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MBNA job fears as Lloyds announces £100m cuts following take-over

But Lloyds reveals proposed deal involves buying the MBNA building in Chester as well as customer accounts

The Chester HQ of MBNA (Bank of America)

Job fears are sparked by the disclosure that Lloyds Banking Group aims to save £100m per year through its take-over of Chester-based MBNA bank.

A merger between Lloyds and MBNA will lead to duplication in certain roles.

This leads Lloyds to conclude there is a ‘significant opportunity for cost synergies’, currently expected to be around £100m per annum within two years, representing about 30% of the MBNA cost base.

On a more positive note, Lloyds is not just buying the MBNA customer accounts but the whole credit card operation, including the building, offering hope the business will remain in Chester even if it is smaller in scale.

Chester MP to meet MBNA and Lloyds over buy-out

Lloyds Bank

Lloyds Banking Group spokesman Ross Keany said it was ‘too early’ to talk about the impact on the workforce but added: “We have bought the whole thing, lock, stock and barrel – the brand, the people, the building and IT. We are not just taking the book but the brand as well and will operate MBNA as a distinctive brand with its own marketing.”

Mr Keany said MBNA had won Consumer MoneyFacts’ Credit Card Provider of the Year in 2014, 2015 and 2016.

He continued: “We are not just going to get rid of that and make it all Lloyds. But we are half a year away from being able to talk about how it’s going to work.”

Chester-based MBNA sold to Lloyds Banking Group for £1.9bn

A CGI of what Storyhouse will look like when it opens next year

Another big concern is that MBNA has always been a huge supporter of local sport and community initiatives including, for example, Chester FC, the marathon, Chester Music Festival and the new Storyhouse theatre.

Spokesman Mr Keany offered hope this may continue.

He said Lloyds was the largest corporate supporter of charities in the UK having donated £60m last year, with £5m to Children in Need alone.

He commented: “What we have said very clearly is that we will keep the MBNA brand which will stand apart from the other brands. And we will keep what has made the MBNA brand distinctive, not just the approach to customers but the way it supports community sponsorship and the approach to marketing.”

Why Chester's MBNA is on Lloyds' Christmas list after 20 years of growth

Chester FC chief executive Mark Maguire(Image: Chester FC)

Chester FC currently has a three-year sponsorship deal with MBNA which involves financial backing but also support for corporate and community projects. The contract runs until 2019 so there is no imminent crisis.

Chief executive Mark Maguire said the MBNA team had become ‘good friends’ so his first thought on hearing news of the take-over was for the staff.

He added: “The only thing from my point of view is that whoever our sponsors are, we have to prove we are valuable to them.”

Mr Maguire said the ‘last thing’ he would ever do was take the MBNA sponsorship for granted.

Sale of Chester-based MBNA to Lloyds is 'speculation', firm says

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