BANKS: The Irish Bank Officials Association (IBOA) has told its members to reject any proposed merger between Bank of Ireland and AIB.

Addressing IBOA branch secretaries at a conference in Dublin yesterday, general secretary Mr Larry Broderick warned that the merger would lead to up to 5,000 job losses, 100 branch closures and would be detrimental to the Irish economy.

Mr Broderick described the merger proposal, being championed by Bank of Ireland group chief executive Mr Michael Soden, as a "merger made in hell".

Based on the IBOA's independent analysis, Mr Broderick told the conference an AIB/Bank of Ireland merger would mean the closure of up to 100 branches across the Republic and up to 5,000 redundancies.

"This would be totally unacceptable to the IBOA" he said.

The IBOA has presented its study of the implications of any such merger to the Department of Finance.

Mr Broderick also criticised Mr Soden for failing to discuss the idea with the IBOA.

A spokesman for Bank of Ireland said it would not be appropriate for the bank to enter discussions with the IBOA at this stage as the merger was still a "conceptual proposition" being offered for debate.

He also rejected the IBOA's claims regarding the scale of job losses that would ensue if it were to succeed.

"The job and branch numbers being postulated by Mr Broderick are totally speculative and there is no obvious basis for the conclusions he has reached," he said.

He added that the proposal was being pitched as a means to retain control of the Irish banking sector.

"Unfounded claims about possible job losses will serve to cloud that debate and may not be in the best long-term interests of Mr. Broderick's members."

AIB declined to comment on the debate. The Bank of Ireland spokesman told The Irish Times the bank had not made any formal approach to AIB about the merger.

Mr Broderick told the conference the banks were lobbying the Government to persuade it of the merits for the Irish economy of this link-up between the State's two biggest banks. In response, the IBOA intended to lobby all political parties in the run-up to the general election to voice its opposition to the merger, he said.

The trade union says it will also meet the competition authorities in the Republic and Europe to ensure staff and customer concerns are clearly understood.

The IBOA has called for the establishment of a banking forum to debate the future of the banking industry.

"A new bank based on the merger of Bank of Ireland and AIB would have a market share of more than 70 per cent of the retail market, 30 per cent of the life assurance market, and would dominate the stockbroking and capital market landscape. There is no way that this merger would be allowed either by the Irish Competition Authority or the European Commission."

Mr Broderick emphasised to IBOA members that mergers, by their very nature, were driven by the need to reduce costs.

"In practical terms, any proposed merger could lead to over 100 branch closures given the amount of overlap of branches throughout the country. In addition, there would be widespread rationalisation of head offices, information technology departments, life assurance, stockbroking, capital markets, credit card companies and all other subsidiaries. All in all, this would have savage consequences on staff, their families and also on customers."

It would be "naïve" and "deeply flawed" to argue that a merger between Bank of Ireland and AIB would be the best future for Irish banking.

Mr Broderick also dismissed Mr Soden's suggestion that the merger would help ward off a takeover by a foreign competitor.

"Remaining separate would be the best bulwark against a foreign takeover of Irish banking, because even if one of the big two are taken over, the other would remain in Irish ownership."