Sunday 26 March 2017

MBNA makes €2.97m profit as parent looks to sell firm

Minister says there has been 'positive expressions of interest' in credit card company

Gordon Deegan

MBNA's credit-card business in Ireland recorded pre-tax profits of €2.97m last year, new figures show.

Last month, parent of MBNA Ireland Ltd, Bank of America, announced that it was exiting the credit-card business in the UK and Ireland with the loss of 750 jobs at its call centre in Carrick-on-Shannon, Co Leitrim.

The Minister for Enterprise, Trade and Employment Richard Burton said last week that there have been "positive expressions of interest" from potential buyers of the MBNA credit card operation as the Bank of America seeks to sell the business "as a going concern".

Accounts just filed with the Companies Office showed that pre-tax profits at MBNA Ireland Ltd dropped by 14.5pc from €3.47m to €2.97m in the 12 months to the end of December last.

The company sustained the drop in pre-tax profits after revenues decreased by 7pc from €37.4m to €34.7m.

The announcement relating to the Bank of America withdrawing from its Irish credit-card business was made last month.

However, the directors' report signed off on March 11 this year confirmed that a restructuring of its Irish operation was under consideration at that time.

The report stated that the "directors are aware of a possible restructure within the MBNA Europe Bank Ltd Group which in 2011 could lead to the sale of the company's business to its parent".

They stated: "In the event of a sale, all material assets and liabilities of the company would be purchased by the parent at fair value.

"It is understood that the fair value of the land and buildings is likely to be lower than the current carrying value."

Concern

They continued: "On the basis that no formal decision has been made on this restructure, the directors consider that it continues to be appropriate to prepare the financial statements on a going concern basis."

The directors stated that net operating expenses for 2010 reduced from €35.6m to €33.3m "due to a combination of reduced people costs and other efficiency savings".

The figures showed that at the end of the last year the numbers employed by the company had decreased by 5pc from 667 to 630 with staff costs reducing from €25.7m to €24.4m.

Aggregate remuneration for directors last year increased from €154,985 to €179,468.

The profit takes account of the non-cash depreciation cost of €2.5m.

The figures showed that the company had accumulated profits of €41.6m at the end of last year that contributed to total shareholder funds of €52.2m.

The company's operating profit last year decreased from €1.8m to €1.4m and rental income of €1.56m boosted profits to a pre-tax profit of €2.97m.

Irish Independent

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