Plans to sell credit card business dropped

THERE WERE unconfirmed reports yesterday that Bank of America intends to pull the sale of its Irish and British credit card business, which employs 750 people in Co Leitrim.

MBNA Europe, as the business is known, has been on the block since August, and its owner has been in talks with at least one potential buyer since late last year, when a number of bidders emerged for the business.

The company employs 750 people in Carrick-on-Shannon in Co Leitrim, although it has been looking for a number of voluntary redundancies from that operation.

Reports yesterday claimed that Bank of America has abandoned plans to sell MBNA Europe.

No reason was given for the decision, although a report in the Wall Street Journal said that new capital requirements demanded by EU regulators had made the business less attractive than before to any potential buyers.

A spokeswoman for Bank of America said yesterday that the group does not comment on speculation.

In November it emerged that Goldman Sachs and private equity fund, Apollo Global Management, both based in the US, joined forces to bid for the MBNA Europe Bank operations.

Other bidders reported to be interested in the business included both Virgin Money, with which it already operates a joint venture, and British bank, Barclays.

More recently, Spanish lender, Banco Santander and credit card company, Capital One, were also named as possible suitors for MBNA Europe.

Second-round bids for the business were due to be submitted shortly before Christmas and talks on the sale resumed last month.

Bank of America announced in August it was selling the MBNA Europe operation, as it no longer considers it central to its core business.

The announcement threw a question mark over the jobs the company supports in Leitrim.

Late last year, the US bank said that it would be seeking 100 voluntary redundancies there.

The jobs are part of its collection division, which it is aiming to slim down ahead of any sale.

The operation involves staff working in both Leitrim and Britain, where it is seeking to axe 150 jobs.

Concerns about the future of the Carrick-on-Shannon operation prompted Minister for Jobs and Enterprise Richard Bruton to meet Bank of America executives during a trade mission to the US in September.

At that point, a number of potential buyers had expressed interest in the operation.

MBNA Europe is one of the bigggest employers in the north west. The company operates a call centre in Carrick-on-Shannon that serves both British and Irish customers.

When Bank of America announced last August that it intended to sell the business, local politicians estimated that up to 5,000 people could be directly and indirectly affected if the business closed or left Carrick-on-Shannon.

At the time, Bank of America said that it was early in the process and stressed that it was business as usual in Leitrim.

The business has more than €11 billion in assets and employs 3,000 people, three-quarters of them in Britain.

The Irish operation filed accounts late last year showing that it made profits of €2.9 million in 2010, down 17 per cent on 2009, when it made €3.4 million.