THE FUTURE of MBNA’s credit card servicing centre is likely to hang in the balance for some time, with concerns emerging that even if a buyer is found it may not secure the 740 jobs in Carrick-on-Shannon, Co. Leitrim.
Yesterday, a spokeswoman for Bank of America was keen to stress that it is still early days.
“We are in the early stages of the process and our ultimate decision will be based on what is in the best interest of our shareholders, employees, customers, and partners,” she said, adding that until a decision is made “it is business as usual”.
The Carrick-on-Shannon call centre services customers in the UK and Irish markets and is understood to be a profitable business. As such, potential buyers such as Barclaycard – which exited the Irish market in 2007 – have been pin-pointed. Earlier this year it acquired Egg, the UK credit card business of Citigroup. Other contenders include Spanish banking giant Santander, which is expanding in the UK, and French bank Societé Générale. BNP Paribas, which has a consumer finance subsidiary, Cetelem, in 13 countries across Europe, could use MBNA as an opportunity to access the UK and Irish markets.
A private equity fund could also be in line to acquire the business, given that a German private equity fund acquired Bank of Americas Spanish credit card business. If this was the case, it could have a better outcome for employees. When Barclays acquired Egg it announced that it would transfer the work of Egg’s call centre, which employed more than 600 people in Derby, to existing Barclaycard service centres.
Sinn Féin TD Michael Colreavy said he was concerned that the focus would be on finding a buyer, without ensuring that the buyer was committed to staying in Leitrim. “If this [call centre] was moved . . . the workforce would have no option but to head for Dublin airport and get on a plane.”
Andrew Neeson, head of research with business intelligence firm Lafferty, said the fact that Bank of America announced it was looking for a buyer was “unusual”, and he said that the sales process “could drag on for months”.
However, he added that given the concentration of credit card providers in the Irish market – the top five account for 95 per cent of the credit card market – acquiring MBNA, which is the third largest issuer, could be an effective way of penetrating the Irish market.
In 2009 Irish credit card companies had to write off about 9.5 per cent of their portfolio, while another disadvantage of the Irish market is the €30 stamp duty on credit cards. This makes it less attractive for people to hold more than one card and therefore less attractive to a potential purchaser.
Mayor of Roscommon Cllr Eugene Murphy said at least 5,000 people would be affected if the operation closed – the workforce, their families and those employed in spin-off businesses. “Many families have two and three members employed there,” he said.
Local Fine Gael TD Frank Feighan said that Minister for Jobs Richard Bruton was preparing to travel to the US within the next two weeks for a meeting with Bank of America executives.
