 6,627,278 |           |           |   | 4,199,443 |          
|                                                                                |          |                                            |           |           |           |   |           |          
|                                                                                |          | Total liabilities and stockholders equity |           | $         | 8,530,754 |   |           | $         | 6,429,901 | 
|                                                                                |          |                                            |           |           |           |   |           |          

78



---



MBNA CORPORATION AND SUBSIDIARIES



---

Condensed Statements of Income

(dollars in thousands)

|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |         |         | 
|---------------------------------------------------------------------------------------- | -------- | ----------------------- | --------- | --------- | ------- | ---- | --------- | ------- | ------- | - | ------- | ------- | ------- | 
|Year Ended December 31,                                                                  |          | 2000                    |           | 1999      |         | 1998
|                                                                                         |          |                         |           |           |         |     
|Operating Income                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Interest income                                                                          |          | $                       | 151,450   |           |         | $    | 166,782   |         |         | $ | 134,751 |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Dividends from subsidiaries:                                                            
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                         | Bank     |                         |           | 296,681   |         |      |           | 240,000 |         |   |         | 194,000 |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                         | Non-bank |                         |           | 1,452     |         |      |           | 1,270   |         |   |         | 1,298   |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Management fees from subsidiaries                                                        |          |                         | 70,245    |           |         |      | 38,206    |         |         |   | 32,993  |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Other                                                                                    |          |                         | 3,128     |           |         |      | 44        |         |         |   | 43      |        
|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |        
|                                                                                         |          | Total operating income  |           |           | 522,956 |      |           |         | 446,302 |   |         |         | 363,085 | 
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Operating Expense                                                                       
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Interest expense                                                                         |          |                         | 133,600   |           |         |      | 160,229   |         |         |   | 167,241 |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Salaries and employee benefits                                                           |          |                         | 33,813    |           |         |      | 24,083    |         |         |   | 18,073  |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Other                                                                                    |          |                         | 32,019    |           |         |      | 12,553    |         |         |   | 13,245  |        
|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |        
|                                                                                         |          | Total operating expense |           |           | 199,432 |      |           |         | 196,865 |   |         |         | 198,559 | 
|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |        
|Income before income taxes and
equity in undistributed net income (loss) of subsidiaries |          |                         | 323,524   |           |         |      | 249,437   |         |         |   | 164,526 |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Applicable income taxes (benefit)                                                        |          |                         | 16,380    |           |         |      | 1,575     |         |         |   | (10,466 | )      
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Equity in undistributed net income (loss) of subsidiaries:                              
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                         | Bank     |                         |           | 1,002,055 |         |      |           | 784,731 |         |   |         | 606,872 |        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                         | Non-bank |                         |           | 3,333     |         |      |           | (8,170  | )       |   |         | (5,598  | )      
|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |        
|Net Income                                                                               |          | $                       | 1,312,532 |           |         | $    | 1,024,423 |         |         | $ | 776,266 |        
|                                                                                         |          |                         |           |           |         |      |           |         |         |   |         |        

Condensed Statements of Cash Flows

(dollars in thousands)

|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |          |          |  
|--------------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------- | --------- | ---------- | ---------- | ---- | --------- | -------- | -------- | - | -------- | -------- | -------- | -
|Year Ended December 31,                                                           |                                                  | 2000                                      |           | 1999       |            | 1998
|                                                                                  |                                                  |                                           |           |            |            |     
|Operating Activities                                                             
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net income                                                                        |                                                  | $                                         | 1,312,532 |            |            | $    | 1,024,423 |          |          | $ | 776,266  |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Adjustments to reconcile net income to net cash
provided by operating activities:
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Equity in undistributed earnings of subsidiaries |                                           |           | (1,005,388 | )          |      |           | (776,561 | )        |   |          | (601,274 | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | (Benefit) provision for deferred income taxes    |                                           |           | (4,374     | )          |      |           | (4,644   | )        |   |          | 610      |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Depreciation and amortization                    |                                           |           | 32,296     |            |      |           | 19,481   |          |   |          | 12,924   |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Decrease in other operating activities           |                                           |           | 26,282     |            |      |           | 39,981   |          |   |          | 38,824   |         
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|                                                                                  |                                                  | Net cash provided by operating activities |           |            | 361,348    |      |           |          | 302,680  |   |          |          | 227,350  |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Investing Activities                                                             
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net increase in interest-earning time deposits
due from bank subsidiary           |                                                  |                                           | (80,900   | )          |            |      | (568,183  | )        |          |   | (8,800   | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net (issuance) maturity of notes receivable from non-bank
subsidiaries            |                                                  |                                           | (169,219  | )          |            |      | 446,960   |          |          |   | (155,211 | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net (purchases) sales of premises and equipment                                   |                                                  |                                           | (49,213   | )          |            |      | (33,626   | )        |          |   | 5,741    |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net investment in subsidiaries                                                    |                                                  |                                           | (765,999  | )          |            |      | (321,370  | )        |          |   | (87,339  | )       
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|                                                                                  |                                                  | Net cash used in investing activities     |           |            | (1,065,331 | )    |           |          | (476,219 | ) |          |          | (245,609 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Financing Activities                                                             
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from issuance of long-term debt                                          |                                                  |                                           |          |            |            |      |          |          |          |   | 493,918  |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Maturity of long-term debt                                                        |                                                  |                                           | (367,000  | )          |            |      | (591,000  | )        |          |   | (80,000  | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from issuance of common stock                                            |                                                  |                                           | 1,599,055 |            |            |      | 1,174,086 |          |          |   |         |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from exercise of stock options and other awards                          |                                                  |                                           | 62,874    |            |            |      | 27,932    |          |          |   | 42,454   |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Acquisition and retirement of common stock                                        |                                                  |                                           | (323,464  | )          |            |      | (211,337  | )        |          |   | (247,260 | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Dividends paid                                                                    |                                                  |                                           | (267,250  | )          |            |      | (227,733  | )        |          |   | (189,916 | )       
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|                                                                                  |                                                  | Net cash provided by financing activities |           |            | 704,215    |      |           |          | 171,948  |   |          |          | 19,196   |  
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|Increase (Decrease) in Cash and Cash Equivalents                                  |                                                  |                                           | 232       |            |            |      | (1,591    | )        |          |   | 937      |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash and cash equivalents at beginning of year                                    |                                                  |                                           | 5,337     |            |            |      | 6,928     |          |          |   | 5,991    |         
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|Cash and cash equivalents at end of year                                          |                                                  | $                                         | 5,569     |            |            | $    | 5,337     |          |          | $ | 6,928    |         
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|Supplemental Disclosures                                                         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest expense paid                                                             |                                                  | $                                         | 137,141   |            |            | $    | 163,785   |          |          | $ | 161,102  |         
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         
|Income taxes paid                                                                 |                                                  | $                                         |          |            |            | $    |          |          |          | $ |         |         
|                                                                                  |                                                  |                                           |           |            |            |      |           |          |          |   |          |         

79



---



MBNA CORPORATION AND SUBSIDIARIES



QUARTERLY DATA

---

(dollars in thousands, except per share amounts)

|                                                                              |  |           |           |          |  |               |           |              |  |   |           |  |  |   |           | 
|----------------------------------------------------------------------------- |  | --------- | --------- | -------- |  | ------------- | --------- | ------------ |  | - | --------- |  |  | - | --------- | 
|Three Months Ended                                                            |  | March 31, |           | June 30, |  | September 30, |           | December 31,
|                                                                              |  |           |           |          |  |               |           |             
|2000                                                                         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Interest income                                                               |  | $         | 666,686   |          |  | $             | 667,905   |              |  | $ | 708,979   |  |  | $ | 732,109   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Interest expense                                                              |  |           | 383,615   |          |  |               | 399,592   |              |  |   | 433,945   |  |  |   | 474,575   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net interest income                                                           |  |           | 283,071   |          |  |               | 268,313   |              |  |   | 275,034   |  |  |   | 257,534   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Provision for possible credit losses                                          |  |           | 99,846    |          |  |               | 89,301    |              |  |   | 113,283   |  |  |   | 106,587   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Other operating income                                                        |  |           | 1,111,036 |          |  |               | 1,193,371 |              |  |   | 1,326,150 |  |  |   | 1,462,617 | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|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   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|1999                                                                         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Interest income                                                               |  | $         | 541,348   |          |  | $             | 586,824   |              |  | $ | 544,822   |  |  | $ | 589,277   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Interest expense                                                              |  |           | 314,567   |          |  |               | 319,763   |              |  |   | 335,801   |  |  |   | 358,375   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net interest income                                                           |  |           | 226,781   |          |  |               | 267,061   |              |  |   | 209,021   |  |  |   | 230,902   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Provision for possible credit losses                                          |  |           | 84,464    |          |  |               | 129,756   |              |  |   | 105,020   |  |  |   | 89,674    | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Other operating income                                                        |  |           | 903,730   |          |  |               | 1,028,532 |              |  |   | 1,118,307 |  |  |   | 1,157,252 | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Other operating expense                                                       |  |           | 745,573   |          |  |               | 798,823   |              |  |   | 751,413   |  |  |   | 781,899   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Income before income taxes                                                    |  |           | 300,474   |          |  |               | 367,014   |              |  |   | 470,895   |  |  |   | 516,581   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |  |           | 185,993   |          |  |               | 227,182   |              |  |   | 291,484   |  |  |   | 319,764   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income applicable to common stock                                         |  |           | 182,477   |          |  |               | 223,655   |              |  |   | 287,859   |  |  |   | 316,119   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Earnings per common share                                                     |  |           | .23       |          |  |               | .28       |              |  |   | .36       |  |  |   | .39       | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Earnings per common shareassuming dilution                                   |  |           | .22       |          |  |               | .27       |              |  |   | .34       |  |  |   | .38       | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Weighted average common shares outstanding (000)                              |  |           | 798,538   |          |  |               | 801,803   |              |  |   | 801,890   |  |  |   | 801,804   | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Weighted average common shares outstanding and common
stock equivalents (000) |  |           | 834,887   |          |  |               | 838,771   |              |  |   | 838,608   |  |  |   | 836,038   | 

80



---



MBNA CORPORATION AND SUBSIDIARIES



PREFERRED STOCK PRICE RANGE AND DIVIDENDS

---

|         |                |  |      |            |     |  |       |            |                 |  |   |            |  |  |              |        | 
|-------- | -------------- |  | ---- | ---------- | --- |  | ----- | ---------- | --------------- |  | - | ---------- |  |  | ------------ | ------ | 
|         |                |  |      |            |     |  |       |            |                 |  |   |            |  |  | Dividends   
|         |                |  |      |            |     |  |       |            |                 |  |   |            |  |  | Declared per
|         |                |  | High |            | Low |  | Close |            | Preferred Share
|         |                |  |      |            |     |  |       |            |                
|Series A
|        
|        
|        
|        
|         | 2000          
|        
|        
|        
|        
|         | Fourth quarter |  | $    | 24     1/2 |     |  | $     | 23     1/2 |                 |  | $ | 23     1/2 |  |  | $            | .46875
|        
|        
|        
|        
|         | Third quarter  |  |      | 24     3/4 |     |  |       | 23     3/8 |                 |  |   | 24     3/8 |  |  |              | .46875
|        
|        
|        
|        
|         | Second quarter |  |      | 24     3/4 |     |  |       | 23     1/4 |                 |  |   | 24     3/4 |  |  |              | .46875
|        
|        
|        
|        
|         | First quarter  |  |      | 25         |     |  |       | 23     1/4 |                 |  |   | 24     3/4 |  |  |              | .46875
|        
|        
|        
|        
|         | 1999          
|        
|        
|        
|        
|         | Fourth quarter |  |      | 25     1/2 |     |  |       | 22         |                 |  |   | 25         |  |  |              | .46875
|        
|        
|        
|        
|         | Third quarter  |  |      | 26     3/8 |     |  |       | 25         |                 |  |   | 25     1/8 |  |  |              | .46875
|        
|        
|        
|        
|         | Second quarter |  |      | 27     3/8 |     |  |       | 25 15/16   |                 |  |   | 25 15/16   |  |  |              | .46875
|        
|        
|        
|        
|         | First quarter  |  |      | 26     7/8 |     |  |       | 25   9/16  |                 |  |   | 26     1/8 |  |  |              | .46875
|        
|        
|        
|        
|Series B
|        
|        
|        
|        
|         | 2000          
|        
|        
|        
|        
|         | Fourth quarter |  |      | 22   9/16  |     |  |       | 22     1/4 |                 |  |   | 22   9/16  |  |  |              | .37020
|        
|        
|        
|        
|         | Third quarter  |  |      | 24         |     |  |       | 22     1/4 |                 |  |   | 22     1/4 |  |  |              | .37650
|        
|        
|        
|        
|         | Second quarter |  |      | 24 15/16   |     |  |       | 21   3/16  |                 |  |   | 24         |  |  |              | .37960
|        
|        
|        
|        
|         | First quarter  |  |      | 26         |     |  |       | 24     3/4 |                 |  |   | 24     3/4 |  |  |              | .39970
|        
|        
|        
|        
|         | 1999          
|        
|        
|        
|        
|         | Fourth quarter |  |      | 25     3/4 |     |  |       | 23   9/16  |                 |  |   | 24     1/2 |  |  |              | .37590
|        
|        
|        
|        
|         | Third quarter  |  |      | 25     1/4 |     |  |       | 24     7/8 |                 |  |   | 24     7/8 |  |  |              | .37560
|        
|        
|        
|        
|         | Second quarter |  |      | 25     5/8 |     |  |       | 25         |                 |  |   | 25   3/16  |  |  |              | .34680
|        
|        
|        
|        
|         | First quarter  |  |      | 25     5/8 |     |  |       | 24     3/4 |                 |  |   | 25         |  |  |              | .34380

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, 2001, 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 $.3527 per share on the Adjustable Rate
Cumulative Preferred Stock, Series B. Both dividends are payable April 16, 2001
to stockholders of record as of March 31, 2001.

81



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MBNA CORPORATION AND SUBSIDIARIES



---

|               |  |      |            |     |  |       |            |  |              |   |            |  |  |  |   | 
|-------------- |  | ---- | ---------- | --- |  | ----- | ---------- |  | ------------ | - | ---------- |  |  |  | - | 
|               |  |      |            |     |  |       |            |  | Dividends   
|               |  |      |            |     |  |       |            |  | Declared per
|               |  | High |            | Low |  | Close |            |  | Common Share
|               |  |      |            |     |  |       |            |  |             
|2000          
|              
|              
|              
|              
|Fourth quarter |  | $    | 39     3/8 |     |  | $     | 33         |  |              | $ | 36 15/16   |  |  |  | $ | 
|              
|              
|              
|              
|Third quarter  |  |      | 39 13/16   |     |  |       | 26     7/8 |  |              |   | 38     1/2 |  |  |  |   | 
|              
|              
|              
|              
|Second quarter |  |      | 29     5/8 |     |  |       | 22         |  |              |   | 27     1/8 |  |  |  |   | 
|              
|              
|              
|              
|First quarter  |  |      | 27   9/16  |     |  |       | 20         |  |              |   | 25     1/2 |  |  |  |   | 
|              
|              
|              
|              
|1999          
|              
|              
|              
|              
|Fourth quarter |  |      | 29     1/8 |     |  |       | 20 15/16   |  |              |   | 27     1/4 |  |  |  |   | 
|              
|              
|              
|              
|Third quarter  |  |      | 32     1/2 |     |  |       | 22 13/16   |  |              |   | 22 13/16   |  |  |  |   | 
|              
|              
|              
|              
|Second quarter |  |      | 30     3/4 |     |  |       | 22     1/2 |  |              |   | 30     5/8 |  |  |  |   | 
|              
|              
|              
|              
|First quarter  |  |      | 27 15/16   |     |  |       | 22   3/16  |  |              |   | 23     7/8 |  |  |  |   | 

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, 2001,
the Corporation had 2,770 common stockholders of record. This does not include
beneficial owners for whom Cede & Co. or others act as nominees.

On January 10, 2001, the Corporations Board of Directors declared a quarterly
dividend of $.09 per common share, payable April 1, 2001 to stockholders of
record as of March 15, 2001.

82



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MBNA CORPORATION

Board Directors

---

|                                                                                                                    |  |                                                                                                                                                          |  |                                                                                                                                                                               
|------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Alfred Lerner*
Chairman and
Chief Executive Officer
MBNA Corporation                                                |  | Benjamin R. Civiletti, Esq.*
Chairman
Venable, Baetjer and Howard, LLP
Former Attorney General
of the United States                                      |  | Randolph D. Lerner, Esq.
Partner
Securities Advisors, L.P.                                                                                                                    
|                                                                                                                   
|Charles M. Cawley*
President
MBNA Corporation
Chief Executive Officer
MBNA America Bank, N.A                        |  | Bernadine P. Healy, M.D.
(Nominated for election)
President and Chief Executive Officer
American Red Cross
Former Director
National Institutes of Health |  | Stuart L. Markowitz, M.D.
Internist and Managing Partner
Drs. Markowitz, Rosenberg,
Stein & Associates
Clinical Professor
Case Western Reserve University,
College of Medicine
|                                                                                                                   
|James H. Berick, Esq.*
Partner
Squire, Sanders &
Dempsey L.L.P.
Former Chairman
Berick, Pearlman &
Mills Co., L.P.A |  | William L. Jews
President and Chief Executive Officer
CareFirst BlueCross BlueShield
Chief Executive Officer
Blue Cross Blue Shield of Delaware          |  | Michael Rosenthal, Ph.D.
Professor
Columbia University
Former Associate Dean
for Academic Administration
Columbia College                                                     

* Member of Board of Directors of MBNA International.

Additional outside directors of MBNA International include:

|                                                      |  |                                                            |  | 
|----------------------------------------------------- |  | ---------------------------------------------------------- |  | 
|                                                     
|C. Michael Cawley, M.D.
Neurosurgeon
The Emory Clinic |  | Douglas P. C. Nation
Senior Managing Director
Bear Stearns



---



Al Lerner and Charlie Cawley pictured at the New York Stock Exchange ceremony
commemorating MBNAs 10 years as a publicly traded company.

83



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OFFICERS

---

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

Executive Group

---

|                                                                                                             |  |                                                                                                          |  |                                                                                                               |  |                                                                                          
|------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------
|Gregg Bacchieri
Kenneth F. Boehl
Jules J. Bonavolonta
Robert V. Ciarrocki
Ronald W. Davies
Douglas R. Denton |  | Shane G. Flynn
M. Scot Kaufman
Diane S. Kedash
Charles C. Krulak
Janine D. Marrone
Frank J. McKelvey III |  | Terri C. Murphy
Michael G. Rhodes
John W. Scheflen
Michelle D. Shepherd
David W. Spartin
Richard K. Struthers |  | Penelope J. Taylor
Kenneth A. Vecchione
Lance L. Weaver
Thomas D. Wren
Vernon H.C. Wright

Management Group

---

|                                                                                                                        |  |                                                                                                                                 |  |                                                                                                                                     |  |                                                                                                                 
|----------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------
|Sunil F. Antani
Steve Boyden
Jae W. Chung
Douglas M. Cummings
Brian D. Dalphon
Salvatore A. DeAngelo
Joseph A. DeSantis |  | James H. Erskine III
William J. Esposito
Robert J.A. Fraser
John J. Hewes
James K. Kallstrom
Victor P. Manning
Frank B. McEntee |  | Charles K. Messick
Susan D. Morrison
William P. Morrison
Edward H. Murphy
Maureen M. OBrien
Patrick J. ODwyer
Francis H. Otenasek |  | Salvatore J. Rossi, Jr.
Kevin C. Schindler
April M. Stercula
James D. Thornton
Charles F. Wheatley
Kevin P. Wren

Operating Group

---

|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Frank Andrews
Russ Appleton
Jonathan Back
Ann L. Balthis
Lisa F. Baughman
Randall J. Black
Thomas W. Brooks
Mark D. Brucker
Becky Cahill
John P. Carey
James E. Carrington
William Caywood
Hugh L. Chater
William T. Christie
Joseph Claricurzio
Michael H. Copley
John A. Corrozi
Richard M. Croswell
Joseph R. Crouse
Patrick Crowfoot
Thomas L. Cuccia
William H. Daiger III
Greggory M. Davis
Joseph A. DePaulo
Robert V. DeSantis |  | Peter S.P. Dimsey
Theodore Dixon
Michael E. Durroh
K. David Elgena
Gloria G. Eppig
William M. Fore
John M. Gala
Joseph J. Gatti
Peter J. Gatti
Brian F. Gimlett
Mark Green
J. Patrick Gugerty
Bob B. Hallmark
Chairman Emeritus
Hallmark Information
Services
Richard A. Hardin, Sr.
Vaughn C. Hardin
David L. Harris
Douglas O. Hart
Robert J. Hayman
James E. Healy
Elizabeth Hershey-Ross
David M. Hirt
Anne T. Hogan
Thomas W. Horne |  | James F. Howe, Jr.
Richard G. Huber
Scott A. Hudson
David B. Kedash
Michael D. Keeports
David L. Kot
Kevin L. Kramer
Thomas G. Lackey
Elizabeth B. Lee
Mark J. Levitt
Timothy E. Love
Philip Manning
Edward J. Matthews
David H. Maxwell
Charles H. Moloney
Paul Muller III
Peter Murray
Alessandro J. Natali
Matthew H. Neels
Ian ODoherty
Kenneth R. Pizer
Edward G. Plummer
Gerald P. Plush
Jerald M. Pollard
David N. Resurreccion |  | John C. Richmond
Karen E. Rose
James J. Roszkowski
Robin D. Russell
Lewis D. Schiliro
David N. Schlesinger
Craig Schroeder
Michael S. Schuck
Richard E. Seta
Ann Seybolt
Stephen K. Shock
Maureen Sierocinski
David L. Simms
Richard B. Skinner, Jr.
Brett H. Smith
Timothy P. Staley
James J. Sullivan
Thomas G. Thomaides
Tracey L. Tibbs
Thomas D. Veale
William W. Wagner
Howard C. Wallace
Todd T. Weaver
Dena H. Williams

84



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SUBSIDIARIES OF MBNA CORPORATION

---

MBNA America Bank, N.A.

The principal subsidiary of MBNA Corporation, MBNA America, a national bank
with $87.7 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 is
the recognized industry leader in affinity marketing, with endorsements from
thousands of membership organizations and financial institutions.

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 Dublin, 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 and services credit-related Life and
Disability, personal Property & Casualty, 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 Hallmark Information Services, Inc.

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

Internet address: www.MBNA.com

Common Stock

---

Listed on New York Stock Exchange
Stock Symbol KRB

[RECYCLE LOGO]

Printed on recycled paper

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





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ATTENTION TO DETAIL
DRIVES EVERYTHING WE DO.

So far, so good . . .



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Success is never final.