BANK OF Scotland (Ireland) (BoSI) has said it will sell or reassign its 44 Halifax retail branches as it exits personal banking to focus on business lending.
The British-owned bank plans to close the Irish Halifax business on a phased basis from May and make 750 staff redundant – just under half the bank’s 1,600-strong workforce – during June and July.
Staff were told of the job cuts by BoSI chief executive Joe Higgins in a telephone call yesterday afternoon. Among the cuts are 220 staff employed in customer services and an asset finance division at BoSI’s head office in Dublin.
The bank is closing a customer service centre in Dundalk where it has 130 staff. It is also shutting down its intermediary business, which provided mortgages, motor finance and commercial asset finance through brokers.
Mr Higgins said the bank had “agonised” over the decision for a very long time and had assessed a number of alternatives, including the possibility of the bank being included in the formation of a third force in Irish banking to rival AIB and Bank of Ireland.
Banking sources played down BoSI’s chances of becoming part of any future “third force” merger, saying that the bank’s decision to close Halifax would result in deposits moving out of the bank, making it a less attractive partner.
Mr Higgins said he delayed the planned closure of Halifax last summer by telling the BoSI board there may be “better options”.
Mike Wooderson, head of the international division of Lloyds, BoSI’s parent, said the UK bank had supported its Irish unit as it sought alternatives to Halifax’s closure and would continue to support its loss-making subsidiary.
Unite, the trade union which represents staff at BoSI, claimed that the decision to close Halifax was made by senior management at Lloyds, which is 43 per cent owned by the UK government.
“That is absolutely not the case,” said BoSI chairman Maurice Pratt, adding that the decision was taken by local management.
Mr Higgins defended the bank’s decision to compete aggressively after entering the Irish mortgage market in 1999 selling low-priced home loans through brokers.
The bank had “always sought to bring competition to the market”, he said, but that it had anticipated wholesale funding being “readily available in the markets” and that the property market would continue to grow. “The fact that neither of those remained the case has fatally undermined the proposal,” he said.
Mr Higgins also defended the bank’s decision to continue promoting the recent high-profile advertising campaign, featuring Irish actor Colm Meaney, as it assessed options for its future.
The bank needed to demonstrate the success of the retail business as part of the alternative options being considered by the bank, he said. “It would have been entirely wrong for the management team to pre-judge the outcome and undermine it by not continuing to support the business.”
Mr Higgins said the bank would “continue to look at options” to help customers move their current accounts and credit cards.
The bank said that their savings and investments “remain secure” following the closure of Halifax, and it would begin writing to customers later this month.
The Financial Regulator said it was working with BoSI to ensure that customers are protected in accordance with the Consumer Protection Code.
