STATE-CONTROLLED Permanent TSB bank plans to close 16 branches and shed up to 250 full-time staff over the next four years as part of a major restructuring designed to reduce its operating costs by 10 per cent, or €25 million, and return it to profitability.
In addition to the closures, two other outlets will be downgraded to self-service units and two branches in Dublin’s city centre will be amalgamated to create a single “flagship” store.
No details were released yesterday on which of PTSB’s 92 branches will close. Staff will be informed today about which outlets will be affected.
Its 2,000-plus workforce is to be reduced by a maximum net 250 full-time equivalents by 2016 via voluntary redundancies. This will involve between 120 and 150 posts going at branch level and 75 to 100 from a head office restructuring.
The bank, which has received a €4 billion bailout from the exchequer and is 99.2 per cent owned by the State, will be restructured into three units – Permanent TSB bank in Ireland, an asset management arm (or bad bank) and CHL, its UK mortgage loan business.
PTSB, which still retains a stock market listing, said it would invest in “core banking areas”, including collections, which deals with arrears and bad debts, and Open 24, its online and telephone service.
Up to 100 new employees are to be recruited to bolster its collections activities. Departing staff will be offered three weeks’ pay per year of service plus their statutory entitlements. This will be up to a maximum of two years’ pay or €225,000, whichever is the lesser amount.
The restructuring follows detailed negotiations over the course of this year between PTSB’s senior management, led by chief executive Jeremy Masding, with the department of finance and the troika of the European Central Bank, International Monetary Fund and the European Commission.
PTSB submitted a detailed viability plan to the commission at the end of June that has been approved. Updates will have to be provided to the troika every quarter, beginning in October.
Mr Masding said the “ultimate goal” of the restructuring plan was to produce a “more focused, smaller and profitable bank”.
“We hope [in 2016] to be the leading, focused retail bank in Ireland,” he added.
Trade union Unite, which represents the majority of PTSB workers, plans to meet members in coming weeks to discuss the changes being proposed.
National co-ordinator Walter Cullen said there could be issues with the redeployment of staff whose branches are closing but who don’t want to take redundancy. “There is a significant job of work needed in order to win the confidence of staff who have been hit badly by previous attempts to ‘rescue’ the bank after the reckless lending practices of the past,” Mr Cullen said.
In an address to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform on July 18th, Mr Masding stressed implementing the plan in full was “not optional”.
