State-controlled Allied Irish Bank has said that it plans to close branches following a new deal with An Post to extend banking services throughout the country’s 1,100 post offices as the lender unveiled an update to its plans to restructure the business.
The bank told staff in a 24-page "strategy update" document that customers will be able to lodge cheques and deposits at An Post outlets over the coming months in addition to banking services already on offer to AIB customers through the post office network.
"Our distribution network will be enhanced by the new An Post initiative and it will support us in making changes to our current branch network," the AIB document said.
"Regrettably, this means that the number of branches will reduce as part of the move to lower costs. But, through the use of mobile banks and new branch openings in selected areas, AIB will bring banking services to new locations."
The strategy to close some of the bank's 270 branches forms part of the plan to reduce costs by offering more services through new technology and to return the bank to profitability by 2014 to attract new investors to reduce the State's 99.8 per cent shareholding.
AIB is reducing its workforce by at least 2,500, or almost one in every five jobs, and is cutting pay by up to 15 per cent to reduce costs after receiving a bailout of almost €21 billion from the Government.
The bank said that it also plans to "adjust lending rates relative to the cost of funds", according to the document. "It is not sustainable to product products and services which costs us more than we earn," AIB says in the document.
