The recent contraction in the financial services sector appeared to tighten further following Bank of America‘s announcement that it is to sell its MBNA credit card business, putting 5,000 jobs in the UK and Ireland at risk.
MBNA claims to be the largest credit card provider in Europe, employing a total of 4,000 staff, supplying some £11.6 billion in loans and offering dozens of ‘affinity’ own-brand cards to organisations ranging from RyanAir and the RSPCA to Arsenal football club.
Bank of America told the Guardian that the decision to exit the UK and Ireland was based on a new strategy of divesting non-core assets. Chief executive Brian Moynihan said: “While the credit card remains a fundamental core product for our US customers, an international consumer card business under another brand is not consistent with that strategy.”
The move puts 4,000 jobs at risk at the firm’s site in Chester in the UK and a further 1,000 in jeopardy in Carrick-on-Shannon in Ireland.
Staff at both locations were informed of the move yesterday lunchtime after being called to a meeting. But some Irish workers protested at the lack of information provided, saying that they first heard the news from worried US relatives who had telephoned to see if their jobs were safe.
Employees will now face an uncertain few months as they wait to hear whether Bank of America can find a buyer for the business.
The news came to light after recruitment group Michael Page International warned that the jobs contraction in the UK banking sector was hitting its profitability.
The company said in a statement: “In the first six months, our banking business grew strongly. However, following the recently announced hiring freezes in the last few weeks, gross profit growth in this sector, which accounts for approximately 10% of group gross profit, has slowed.”
Lloyds Banking Group, HSBC, Barclays and Royal Bank of Scotland have all announced job cuts in recent weeks, raising concerns over the strength of the UK economy.
