January 16, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF Sun staff writers Jay Hancock and Michael Dresser contributed to this article.
MBNA Corp., bucking a decade-long trend of corporate defections and downsizing in Maryland, said it intends to establish a mid-Atlantic regional headquarters in the Baltimore area that will create as many as 2,000 high-paying jobs by the end of the decade.
At that size, the move by the world's second largest credit card company would mark the largest private-sector relocation to the region since General Electric Co. created its now defunct East Coast appliance manufacturing operation in Columbia in 1971.
"Over the past several years, the company has been regionalizing to a great extent to get closer to its customers," said Peter H. Frank, an MBNA spokesman. "We've found it's beneficial to separate the regional operations from the corporate headquarters, and the company chose Baltimore because it's at the center of the mid-Atlantic region."
MBNA's plan will re-establish the company's significant ties to Baltimore, ending a 15-year absence. In 1982, MBNA moved its corporate headquarters to Newark, Del., after state lawmakers refused to extend limits on the interest rates that credit card issuers could charge.
"MBNA is a company that was founded in Maryland, and we made a big mistake when we didn't do what we needed to do to keep their headquarters here," said Baltimore County Executive C. A. Dutch Ruppersberger, whom the company cited as a key reason for the move here. "It's so important for the region, because they're one of the fastest growing, best-managed and most philanthropic companies in the country. For MBNA to come back home with a major investment like this, I'm ecstatic."
Ruppersberger said he and former state Sen. Francis X. Kelly have been attempting to lure MBNA here for the past two years. As a private attorney in the late 1970s, Ruppersberger did legal work for MBNA, and since 1994 the company has contributed more than $44,000 to Ruppersberger's political campaigns.
"We've not had a relocation of this magnitude for the past decade," said James D. Fielder Jr., deputy secretary of the state's Department of Business and Economic Development. "Most of the growth we've experienced has come from home-grown companies such as T. Rowe Price or Integrated Health Services."
For MBNA, the decision to establish a regional headquarters in the area comes amid a tidal wave of growth. The company, which now has its headquarters in Wilmington, is Delaware's second largest private employer with 8,600 workers. It has grown largely because of Americans' reliance on credit cards for purchasing power, which is at an all-time high. MBNA manages nearly $39 billion in credit card loans.
In all, consumers currently owe nearly $500 billion to credit card companies like MBNA and Citicorp, five times the amount owed in 1981.
The consumer finance company's continuing growth was evident this week; MBNA reported that its earnings in 1996 rocketed 34 percent to $474.5 million, primarily on the strength of a record 9.3 million new customers.
Baltimore will become MBNA's fifth regional headquarters, joining Cleveland; Camden, Maine; Dallas; and Boca Raton, Fla. In each of those cities, MBNA employs more than 1,000.
A sixth such facility is being eyed in either Nevada, Arizona or California, and MBNA is scouting sites in Dublin, Ireland, for a European headquarters, company officials said.
The former Maryland Bank N. A. plans to consider as many as 16 sites by the end of March for the location of its Maryland headquarters. Frank said the new operation would have no effect on the 350 people that MBNA currently employs in its telephone sales center in Towson, and that the bulk of the jobs would be new hires.
Economic development analysts predict that MBNA's shift -- the current mid-Atlantic headquarters is part of its home base in Wilmington -- will have a positive spin-off effect that will create an additional 1,000 to 2,000 jobs.
Gov. Parris N. Glendening called MBNA's decision "terrific news" that demonstrates Maryland's ability to attract good jobs.
"MBNA told us they traditionally make many of their hires from local colleges, a fact that affirms my commitment to education," Glendening said.
Frank said a mix of jobs would be created, including positions in marketing, telephone sales and customer service. Traditionally, MBNA employees are higher paid than their colleagues in the credit card industry, making an average of $50,000 a year in salary and benefits.
Although MBNA declined to identify the sites it is considering, Frank said the company would prefer to build a facility. J. Joseph Casey, president of Baltimore commercial real estate firm Casey & Associates Inc., also believes the company ultimately will construct a building, since market activity has reduced the supply of quality office space.
Some MBNA analysts predict the company's employment in the Baltimore area could go as high as 3,000, as it continues to grow and diversifies into noncredit card businesses.
"They're exploring a number of avenues of noncredit card growth, such as automobile insurance, home equity loans and debt consolidations, and I believe they will begin to emphasize those vehicles in the future," said Mark C. Alpert, an Alex. Brown & Sons Inc. analyst in New York.
"I believe their earnings in 1997 will support this growth, in part because they're an efficient company and they've used technology wisely," said Merrill H. Ross, a Wheat First, Butcher & Singer analyst who tracks MBNA.
Pub Date: 1/16/97
