PPI bill hit MBNA’s profits
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MBNA, the credit card company which is Chester’s biggest employer, has seen a sharp fall in profits as provisions for PPI claims continue to be felt.
The business, which recently committed to invest £600,000 over the next three years in a new cultural centre in Chester city centre, saw operating income fall from £847.1m to £633.7m in 2014 and pre tax profits slide from £161m to £121m in the same period.
Writing in the business review in the accounts filed at Companies House, chief financial officer Elyn Corfield said the “primary cause” for the fall in profits was a higher level of increase in regulatory provision of £328.1m, compared with £251.4m in 2013.
Owned by US financial services giant Bank of America Merrill Lynch (BAML), MBNA has nearly 2,000 staff on its sprawling campus at Chester Business Park.
It has an 11% share of the UK credit card market and as well as offering its own products, operates branded credit cards for leading airlines such as Emirates and for top football clubs including Manchester United, Liverpool and Chelsea.
The company said it had closed an Ireland-based call centre during 2014 and outsourced its print and production facilities, and as a consequence paid redundancy costs of £3.6m during the year.
MBNA said it had just over three million active customer accounts, and is looking to grow this further by investing in “new customer account acquisition to maximise shareholder value, investing in digital technology for customer interaction and continuing to invest in affinity relationships.”
The said it was committed to providing excellent customer service, a fact underlined by being voted Credit Card Provider of the year for a second year in succession at the Consumer Moneyfacts Awards 2015.