Local TD, Denis Naughten has questioned Minister Richard Bruton in the Dáil seeking an update on the discussions regarding the Bank of America’s MBNA credit card division in Carrick on Shannon. Denis Naughten was seeking reassurance from the Minister that the 400 staff associated with the UK loan book would retain their jobs in Carrick on Shannon (see Dáil debate attached).
In response the Minister stated that the IDA is in regular contact with Bank of America management in Carrick-on-Shannon and Dublin and at corporate level to monitor developments and is also in contact with Apollo Global Management, but that he could not provide reassurance on the future job prospects of staff operating the UK loan book for Bank of America.
“I will be continuing to raise this important issue with Minister Bruton, until a suitable owner is found for the UK portfolio”, concluded Denis Naughten.
Full Dáil debate follows:
Dáil Éireann, Thursday, 22 November 2012: Job Retention.
Deputy Denis Naughten asked the Minister for Jobs, Enterprise and Innovation the progress to date on protecting employment of staff working on the UK loan book at Bank of America, Carrick-on-Shannon; and if he will make a statement on the matter. [51774/12]
Deputy Richard Bruton: The process regarding the sale of Bank of America’s card businesses is ongoing but there have been no significant recent developments and the employment levels at the facility in Carrick-on-Shannon have been maintained.Earlier this year negotiations regarding the sale of the Ireland portfolio culminated in its sale by Bank of America to Apollo Global Management, a leading global alternative investment manager headquartered in New York. This transaction involves approximately 250 employees in Carrick-on-Shannon currently supporting the Irish portfolio transferring to Apollo. Under the terms of agreement between Apollo and Bank of America, the property in Carrick-on-Shannon will be officially transferred into Apollo ownership by mid-December 2012. The employees in Carrick-on-Shannon currently supporting the Bank of America Irish portfolio are then expected to transfer to Apollo by March 2013.Bank of America has not yet sold the UK portfolio which is the other business supported out of Carrick-on-Shannon and approximately 400 staff continue to be employed in this operation. IDA Ireland is in regular contact with Bank of America management in Carrick-on-Shannon and Dublin and at corporate level to monitor developments and is also in contact with Apollo. IDA Ireland last met representatives of Bank of America management in Carrick-on-Shannon on 9 October 2012 and senior executives of Apollo in London on 5 November 2012 where the transfer of the Carrick-on-Shannon facility and staff to Apollo, and also further investment opportunities for the group in Ireland were discussed.It appears that while Bank of America does not now expect to sell this UK portfolio in the short term, the process remains ongoing and a potential deal could materialise at any time. I appreciate that this uncertainty is unsatisfactory for the employees working on the UK card business, but a sale depends on wider commercial factors and the ultimate decision will be made by Bank of America, taking into account all relevant factors for the company. IDA Ireland and I will keep in close touch with the issue and will use whatever influence we can to seek to ensure a satisfactory outcome.
Acting Chairman (Deputy Peter Mathews): The ground rules are four minutes for supplementary questions, with strictly one minute for each and one minute for the reply.
Deputy Denis Naughten: I thank the Minister for his reply and I acknowledge the work to secure the jobs of the 250 people working on the Irish loan book and its sale to Apollo Global Management. What is happening regarding the possible sale of the UK loan book? While I acknowledge what the Minister said, some 400 staff are employed on the UK loan book in Carrick-on-Shannon at the moment. Does the Minister agree that the sense of urgency this time last year to dispose of the Irish and UK loan books by Bank of America seems to have dissipated since Apollo Global Management decided to purchase the Irish loan book? There is local nervousness given the announcement in August that 15 staff working on the UK loan book were to be let go. On foot of the discussions that have taken place with Bank of America and Apollo Global Management, can the Minister assure the House that those 400 people will have a job next year and into the following year?
Deputy Richard Bruton: I would love to be able to give all those categorical assurances about the future of this loan book. However, as the Deputy knows Bank of America was badly affected by the financial crisis and it announced extensive restructuring throughout its organisation. At that time it announced its plan to exit entirely the international credit card business. That was a strategic decision to focus on core business. It sold its Canadian and Spanish credit card business and of course it sold its UK business-lending portfolio and the Irish credit card book. As I said in my reply, Bank of America’s decision on its UK book does not now seem to be imminent. There has been a slowing down in the pace of the marketing and sale of that. Of course we are not authors of the final decision, which is for Bank of America. We make sure that we are very closely aligned to that decision process. I, personally, have been in contact with representatives of Bank of America on numerous occasions to keep across it. IDA Ireland officials in London and elsewhere are alert to the concerns. We will leave no stone unturned to protect this, but I cannot give categorical assurances.
Deputy Denis Naughten: I thank the Minister for the communication he has had with the two companies involved. Is the apparent slowdown in selling the UK loan book because of a change in policy or focus in Bank of America regarding the disposal of its international credit card business, or is it for some other reason? The Minister will acknowledge that MBNA in Carrick-on-Shannon is a major regional employer which employed up to 1,000 people at one stage. Coming up to Christmas it is a very anxious time for people. Any reassurance the Minister can give or any additional efforts that are being made by IDA Ireland – if not to progress this particular initiative then to look at alternative sources of employment for Carrick-on-Shannon – would be very welcome coming up to Christmas.
Deputy Peadar Tóibín: Leitrim has received one of the lowest levels of grant aid in the State, which is indicative of a bigger problem. Leitrim has not had a single IDA Ireland client company visit in the past three years. There is a swathe of rural counties that is not receiving any visits from IDA Ireland client companies. If they are not even receiving visits from these organisations, how in God’s name are they expected to attract foreign direct investment? The Government must also recognise needs with regard to economic disadvantage, unemployment and deprivation and tackle those needs by focusing FDI visits to those areas.
Deputy Richard Bruton: To take Deputy Naughten’s point. As recently as in the past three weeks the IDA met with the company. We are keeping alert to any possible developments. I will not speculate on what is the strategy of Bank of America. It has made significant decisions and disposals already but we are ensuring that we seek to protect this.Deputy Tóibín raised a much wider issue about regional strategy and how successful the IDA can be in terms of a regional spread. The flow of investments in which the IDA is involved has tended in recent years to focus on high skills and deeper labour pools and that makes it much harder to promote rural parts of the country as effectively. We have to focus also on developing indigenous enterprise. The is the reason the discussion on small business, indigenous enterprise, Enterprise Ireland and exporting is important.
Acting Chairman (Deputy Peter Mathews): I must interrupt the Minister as we have to move on to the next question.