Virgin Money shows interest in acquisition of MBNA

SIR RICHARD Branson’s Virgin Money has expressed its interest in MBNA’s business in Carrick-on-Shannon for which IDA Ireland is identifying potential bidders.

“It’s fair to say that we will be involved in the process going forward,” a spokesman for Virgin Money said yesterday, but added there has been no detailed conversation with Bank of America as of yet.

Virgin Money has credit card customers in England, Scotland and Wales, and an existing loan book of £3.5 billion (€ 4 billion). It has a long relationship with MBNA, having partnered with the credit card specialist to run the Virgin credit card over the past 10 years.

It is also on an acquisition spree. In July, it put in a bid to acquire Northern Rock, the UK savings and mortgages bank, with the aim of running it as a high street bank. “If it’s possible to do a deal, we’d certainly look at it,” the spokesman said. However, he warned it was “too early to tell” as to whether or not Virgin would also be interested in the Irish arm of MBNA.

Meanwhile, the IDA’s financial services team is working on identifying candidates to take over the business. Before it can act, it will need a decision from Bank of America as to how it will exit the business. “It’s a waiting game to an extent to determine what decision the company will make,” an IDA spokesman said yesterday.

If MBNA can be sold as a going concern, the IDA will work internationally to find a buyer and to co-ordinate with it to try to keep the business in Carrick-on-Shannon. If, on the other hand, Bank of America decides to just sell on or wind down its $19 billion loan book, the IDA will hope to fill the Leitrim site, owned by MBNA, with another company.

A new entrant would likely benefit from substantial grant aid, given MBNA’s location in the Border, midland and western region. Under EU rules, this area is still eligible for capital and employment grants. Minister for Enterprise Richard Bruton is scheduled to meet Bank of America executives on September 22nd as part of his trade mission to the US. Ahead of this, the Carrick-on-Shannon Chamber has expressed its interest in meeting the Minister and the IDA.

“We want to do what we can to ensure that it’s sold as a going concern,” chamber president Gerry Faughnan said of MBNA. “It’s incumbent on everyone to do whatever they can to preserve the Carrick-on-Shannon base.”