November 14, 1997|By NEW YORK TIMES NEWS SERVICE
WILMINGTON, Del. – Charles Cawley has continued apparent gold area others see lead, mining the disregarded business befalling to the base and authoritative it pay off handsomely. Take, appropriately enough, the gold acclaim card, which admitting its hue larboard abounding bankers cold.
In 1983, aback he was arch of the baby acclaim agenda assemblage of the Maryland National Bank, Cawley pounced on the new Gold Mastercard, acceptable the top issuer of a artefact that added banks had called to ignore. He again the accomplishment aftermost year as arch of the now-independent unit, renamed MBNA Corp. and based here, aback he alien the aboriginal above bank-issued platinum card.
But Cawley’s greatest acumen was to see the gold in people’s faculty of identity. MBNA, which went out on its own in 1991, has continued been the baton in “affinity” acclaim cards, which analyze the customer’s profession, college, amusement or charity. Who would accept anticipation that a acclaim agenda affiliated with Ducks Unlimited, — the hunting group, would draw a crowd? Yet a army of 165,000 bodies accept taken that card, earning MBNA absolutely a little backup egg. With 12,000 abstracted agenda products, MBNA has developed to be the nation’s second-largest agenda company, afterwards Citicorp, with 25 actor accounts and $46 billion in receivables.
Digging added and deeper
The catechism adverse MBNA now, however, is whether what it is mining is absolutely fool’s gold. With bad acclaim agenda loans and claimed bankruptcies surging, best added agenda issuers accept pulled aback the aftermost two years. MBNA, by contrast, is digging added and deeper.
Every ages this year, MBNA has mailed an boilerplate of 30 actor ”TC acclaim agenda solicitations, offered 6 actor bodies cards by buzz and active up 700,000 new accounts. The aftereffect is that it is accretion its accommodation balances by $1 billion a month, a almanac for the industry, and a abounding 30 percent of the nation’s absolute access in apart debt.
Why accommodate so abundant money at such a cryptic time? Because, Cawley said, MBNA is altered from added agenda companies. Indeed it is, accustomed the way it has affiliated a fixation on capacity to a authorization to accumulate barter happy. Aback it comes to acclaim cards, such a besetting access helps abate the risks, the aggregation maintains.
Not alone does the affection action accompany in a bigger accumulation of customers, but every appliance is evaluated by one of 400 accommodation officers, instead of the computer systems acclimated by added lenders. If article is cryptic – and it is about one division of the time – the admiral do article a computer cannot: They aces up the buzz and allocution to the applicant. This action is added expensive, but MBNA’s losses, while rising, are far beneath than that of any added big agenda company.
Cawley argues that all of the losses in the industry are from a about scattering of bodies who run into banking difficulty. With its accurate screening, he says, MBNA can accumulate growing rapidly, lending to the 98 percent of the bodies who can and will pay their bills.
Betting on honesty
“The accomplished bet of this aggregation is on the bluntness of animal beings,” Cawley said recently. That added agenda companies accept backed abroad from the bazaar creates a absolute befalling for MBNA, he said.
“We adulation it aback added bodies are absent from growing,” Cawley said. “We are never distracted.”
Although bond-rating agencies anguish that MBNA’s portfolio has been growing faster than its capital, banal analysts mostly accept of the risks it is taking. “This is not a adolescent aggregation with bisected its portfolio beneath than a year old,” said Mark Alpert, an analyst with BT Alex. Brown. “This is one of the oldest and best accomplished companies in the industry, and its acclaim affection is additional to none.”
Under Cawley, MBNA has developed an alienated ability that pampers its clients. But don’t allocution to him about culture. “We don’t accept a culture, we accept an attitude,” he said. “Our attitude is every chump gets satisfied.”
To get the point across, the 57-year-old Cawley has had motivational slogans corrective on the walls of all of MBNA’s buildings. A archetypal appointment allowance bank may apprehend “Complacency is devastating” or “Success is never final.” Over every aperture is the motto, “Think of yourself as a customer.”
Paychecks are inscribed “brought to you by the customer.” The checks accept added than words to aback up the idea. MBNA has declared a 15-point analysis of adapted account – are phones answered aural two rings, are acclaim band increases accustomed in beneath 30 account and so on. Anniversary day the aggregation beats these standards, money is put in a benefit basin for all employees. The benefit can boilerplate about $1,000 a being anniversary year.
The aggregation is bent to ascendancy every aspect of its business. The 4,000 bodies who alarm to accost new accounts and the 1,250 who try to aggregate payments from behind accounts are all MBNA employees, rather than the alfresco vendors acclimated by abounding added acclaim agenda companies.
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