Bank of Scotland (Ireland) (BOSI) has launched a new savings product, offering a 3.75 per cent interest rate, to mark the start of the roll-out of its new retail branch network.
The bank will today open three new branches, the first of 46 to be opened over the next 14 months, in its bid to shake up the Irish financial sector.
BOSI, which is part of the British-based Halifax Bank of Scotland Group (HBOS), plans to challenge the two big banks by expanding its customer offering to include a full range of banking products.
The first three branches will be opened in Ballyfermot and Dún Laoghaire in Dublin and in Limerick with a further branch in Swords to open later this month.
"This is the first full service retail bank to come on the high street since the 1880s," BOSI chief executive Mark Duffy said.
The new branch network,which will reach two out of every three Irish adults, will have four branches in Dublin's city centre as well as 13 in the greater Dublin area.
Using some of the premises acquired when it purchased the ESB's retail outlets last year, BOSI plans to open 11 branches each in Leinster and Munster, including three in Cork and two in Limerick.
There will be six branches in Connacht, including two in Galway, and one in Ulster.
In addition to competing with AIB and Bank of Ireland in terms of products, BOSI aims to attract customers by focusing on customer service. Its branches will be open from 9am to 5pm from Monday to Friday and will from 9am to noon on Saturday, and will offer what Mr Duffy described as "a retail experience".
Telephone banking will be available to customers through the bank's new call centre in Dundalk and internet banking will follow next year.
The bank plans to launch a number of products, including a new mortgage offering, over the next six weeks. But customers will have to wait until next year before they can apply for acurrent account. Mr Duffy blamed the delay faced by the bank in gaining access to the Irish bank clearing system for the length of time that it is taking to offer current accounts.
To mark the start of the roll-out of the branch network, the bank announced details of the new savings product yesterday.
BOSI's Monthly Saver product is offering an interest rate of 3.75 per cent to those saving between €10 and €750 each month.
While the rate is well ahead of those offered by rivals such as Northern Rock and Anglo Irish Bank, the account permits a maximum initial investment of just €10,000, while the overall amount held in the account is limited to €50,000.
HBOS, which earns more than 85 per cent of its profits in its home market, was attracted to the Irish market by the strong economic growth of recent years and its young and growing population.
Chief executive James Crosby said the fact that banking margins in Ireland are as much as twice those in the UK was another factor grabbing HBOS' attention.
While banking analysts believe BOSI's move, allied to Danske Bank's arrival in the market following the acquisition of National Irish Bank (NIB), signals the start of a more competitive banking environment in Ireland, few expect that the earnings of the two main banks to suffer too much in the near term.
"We continue to believe that strong domestic economic growth will remain the key drivers of Irish banks' profitability," Bank of Ireland-owned Davy Stockbrokers said yesterday.
