Wednesday 22 November 2017

Credit card firm won't have to pay back IDA grants

Peter Flanagan

Peter Flanagan

BANK of America will not have to repay a penny to the Government for pulling out of MBNA's Carrick-on-Shannon facility, despite receiving huge grants from the State to set up there in the first place, it was revealed yesterday.

MBNA received a grant from the IDA when it set up in Co Leitrim, and Bank of America took on the grants when it bought MBNA four years ago.

Now, however, the bank will not have to return a cent to the investment agency.

Just under 1,000 MBNA jobs are at risk, with 750 of them based in its Co Leitrim office, after parent company Bank of America announced on Monday it will "exit" the MBNA credit card business in the UK and Ireland.

The IDA did not reveal the size of the grant given to MBNA but it could easily run into millions of euro.

It is standard practice for the State to offer incentives to foreign multi-nationals to set up offices in areas outside the commercial hubs such as Cork and Dublin.

Those grants usually take the form of a certain fee being paid out by the IDA for every job created, with higher-paying jobs receiving a higher grant.

Even if the IDA paid the company as little as €2,000 per job created, up to 500 jobs, that would mean paying out €1m in incentives.

There would have been conditions on those payments -- the jobs had to be kept for a minimum length of time -- but these have now been fulfilled.

Meanwhile, the UK's Barclay Card and Spain's Santander bank, who have both been mooted as potential buyers of the business, refused to comment on speculation linking them to the operation yesterday.


While no jobs are at immediate risk -- it is expected to be some time before Bank of America makes a final decision on the future of the business -- tension was rising in the Leitrim area, with Ardagh and Clonmacnois Bishop Colm O'Reilly calling for prayers for the staff and their families.

"I am asking that special prayers be said this weekend. I ask that prayers be said for the intentions of the employees and also for the viability of their jobs," he said.

"The economic progress experienced over the last decade in Leitrim is in no small part due to MBNA and it is incumbent on public representatives to continue to seek a commitment from Government to support these workers by every means possible," he added.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business