The Exodus Continues....

Delancey

This evening it's been announced that MBNA are pulling out of Ireland and their parent Bank of America are also exiting their operation in Dublin.

Love them or hate them MBNA were an alternative to the established banks operating in the Credit Card market.
We have seen Halifax Bank of Scotland shut down , Post Bank likewise and ACC and National Irish Bank dramatically curtail their retail operation.
Add to that the collapse of Anglo Irish and Irish Nationwide and we are witnessing a dramatic reduction in the size of the Irish financial services industry.

In my opinion we are going back to the future - just 2 or 3 providers left with huge consequences for consumer choice not to mention an almost inevitable ' gouging ' of bank customers who have no alternatives to turn to , stand by for rip off charges.

Anyone know of other operators planning to pack their bags and ' do one ' ?

SBWife

Delancey wrote: »

This evening it's been announced that MBNA are pulling out of Ireland and their parent Bank of America are also exiting their operation in Dublin.

Love them or hate them MBNA were an alternative to the established banks operating in the Credit Card market.
We have seen Halifax Bank of Scotland shut down , Post Bank likewise and ACC and National Irish Bank dramatically curtail their retail operation.
Add to that the collapse of Anglo Irish and Irish Nationwide and we are witnessing a dramatic reduction in the size of the Irish financial services industry.

In my opinion we are going back to the future - just 2 or 3 providers left with huge consequences for consumer choice not to mention an almost inevitable ' gouging ' of bank customers who have no alternatives to turn to , stand by for rip off charges.

Anyone know of other operators planning to pack their bags and ' do one ' ?

There has been no announcement regarding the Bank of America Merrill Lynch operations in Dublin where over 1,800 are employed.

Solair

It's actually a bit bigger than that

Bank of America are pulling out of all of their non-US credit card operations.

MBNA Canada's credit card portfolio was sold off to TD Bank.

BoA are trying to ditch MBNA Europe Bank UK & Ireland operations and probably MBNA España too.

There's every possibility that they will sell the organisation as a going concern to another bank.

Unlike other Irish or British banks MBNA is not exposed to mortgage lending or developer loans. It's a pretty simple credit card issuer.

SBWife

The OP states that BoA is exiting their operations in Dublin. These are a separate business to the MBNA business and they have not announced any exit, the situation is bad enough without additional scaremongering on these forums.

dx22

Will absolutely devastate Carrick if no buyer is found, 1000 jobs would be a massive loss even to a city, let alone a tiny hamlet in Leitrim

Delancey

According to RTE a BOA spokesman said it was not decided whether the Dublin operations would be sold or wound down , I took that to mean that they will exit Dublin but remain undecided as to the exit mechanism.
Apologies if I misunderstood - scaremongering was not my aim.

supersean1999

does it mean iv to pay the 750e on my card

Solair

You have to remember that Bank of America only acquired MBNA, a specialist credit card issuer, in 2005. Bank of America itself is in severe trouble at the moment. I would doubt that it wants to exit all of its overseas credit card markets, rather that it wants to sell MBNA to get cash in and reduce its US debts.

Hopefully a buyer is found for MBNA's European operations in Ireland and the UK. They have a vast portfolio of customers and operate under quite a few prestigious and not so prestigious brands.

There are other operators out there who *might* be interested in picking them up.

Given MBNA's size in the UK market in particular, it would be quite likely that anyone buying them would probably retain the company's infrastructure. They are an extremely strong player in the card market.

Bank of America seems to be in a bit of a state of financial turmoil at the moment :

http://www.cnbc.com/id/41195932/Bank_of_America_Probably_Still_Screwed

So, perhaps it's just a case, like AIB, of ditching foreign assets to get cash on the balance sheet a.s.a.p. rather than anything fundamentally wrong with the MBNA operations.

If they do pull out entirely, I would hope there's some kind of reasonable deal put in place to allow card holders to pay off outstanding balances over a long period.

Halifax converted credit card debts to term loans at reasonably low rates which allowed most people to clear balances reasonably.

However, unlike Halifax, MBNA Ireland was never engaged in anything other than credit card lending, which is a hell of a lot safer and more diverse than insane and unsustainable home loans. So, I would suspect that MBNA Ireland and UK are probably healthy enough, compared to other retail banks who were involved in massive property deals that went bad.

http://www.bizjournals.com/charlotte/blog/bank_notes/2011/08/bank-of-america-selling-foreign-credit.html

linked above wrote:

The larger credit-card units in the U.K. and Ireland represent about $19 billion in assets and 4,000 employees.

Irish Slaves for Europe

Delancey wrote: »

Love them or hate them MBNA were an alternative to the established banks operating in the Credit Card market.
We have seen Halifax Bank of Scotland shut down , Post Bank likewise and ACC and National Irish Bank dramatically curtail their retail operation.
Add to that the collapse of Anglo Irish and Irish Nationwide and we are witnessing a dramatic reduction in the size of the Irish financial services industry.

In my opinion we are going back to the future - just 2 or 3 providers left with huge consequences for consumer choice not to mention an almost inevitable ' gouging ' of bank customers who have no alternatives to turn to , stand by for rip off charges.

Its devasting for our economy to lose 700 jobs and then other jobs in the area that will lost as a result of this. Thats an extra 140,000 euros per week in dole payments that we will have to find somehow.

But if we ignore that, the fact these credit companies are going out of business is a very good thing in the long term. Credit is what created the mess we are in. We as a society need to ban credit and buy what we can afford, not what we might be able to afford sometime in the future.

murphaph

Irish Slaves for Europe wrote: »

We as a society need to ban credit and buy what we can afford, not what we might be able to afford sometime in the future.

Nonsense. Credit is absolutely fine when given and taken responsibly.

Irish Slaves for Europe

murphaph wrote: »

Nonsense. Credit is absolutely fine when given and taken responsibly.

I disagree, it is a fundamentally flawed concept. It is a complicated pyramid scheme. It essentially works on the basis that someone in the future is going to take on more debt than you. There is no logical reason why anyone needs to take on debt to buy houses or cars or holidays etc.

Diarmuid

Irish Slaves for Europe wrote: »

It essentially works on the basis that someone in the future is going to take on more debt than you.

No it does not.

Sleepy

Anyone know if MBNA Ireland is currently profitable?

Hoping it gets bought as a going concern and simply re-branded. Far too many of their customers (myself included) couldn't handle a demand for full re-payment of balance.

Yourwellcum

Guys MBNA is not in trouble, it is in itself a profitable business. However, BoA are going to be bound by new rules governing cash reserves and cant afford the massive reserves needed to continue in this part its international business. Maybe someone more enlightened may explain it better but that is the essence of why this is happening

SBWife

In essence the sale of MBNA Europe (and Canada) is a result of BoA needing to comply with the Basel III accords. These are internationally determined capital adequacy ratios and capital definitions. There is nothing wrong with the MBNA business as such just it's inclusion stretches BoA's Capital beyond what is desired by the regulators, especially given the ****e position of the business BoA purchased from Countrywide Financial at the height of the mortgage meltdown.

digme

bank of america are broke.

SBWife

digme wrote: »

bank of america are broke.

They've a crap mortgage business that they need to continue to deal with but the above statement is simply idiotic and wrong.

nesf

digme wrote: »

bank of america are broke.

digme, you just got back from a ban, I really wouldn't be trolling by making exaggerated claims or spouting complete mistruths if I were you.

Delancey

It is interesting to learn of the reasons behind the BoA exit from this business .
I too hope that it gets rebranded , not just to save jobs ( important though that is ) but I just see fewer credit providers in this country and that can only be bad news for the consumer.

Remember the big shake up that Bank of Scotland brought to the then overpriced Mortgage market ?
The erosion of competition will hurt all - business and consumer alike.

depadz

Delancey wrote: »

Remember the big shake up that Bank of Scotland brought to the then overpriced Mortgage market ?
The erosion of competition will hurt all - business and consumer alike.

Didn't they introduce interest only & 100%+ mortgages before leaving the market again? Part of the problem we now find ourselves in I would have thought.

Delancey

depadz wrote: »

Didn't they introduce interest only & 100%+ mortgages before leaving the market again? Part of the problem we now find ourselves in I would have thought.

Dunno about the 100% mortgages but I do know their rates were substantially lower than the existing main lenders who promptly had to cut theirs.