Bank of Ireland is to outsource some of its training and purchasing activities in a bid to save €20 million a year.

The Republic's second-biggest bank yesterday announced a seven-year agreement to outsource some activities to consultancy firm Accenture as part of an overall strategic review aimed at reducing costs by €120 million a year by 2009. The group hopes to implement the changes, including the creation of a new human resources structure, within a number of months.

Currently about 180 people are employed by the bank's training and purchasing departments. All the staff will be retained in some shape or form unless they choose to take voluntary redundancy.

The ones who opt to stay will be retrained for deployment to another part of the company or transferred to Accenture. The Irish Bank Officals Association said last night that the move fell within the terms agreed last March with the bank for outsourcing.

Brian Goggin, chief executive of Bank of Ireland, described the announcement as a further significant step in the strategy to transform the bank. While it already outsources its IT operations to Hewlett-Packard, yesterday's announcement is the first outsourcing to follow the strategic review announcement earlier this year.

Many companies opt to pay other firms to carry out basic functions as a cost-cutting measure.

Last month Mr Goggin said the bank was on target to achieve savings of €30 million in the current financial year. Some 400 jobs have already been cut and by the end of March this number will have swelled to 1,200. While the bulk of the positions will come from streamlining support and processing functions, Bank of Ireland is also recruiting 500 staff to deal directly with customers at its branch network.

Accenture is the largest management consulting, technology and outsourcing group in Ireland, employing 900 people.